According to CNBC, Facebook parent company Meta said on Wednesday that privacy changes made in Apple’s iOS operating system last year will seriously affect its finances. The company claims that the privacy changes will cause a $10 billion revenue loss.
“We think iOS will have a negative impact on our business overall in 2022,” Meta CFO Dave Wehner said on a conference call with analysts after the company’s fourth-quarter earnings report. Facebook directly acknowledges the impact of Apple’s App Tracking Transparency feature on the advertising business. This feature reduces targeting capabilities by restricting advertisers’ access to iPhone user identifiers.
“We’re just estimating the overall impact of the cumulative changes in iOS on our 2022 revenue forecast,” Wehner said. “If you aggregate the changes we’ve seen on iOS, it’s an order of magnitude change. We can’t do that. It’s very precise, it’s just an estimate.”
Apple App Tracking Transparency
Last year, Apple announced that it would launch a feature called “App Tracking Transparency”. This feature will allow people to better control their data. Crucially, this feature allows users to choose whether advertisers can track their activities. For Facebook, this is a huge problem, because Facebook makes unimaginable profits by selling targeted ads. Facebook has publicly stated that this will harm its business.
Apple subsequently postponed the proposed changes until this year to allow developers time to prepare.
Apple executive, Jane Hovarth, outlined the reasons for the delay in a letter. Horvath couldn’t help being furious at Zuckerberg: “Facebook executives have made it clear that their intention is to collect as much data as possible. This disregard for user privacy continues to grow.”
Facebook countered: “They use their dominant market position to choose the data they collect while making it almost impossible for competitors to use the same data. They claim that it’s about privacy, but it’s actually for profit.”
To Apple, this is like sprinkling salt on a wound. For a long time, Apple is proud of its business model and it believes that it is nobler than Facebook. According to reports, as early as 2010, Apple co-founder Steve Jobs warned Facebook to pay attention to privacy issues. In 2018, Cook said that he could have imitated Facebook and used data to sell advertising, but “we chose not to.”
Now, Facebook can no longer send targeted ads to millions of iPhones globally. This is exactly why Facebook is losing billions in revenue. However, there are suggestions that the changes in privacy are a signal that Apple may want to compete in the global advertising market.