Data is a vast, extremely valuable and still untapped resource. And just like any other valuable resource, a lot of powerful entities are ready to go to war for it. Recently, the battle for control over our online data reached a threshold with two tech giants doing everything in their power to secure access to it for the future.
The so-called “Privacy War” is happening between Apple and Facebook. Two giants that are ready to annihilate each other’s business over control of our data.
Facebook has built a giant business over the past several years through their secretive business model. It is exactly not clear how Facebook makes money. Unlike subscription services like Amazon Prime, Netflix or Disney Plus Facebook demands no monthly subscription and no in-app purchases from its nearly 3 billion strong users.
You use Facebook, chat with your friends, watch new videos and it’s all free! Right? No, it’s not. Facebook makes money via advertising. Particularly with hyper targetted ads that make use of Facebook’s massive collection of user data which it collects by extracting thousands of behavioural insights about a person.
For example, let’s suppose you have a bike repair shop. You can promote it by buying a classified ad in a newspaper, putting up posters around town or even buying a billboard. But none of those methods can reach your potential customers better than a Facebook ad.
Using meticulously collected user data, Facebook can target your ad specifically to the right people. With a Facebook ad, you’ll have customers lining outside your shop with their broken cycles. It is a clever business model and does help a lot of business owners in advertising. However, this business model could end very soon thanks to Apple.
Apple iPhones are some of the best selling smartphones on the planet. Simply put whatever happens to iPhones, leaves a huge impact on the rest of the tech industry.
Recently, Apple has decided to make privacy a central feature of its smartphone by introducing a new update to its core operating system. Furthermore, this new update stretches beyond the iPhones, of which there are already a billion devices, and into the iPad as well.
So what will the change look like?
What Facebook Wants
After Apple releases the iOs 14.5 updates, Facebook users will be asked if they want to share their metadata with the platform. The metadata includes every bit of your personal information including your likes, dislikes, marital status, location, etc.
User data is what makes Facebook’s ad platform so good and without it, the future of the company could hang in the balance. Understandably, following Apple’s latest move, Facebook took out big full-page ads in newspapers like Washington Post, Wall Street Journal and New York Times newspapers.
The ads boldly said that Apple’s proposed changes would “Limit Businesses ability to run personalised ads and reach their customers effectively.” According to the ad, around 44% of small business owners increased their online marketing budget on Facebook.
The full-page ad predicted that “the average business advertiser stands to see a cut of over 60% in their sales for every dollar they spend.” The ad also had a powerful tagline – Stand Up For The Small.
Facebook points to data suggesting that almost half of the US diners have tried a new restaurant for the first time based purely on the strength of a social media post. There is little doubt that Facebook’s ad campaigns are an integral part of any small business.
Apple is trading on its transparency. Its products might be expensive but they do offer a high level of privacy as compared to other devices. Apple’s defence in this whole situation against the full-page ads taken out by Facebook is – this is a simple matter of standing up for our users. They should know when their data is being collected and shared across other apps and websites. And they should have the choice to allow that or not.
The app tracking transparency in iOS 14.5 gives users a choice. Facebook clearly understands that if a user is asked “Do you want to share your private data?” they’ll most likely say No. And this affects Facebook’s ability to sell ads.
It’d also cripple Facebook’s industry-leading algorithm. Less data for Facebook means less targeted ad service which in turn will impact the quality of marketing campaigns small businesses run.
Facebook’s legal approach here is to show Apple as a tyrannical monopoly acting in an irresponsible manner and hurting small businesses in the process.
Epic Games is another tech company alongside Facebook that seeks to rage legal battle against Apple. The gaming company tried to sneak in a payment system within their app bypassing the 30% cut which Apple demands App Store purchases. As a result, Apple removed Epic games from its store and the latter filed a lawsuit, which will be heard on 3 May 2021.
Questions from this entire situation are plenty. How easy should it be for Facebook to harvest user data? Should Apple decide what’s good for the rest of the tech industry and what’ll happen to the small business owners who can increase their business using online ads? Only time will tell.