Facebook declares war on Apple

Social-media company joins antitrust effort against iPhone maker, claims changes to iOS that block targeted advertising that Facebook specializes in is an assault on small businesses

Facebook launched a PR assault against Apple on Wednesday, proclaiming that the iPhone maker’s upcoming changes to its mobile operating system will hurt small businesses’ ability to target advertising and app makers’ ability to offer free content.

When Apple AAPL, 0.57% updates iOS 14 on mobile devices early next year, it will require all apps to show a prompt allowing users to opt out of targeted advertising. People opting out of tracking will hinder Facebook’s FB, 0.35% ability to collect information it could use to personalize ads, and the company’s attack Wednesday included publicly standing with “Fortnite” owner Epic Games Inc. in its antitrust suit against Apple.

Previously: Big Tech is turning on one another amid antitrust probes and litigation

In full-page ads Wednesday morning in the New York Times, Washington Post and Wall Street Journal, Facebook said it is “standing up to Apple for small businesses everywhere.” The social media giant also held a news conference featuring a couple of small-business owners who said their businesses have thrived because they effectively target personalized ads.

“There’s no possible way our business would be where it is today without personalized ads,” said Monique Wilsondebriano, who co-owns Charleston Gourmet Burger Co. in South Carolina with her husband Chevalo. She said that when they started their business in 2012, they turned to online ads because they could not afford radio or television advertising: “No way, hands down.”

Apple argues that it is just giving users a choice.

“We believe that this is a simple matter of standing up for our users,” the company said in a statement Wednesday. “Users 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.”

An Apple spokesperson pointed to a letter sent by Jane Horvath, senior director of global privacy at the company, to privacy advocates last month in response to their disappointment that Apple was delaying the rollout of iOS 14.

“Some companies that would prefer [app tracking transparency] is never implemented have said that this policy uniquely burdens small businesses by restricting advertising options, but in fact, the current data arms race primarily benefits big businesses with big data sets,” Horvath wrote.

After the iOS update, users will be able to more easily track who’s tracking them and make changes if necessary, Apple said. It said it was delaying the rollout to give app developers more time to adjust.

Dan Levy, Facebook vice president for ads and business products, said Facebook “fundamentally disagrees” with Apple’s stance that “personalized ads are inherently inconsistent with privacy.” He added that Facebook and others in the industry “can protect privacy while using personalized data.”

Levy also said Apple’s moves are “anticompetitive,” echoing antitrust sentiment against Big Tech, and said Apple is trying to “go back 20 to 30 years” to a time before targeted advertising.

“We welcome in-app advertising and are not prohibiting tracking,” Apple said in a statement. “We’re simply requiring each app to obtain explicit user consent.”

Facebook also said it intends to support Epic Games’ lawsuit against Apple. The lawsuit accuses Apple of anticompetitive behavior after it removed Fortnite from the App Store because Epic offered a way to pay for in-app purchases that bypassed the App Store.

For more: Will videogames be the Achilles heel for Apple, Google in antitrust investigations?

Apple, which has been criticized for the 30% cut it takes from app developers, last month launched a program that slashes commission rates in half for businesses that make under $1 million a year.

The company expected companies like Facebook to fight its upcoming update.

Craig Federighi, Apple’s head of software engineering, said at a privacy conference in Europe last week that “it’s already clear that some companies are going to do everything they can to stop the App Tracking Transparency feature I described earlier — or any innovation like it — and to maintain their unfettered access to people’s data.”

Apple and Facebook have sniped at each other for years. Apple Chief Executive Tim Cook has pointedly said his company doesn’t “monetize” its users through advertising. Facebook CEO Mark Zuckerberg has hit back by saying that his company does not charge its users, while Apple’s products are sold at a premium.

Facebook faces its own antitrust scrutiny, with the Federal Trade Commission and 48 attorneys general signing on to an antitrust suit against the company last week. Alphabet Inc.’s GOOGL, -0.39% GOOG, -0.31% Google also faces federal and state antitrust charges, and Amazon.com Inc. AMZN, -0.14% is being investigated for potentially anticompetitive actions by the European Union and reportedly the U.S.

In-depth antitrust coverage: Big Tech has an antitrust target on its back, and its growing

Facebook shares gained slightly Wednesday, while Apple declined slightly. Apple stock has gained 73.6% so far this year, making it worth more than $2 trillion, while Facebook shares have increased 34.4%. The S&P 500 index has gained 14.4% in that time.

This article was originally posted by MarketWatch.