Facebook Claims That Apple Has Too Much Power, and They Are Probably Right

Facebook is suing Apple for allegedly refusing to allow the social media company access to its user data. But does Facebook have a point?
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Has Facebook the right to say that Apple Inc. has too much power? Apple did something incredible in Dec 2020. The company modified how iOS, their mobile operating system, handled users’ privacy options so that owners of iPhones and other iOS devices may specify whether or not they want to be tracked by any apps on their devices. If the user says no, Apple will stop those apps from collecting the user data. 

As far as Apple, Facebook, Google, and other giant tech companies are involved, users are entitled only to as much privacy as they wish to give us; and nothing more.

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Apple allows extensive surveillance on its platform, much like Facebook, Google, and other firms. While Apple removed some of the worst location-data brokers from their app stores in 2021, the company left many to track users and sell data to third parties.

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The restrictions made Facebook furious, and it’s not hard to see why

Almost all iOS users do not want to be tracked. Without tracking, Facebook could no longer compile the nonconsensual behavioral records that are its stock-in-trade. Facebook claimed that allowing Apple users to refuse tracking cost the firm $10 billion in the first year, with more losses to follow.

Facebook struggles to get the money back

Facebook went above and beyond, looking for ways to recover those billions. The firm barraged its users with messages pleading with them to enable tracking. It implied that Apple would face an antitrust lawsuit. It persuaded small businesses to defend user-tracking by arguing that it is a sort of small business development when a prominent corporation spies on billions of people.

Do people like targeted ads?

For years, Facebook and the surveillance ads industry argued that people are fond of targeted ads since all that surveillance produces are “relevant” and “interesting” ads. The basis for the statement is that people utilized Facebook and visited sites with ads on them. Hence, they must value targeted ads.

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But sadly, reality has a predisposition against surveillance. In what amounts to the largest consumer boycott in history, hundreds of millions of web users had already installed ad-blockers and tracker-blockers long before Apple gave its consumers a meaningful choice about whether or not they wanted to be spied on.

These teeming millions would have gotten a weird way of showing it if they genuinely value ads-target. Generally, when internet users are given the option of whether or not to be spied on, one would expect an average user to say no. Should we be grateful to Apple for giving its users this option?

When users are hostages

Facebook bemoans Apple’s power to override its users’ decisions regarding which apps they want to run in its comments to the National Telecommunications and Information Administration’s docket titled “creating a report on the mobile app ecosystem’s competition.” Technology countermeasures by iOS devices like the iPhone is to stop “sideloading” and the emergence of third-party alternative app stores.

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1024px Aerial view of Apple Park dllu
Apple Headquarters by Daniel L. Lu (user:dllu) under CC BY-SA 4.0

Customers who want to use third-party app stores and apps would be forced to bypass Apple under The Open App Markets Act in the USA. A similar law exists in the EU under the Digital Markets Act. Some software developers have filed lawsuits against Apple for misusing its monopoly position because they are unhappy with the business constraints that Apple places on those firms that sell through its App Store.

Arguments over what appears in the App Store

The commissions that Apple demands from its software vendors are typically the main topic of contention. It was previously 30%. But recently, some vendors were moved into a 15 percent discount tier. That makes sense since many companies have operating margins that make paying a 30% (or even 15%) fee unfeasible. As an illustration, the retail discount for wholesale audiobook sellers, who compete with Apple’s iBooks marketplace, is 20%.

Apple App Store icon
App store logo by MarkDobromyslov

Unless you’re Apple or its preferred partner, selling audiobooks on Apple’s platform is a money-losing proposition. Audiobook retailers using iPhone apps are forced to implement odd workarounds, such as requiring customers to log in using a browser to their sites to purchase their books, then return to their phones and use their apps to download the purchased books.

