The data protection dispute between Facebook and Apple is just the beginning

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Apple CEO Tim Cook appeared to be taking a shot on Facebook at a January 28 conference. (FILE)

It’s difficult to pinpoint exactly where something went wrong with Facebook and Apple, but like so many bad relationships, the first signs of real trouble looked like a little snooping. In March 2018, Facebook Inc. was in the midst of a scandal involving political consultancy Cambridge Analytica and faced serious questions about how its users’ personal information was managed. A commenter at MSNBC asked Tim Cook, Apple Inc.’s chief executive officer, what he would do if he were in the shoes of Facebook CEO Mark Zuckerberg. “I wouldn’t be in this situation,” said Cook.

A week later, Zuckerberg implied that Apple’s products were only for “rich people”. Then Apple showed a feature that would allow phone users to spend less time in apps. “If you see an app that you might want to spend a little less time in, you can set your own limit,” an Apple manager said while the app from Instagram was displayed on a big screen behind him.

Competition in Silicon Valley can be fierce, but for the past decade, Apple and Facebook have had a mutually beneficial, if not always friendly, relationship. Facebook relies on Apple’s iPhones to reach millions of users, and Apple needs Facebook’s popular apps on their phones to keep users from switching to competing platforms. Both companies have done well since the iPhone was released, for the most part not making products that are directly in competition.

However, Facebook and Apple are on a collision course. The competition for messaging has intensified for years. Facebook focuses on products that are also on Apple’s roadmap, such as virtual and augmented reality headsets. “We see Apple increasingly as one of our biggest competitors,” Zuckerberg told analysts in January. “Apple has every incentive to use its dominant platform position to interfere with the functioning of our apps and other apps, which they regularly do to favor their own.”

The feud has expanded rapidly due to the upcoming update from Apple to the software that powers the iPhones. This also includes the requirement that developers be given explicit permission to collect certain data and track user activity across apps and websites. Such a move could undermine the effectiveness of Facebook’s targeted advertising. In December, Facebook ran full-page ads in a trio of US newspapers saying it was “facing Apple for small businesses everywhere” by opposing changes it called an abuse of market power. Facebook is considering filing an antitrust lawsuit against Apple, according to someone familiar with the company’s thinking.

According to Apple, the software update will give users more clarity about who is collecting their data and why. It describes privacy as a “fundamental human right” – and its record on the subject is a way of differentiating itself from Google from Alphabet Inc., which is making Android the software that powers most non-Apple smartphones.

Cook appeared to be taking a shot on Facebook on Jan. 28 at the online computing, privacy and privacy conference. “If a company is based on misleading users, on data usage, and on decisions that are not decisions at all, then it doesn’t deserve our praise, it deserves reform,” he said. Cook added that some social networks are making it easier to spread dangerous disinformation and conspiracy theories for the purpose of user interaction. “It’s been a long time since we stopped pretending that there was no cost to this approach – polarization, lost trust and, yes, violence,” he said.

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Discussions between the two companies about the software update have been unproductive, says Graham Mudd, vice president of advertising and marketing for business products at Facebook. He says attempts by Facebook and others to discuss the software update with Apple have “failed”. “Apple did not respond at all or with any degree of cooperation.”

The recent flare is now focused on the wording of the popup where iPhone users decide whether to allow tracking. Facebook executives fear Apple is alarming the selection, effectively pushing users to opt out of tracking. Dave Wehner, Facebook’s chief financial officer, told analysts he expected “high opt-out rates” for Apple’s request, and Facebook said these changes would affect further business. There are plans to add custom messages to Apple’s prompt and advertise it to provide a better experience on Facebook and to help businesses that rely on targeted ads to sell.

Whatever the outcome, the argument suggests further tension. Elizabeth Renieris, a data protection and privacy attorney who runs the Notre Dame-IBM Technology Ethics Lab, says the tracking conflict has shown how much both companies dominate their respective markets, which could be problematic as both are under antitrust scrutiny . Facebook’s argument that small businesses will no longer be able to reach customers after these changes shows how important it is in the world of small business advertising, she says. Apple’s claim to have to create and enforce industry-standard rules to protect user privacy illustrates the overwhelming impact on the smartphone market.

“They are assuming their continued dominance for the next decade or more. They are already talking about their next feud,” she says, referring to Facebook. “It’s pretty crazy to me that they would broadcast all of this publicly.”

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Zuckerberg warned analysts last month of “very significant competitive clashes” in the coming years. Facebook owns three messaging products, each with more than a billion users – WhatsApp, Messenger and Instagram – that compete with Apple’s iMessage. Zuckerberg accused Apple in late January of giving its own app an unfair advantage over competitors, but also pointed to the success of iMessage to prove that Facebook does not have a monopoly on private messages.

The two companies will compete on hardware when Apple releases a virtual reality device next year that can rival Facebook’s Oculus Quest headset. Both companies are also developing their own augmented reality glasses, although those are further away. Apple and Facebook are also starting to compete at home. Facebook now offers a range of smart home devices for video chat that in some ways rival Apple’s own TV set-top box, HomePod speaker, and iPads for FaceTime.

Given its bad reputation, Facebook is seriously disadvantaged in the fight for privacy, and Zuckerberg has tried to highlight what he sees as non-malicious motives for the phone maker’s business decisions. “Apple may say they are doing this to help people, but the steps are clearly in their competitive interests,” he said on Jan. 27. “I think this dynamic is important for people to understand because we and others will.” be against it for the foreseeable future. “

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