Facebook’s parent company Meta and Apple have been arguing for a long time about who can benefit from user data and how much. Since last year’s iOS 14.5, users have been able to limit an app’s tracking, making it more difficult for the app to create cross-app or cross-vendor profiles for ads. Meta in particular suffers from this: After all, it is part of the group’s core business to distribute ads to the users of its services. According to analysts, Meta made less profit in the second quarter of 2022, partly because of Apple’s changes.
However, things could have turned out differently: In the years leading up to the iOS update, Apple employees arguably approached Meta and suggested several other options – mainly to Apple receiving a portion of Facebook’s revenue, like the Wall Street Journal reports.
All of this negotiation arguably took place when Meta was still called Facebook; between 2016 and 2018. Both companies therefore discussed a subscription model: Facebook could have introduced a paid version that would then be ad-free for the user. Since Apple receives part of the subscription fee for every subscription taken out via the Appstore, this would have been quite lucrative, especially for Apple.
The two companies have also fallen out over promoted posts, according to the Wall Street Journal. Users pay Facebook money to get more people to see a post. For Facebook this is a kind of advertisement, but from Apple’s point of view it is an in-app purchase. Facebook would have had to pay Apple a fee for in-app purchases, namely 30 percent of the purchase price – Apple, on the other hand, does not receive a share for advertising products.
According to the Wall Street Journal, the two companies could not agree on any proposal discussed.
iOS 14.5 and the Cartel Office
Since iOS 14.5 from April 2021, apps must first obtain user consent before they can access the Identifier for Advertisers (IDFA). This unique combination of numbers allows advertising companies to create profiles across apps and providers or to measure the effectiveness of banner advertising. At the same time, developers are not allowed to restrict the functions of their apps if users object to tracking.
The Federal Cartel Office in Germany initiated an antitrust investigation in June 2022. It’s about the initial suspicion that Apple’s specifications favor its own apps and hinder other companies. Apple rejects this and announced that it would work constructively with the cartel office. (str)
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