iOS 14 now requires app developers to provide privacy tag information that appears next to the download button in the app store, and sometime in early 2021, it will force apps to alert users to tracking for personalized advertising. In the eyes of some other technology titans, most notably Facebook, this is anti-competitive behavior.
Facebook criticism, however, is not rooted to the detriment of its own platform; indicates the expectation of disproportionate damage to small businesses that rely on personalized ads and tracking technologies to compete with enterprise-level advertising budgets.
Apple accused of anti-competitive behavior
In response to changes in iOS 14, Facebook said it expects its own services and the services of its affiliates (like Instagram and WhatsApp) to be fine given that it will only minimally affect its own internal ad delivery systems. The world’s largest social media company instead points to small businesses as victims of Apple’s alleged anti-competitive behavior. Targeted ads have been a significant boon for companies that don’t have a budget for traditional saturation-based approaches, allowing them to spend only on individual ads that measurably reach their desired target demographic. In a blog post, Facebook has launched the option to remove a component from its ad network platform from Apple devices completely if the proposed changes to iOS 14 exist.
Apple says the changes are in the name of user privacy, which it believes should be considered a fundamental human right. Facebook is taking a more cynical stance, believing that Apple is implementing these changes to improve its own targeted advertising service (Apple Search Ads) and to help its brand’s image as a top hardware maker.
Accusations of anticompetitive behavior escalated further than sniping for Apple, as antitrust investigations were launched in both the United States and the EU. However, Facebook has its problems of this nature. He is now facing lawsuits filed by the Federal Trade Commission and the vast majority of states, which threaten to annul large mergers of the company in the past decade.
A significant component of accusations of anti-competitive behavior is that Apple does not adhere to all the same standards. Although the company will provide privacy tags for its own application downloads and on the associated application website, the devices have preloaded all types of applications that will not be subject to this requirement. Apple also has no plans to apply login alerts for its applications, with the exception of Apple Search Ads data disclosure requests.
Will Facebook fight for small business?
To date, Facebook has published two full-page ads in major newspapers criticizing Apple for anti-competitive behavior. The latest of these frameworks releases the release as “Apple vs. Free Internet,” arguing that free sites and blogs will have to start charging a subscription and that free apps will have to push more optional in-app purchases to survive if they can’t make revenue from the target advertising. The ad cites statistics from a recent Deloitte study showing that 44% of midsize and small businesses increase the use of personalized social media ads during the Covid-19 pandemic, and that the average small business advertiser can expect a 60% reduction in their return on ad spending if I can’t use personalized ads.
However, Facebook did not just suddenly jump into conflict when the income of small businesses was threatened. The company has been interfering with Apple for some time over its alleged anti-competitive behavior. When Epic Games (publisher of Fortnite) embarked on a battle with Apple over its mandatory 30% reduction in all app store transactions and its refusal to allow sales outside its ecosystem, Facebook pledged to provide supporting material and documents for the legal challenge.
WhatsApp, owned by Facebook, also directly criticized Apple in early December for anti-competitive behavior over new mandatory privacy labels whose content is not controlled by app publishers. Although Apple has voluntarily downloaded these tags for its internal apps, WhatsApp points out that the terms used in them are very broad and can confuse users in terms of the scope of apps ’ability to collect data from people. WhatsApp has also noticed that its direct competitor, iMessage, comes pre-installed on almost all Apple devices, so end users wouldn’t see its privacy tag if they didn’t visit the app’s website to specifically look for it.
Facebook suggests that the average small business advertiser can expect a 60% reduction in returns on #adspending if they can’t use personalized ads. #privacy #respectdata
Deutsche Bank estimated that about 70% of Facebook advertising revenue comes from small businesses that often spend just $ 100 or $ 200 on a successful targeted advertising campaign when more general television or radio ads would cost thousands of dollars. Apple’s state-of-the-art search advertising program costs much less, but the company recently made a move to bring small businesses into its small ecosystem by reducing the app store transaction fee to 15% for organizations earning less than $ 1 million a year.