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This act means Apple has almost total control over the literary works that its mobile consumers can hear, plus which mobile apps they can use. The company may not have intended to have this kind of power over its consumers’ reading preferences, but now that it does, it zealously defends it. When Apple’s users express a desire to use rival App Stores, Apple goes the extra mile to prevent them from doing so.

“Hardware sales” and “app commissions” form the foundation of the iOS business model. Facebook explained that these two elements force Apple’s users to pay hefty “switching costs.” The economists refer to all the things you have to give up when you switch your allegiance from one business to another as “switching costs.” In the case of iOS, upgrading to a competing mobile device entails the cost of purchasing new apps in addition to a new phone.

The limitations Apple places on third-party browsers and Safari/WebKit, Apple’s browser tools have hobbled “web applications” that function without a hitch inside a browser. This implies that app developers must spend money to create unique apps for each mobile platform rather than delivering a single, browser-based app that functions on all tablets and phones. Consequently, app users are unable to simply move from one platform to another and access all of their apps by entering a URL into a preferred browser.

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How Facebook operates

As much as people despise that platform, the costs of using it are outweighed by the charges the firm imposes on users who leave. Therefore, Facebook is in a great position to explain how high switching costs can lock users into a service they don’t particularly like.

To maintain its switching costs as high as possible, Facebook has invested in significant engineering resources. The company’s executives, project managers, and engineers openly discuss ways to design Facebook’s services such that customers who go to a rival pay as much as possible in internal memos reported by the FTC. Facebook is entirely dedicated to making sure that deactivating your account also deletes all of the friends, family, communities, and users who continue to use the service. Thus, when Facebook claims that Apple is holding its users captive with switching charges, they speak from experience.

Dictators who are good still rule

Facebook argues that user choice should prevail over corporate preference when Apple’s users disagree with Apple. Users should have the option to use an app that Apple doesn’t like if they so desire. Users shouldn’t be forced to stay with Apple if they wish to switch to a competitor by paying exorbitant switching fees.

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Facebook’s right

Users’ choices should take precedence over corporate preferences. You should have the option to use an app privately if you so desire. No App should be able to lock you in with exorbitant switching expenses if you wish to leave and join a competitor. The issue with iOS isn’t that Apple runs a Software Store; rather, it’s that Apple forbids third parties from launching rival app stores.

Will Apple’s data privacy last for long?

It’s fantastic that Apple decided to protect your privacy. You ought to demand nothing less. But you need to be able to overturn Apple’s decision if it decides not to protect your privacy. After all, Facebook had been monitoring iOS users for more than ten years before App Tracking Transparency. If you agree with Apple’s decision regarding which apps you should use, fine. But such a system only succeeds occasionally and fails miserably. No matter how much you believe in Apple’s judgment, there is no assurance you will tomorrow.

The pain and the gain

Apple makes a big deal in those times when it stands up for its users where necessary. But like Facebook, Apple maintains that when it decides to sell out its users, they shouldn’t be allowed to defend themselves.

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That isn’t enough. Apple is wrong to suggest that users with this choice will be exposed to invasive and predatory apps. On the other hand, Facebook is right to suggest that users should be able to choose app stores other than Apple. There is much space for improvement, particularly for a mass-market product that cannot possibly meet all the unique, individual requirements of billions of consumers.

Apple is also correct. Users shouldn’t have to consent to spy to use Facebook. Users’ rights shouldn’t be subject to corporate boardroom judgment. Instead of waiting for Apple or even Facebook to stand up for its users, the general public deserves a legally enforceable right to privacy that applies to Facebook and Apple – and the tiny businesses that may emerge to provide competing app stores or user interfaces.

What the law says

The US Congress is debating this matter just as the courts. One of their ideas is to require that Apple feature applications the firm doesn’t like on its App Store. However, many things may go wrong if Apple was made to publish software it does not like. The US government has a repulsive practice of giving Apple orders to undermine the encryption on which its consumers rely.

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Featured image credit: Facebook Headquarters by Minette Lontsie under CC BY-SA 4.0