Facebook escalates Apple feud with own privacy pop-ups

The incoming iOS 14 update means Facebook could record revenue losses of as much as $5 billion

With Apple’s iOS 14 privacy changes rolling out imminently, Facebook will begin to push its own notification asking for users to consent to targeted advertising in an attempt to “provide more information”.

The two companies have been at loggerheads over proposed changes that mean apps sharing data with third parties for advertising purposes will need to seek explicit permission to continue doing so. 

These changes were supposed to be first introduced with iOS 14 last year but had been delayed. In practice, it means users of apps like Facebook will be met with a prompt from Apple asking whether they opt-into ad tracking. 

However, Facebook’s VP ads and business products Dan Leavy claimed, because Apple’s prompt suggests there’s a tradeoff between “personalised advertising and privacy”, the app will show a screen of its own. This will appear immediately before Apple’s pop-up from next Monday.

“If you accept the prompts for Facebook and Instagram, the ads you see on those apps won’t change,” Leavy said in a blog post. “If you decline, you will still see ads, but they will be less relevant to you. 

“Agreeing to these prompts doesn’t result in Facebook collecting new types of data. It just means that we can continue to give people better experiences. We feel that people deserve the additional context, and Apple has said that providing education is allowed.”

When iOS 14 was launched in 2020, Apple teased this change, among other updates, which aimed to protect and bolster user privacy

Facebook has long disagreed with the move and has publicly fought Apple on its rollout, managing to delay its launch in September, for example, after arguing it would knock the revenues of its advertising partners. 

Shortly after, in November, Apple publicly criticised the business model of Facebook and similar tech giants for their reliance on ad-tracking and targeting of user data. 

This ongoing privacy dispute could also lead to a legal war, according to the Information, with Facebook working with external legal forces to draft an anti-trust lawsuit against Apple.

Facebook has consistently argued that the change, which is now expected to come into force early this year, would cause financial harm to its advertising partners, as well as itself. 

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The expectation is that a large number of Facebook users would opt-out, rendering Facebook’s packages less attractive, with fewer buyers targeted with ads relevant to them.

The material impact of the change is estimated to be as much as a 7% loss in revenue in the second quarter of 2021, according to AdExchanger. This could translate to roughly $5 billion, depending on the financial projections.

The company’s CFO David Wehner wrote the company expects “more significant advertising headwinds” during 2021 in the company’s latest financial report. 

“This includes the impact of platform changes, notably iOS 14, as well as the evolving regulatory landscape,” he added. “While the timing of the iOS 14 changes remains uncertain, we would expect to see an impact beginning late in the first quarter.”

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