‘They’re playing chicken’: inside Mark Zuckerberg and Tim Cook’s feud
Alongstanding feud between Mark Zuckerberg and Tim Cook could come to a head this week, as a highly anticipated Apple operating system update will for the first time allow users to opt out of cross-platform tracking.
Tensions between Facebook and Apple have been growing for some time, but the new operating system threatens to kneecap Facebook’s business model, and has turned up the heat, said Ari Lightman, a professor of digital media and marketing at Carnegie Mellon University’s Heinz College.
“They are at each other’s throats,” he said of Zuckerberg and Cook in recent months. “The issues have been different over the years, but consumer privacy is always at the heart of it, and with this update, Facebook could be in trouble.”
Apple’s new iOS update allows users to see what information companies collect about them and opt out of such data collection. This is bad news for Facebook, whose business model is 99% advertising based on such data collection.
Facebook has described the update as an attack on small businesses that rely on its advertising models – even releasing a number of television commercials on the matter – while Apple has positioned itself as a privacy savior. Neither of those narratives is exactly accurate, said Gautam Hans, an intellectual property and privacy law professor at Vanderbilt University.
“It’s more about control of the industry,” he said.“Apple is a company very focused on controlling its own products and services, and they view Facebook as undermining that.”
On Tuesday, a Wall Street Journal report showed Apple’s own ad products may benefit from the new update that disadvantages Facebook. Facebook’s earnings report shared Wednesday showed growth bolstered by advertising sales, but the company warned next quarter profit could be severely impacted by the new iOS update.
In a call with investors Facebook’s chief operating officer, Sheryl Sandberg, said the company is working “to mitigate the impact of the iOS 14.5 update”.
“There are challenges coming to personalized advertising and we are doing a huge amount of work to prepare,” she said.
Shots fired
The update from Apple is the latest roadblock for Facebook, but the two companies have been at odds on several occasions in recent years, often over consumer privacy and Apple’s App Store policies.
In perhaps his earliest Facebookrelated commentary, Cook warned in 2014 about tech companies that profit from collecting user data, encouraging users to “follow the money” to see if they should be “worried” about what apps they are using without naming Facebook directly.
The Apple CEO took a more direct shot at Facebook in 2018. Asked in an interview what he would do about Facebook’s Cambridge Analytica scandal if he ran Facebook, Cook responded he “wouldn’t be in this situation”.
In an interview with Ezra Klein, Zuckerberg dismissed Cook’s comments as “extremely glib” and “not at all aligned with the truth”. He also told staffers in private that Facebook should “inflict pain” on Apple over the comments, according to the Wall Street Journal.
The companies’ frustrations reached a bigger stage last year, when the CEOs traded complaints during hearings on antitrust issues in the
US Congress. In July 2020, Zuckerberg argued in front of lawmakers that Apple’s iMessage holds a large market share for the messaging space, deflecting from Facebook’s own dominance. Last week, in a conversation with the former Vox technology journalist Casey Newton, Zuckerberg argued that the fees Apple charges creators stifle the economy.
“I’ve been pretty vocal that I think some of the App Store policies hurt the creative economy, especially during Covid taking a 30% tax from small businesses that have had to move online, is tough,” Zuckerberg said.
‘They’re playing a game of chicken’
According to Jennifer King, a fellow at the Stanford Institute for Human-Centered Artificial Intelligence, it’s important to see the rift between Facebook and Apple against the backdrop of a new push from US lawmakers to regulate big tech.
“This is much more about trying to get ahead of regulators potentially going down this path they can’t control, even if it doesn’t have a dramatic impact on their revenue,” she said.
“They are playing a game of chicken and nobody is willing to cede their side,” she added. Apple declined to comment on the issue.
Dani Lever, a spokeswoman from Facebook said the fight was about much more than advertising dollars. From the start, Facebook and Apple have put forward very different ideas of the internet – Facebook championing ad-supported, free services and Apple preferring subscription-based or hardware profit-supported models
“This is not about two companies – this is about the future of the free internet,” Lever said. “[Apple] claims this is about privacy but it is really about profit, and we’re joining others to point out Apple’s hypocrisy and anti-competitive behavior.”
The back-and-forth between the companies comes at a time of unprecedented legislation aimed at big tech. In January, it was reported that Facebook has been preparing an antitrust lawsuit against Apple over its App Store rules.
Ultimately the changes amount to power moves and little else, said Lia Holland, a spokesperson at digital rights group Fight for the Future, as the two companies have drastically different business models: Facebook’s business model relies on collecting data on users and selling it to advertisers, she explained. Apple’s business model relies primarily on selling expensive devices to people, meaning it has no need to rely on data like its competitors do.
The changes to these business models would not be happening if the two companies were not currently at the center of an antitrust battle with
regulators, Holland added.
“[Amid] increasing scrutiny on tech giants’ manipulation of our digital lives, Apple is throwing Facebook under the bus to try and claim that its App Store monopoly protects customers from much-maligned surveillance capitalism,” she said.
“We’re watching the latest toss in a game of PR hot-potato between two tech giants that feel the anti-monopoly hammer coming down – the only difference is that this time, everyday people’s rights benefit,” Holland said.