Apple and Facebook have been at conflict for a while now; at WWDC 2020, Apple stated that iOS would mandate that developers ask users to consent to cross-app advertising tracking. Facebook spent a significant portion of the following months criticising Apple’s plans and projecting revenue volatility as a result of the changes, however, the feature was actually introduced in iOS 14.5 back in April 2021. Surprisingly, a recent Wall Street Journal report asserts that Facebook and Apple were negotiating a collaboration and revenue-sharing agreement prior to this whole thing happening.
According to the Journal, a subscription service that would provide an ad-free version of the site was being discussed by Apple and Facebook. Additionally, given that Apple receives a cut of all in-app sales, including subscriptions, the deal might have been extremely profitable.
Another arrangement that was proposed and ultimately became contentious was Apple receiving a percentage of “boosted posts,” which are posts that are paid to get seen by more people. Small businesses frequently use boosted posts to increase their audience reach, as noted by the Journal, and Facebook has long considered them to be a part of its advertising offering.
Apple’s position that boosts should be treated as in-app purchases that are subject to the company’s 30 percent revenue cut was what ultimately caused the problem. Facebook, on the other hand, insisted that those were promotional items that were exempt from Apple’s cut.
According to research company Insider Intelligence, 37% of iPhone users have chosen to allow companies to follow their activities across applications after the changes to user-tracking went into effect in 2021. Since the shift took effect, Facebook (now Meta) has experienced much slower revenue growth, and last quarter, Meta announced the first revenue decrease in the history of the company.
We’re a long way from these talks, which apparently took place between 2016 and 2018. Apple is making every effort to present itself as a privacy protector, and Meta, well, Meta is busy attempting to create the Metaverse. However, advertising is now the only significant source of income for Meta, so the business will need to continue to adapt to a future where most consumers take advantage of iOS app tracking protection.
