The TL;DR version is: there is no such thing as a free lunch.
If you happen to be a Facebook or Instagram user on an iPhone running Apple’s latest iOS 14.5 update, do not be startled in case you receive a “notice” from the social media giant. It is simply meant for educational purposes even as Facebook makes a fresh attempt to put forward its stance on tracking and personalised advertising — and why they are necessary.
For those unaware, the new App Tracking Transparency feature in iOS 14.5 — that went live last week — puts the control of user data in their hands and gives them an option to opt out of being tracked across apps and websites for advertising. Apps like Facebook that track user activity across apps and websites they do not own in order to target them with ads for, in the words of Facebook, better experiences, are now mandated to seek permission before doing it.
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Under the new policy, developers can provide additional context before presenting Apple’s “allow apps to request to track” prompt and Facebook is using that right to “help people make an informed decision about how their information is used,” it says in a blog post (updated on May 1). While it did not agree with Apple’s approach, it was complying with the policy because it did not have a choice but to “ensure stability for the businesses and people who use our services” and adding its own pop-up notice that reads:
“This version of iOS requires us to ask for permission to track some data from this device to improve your ads. Learn how we limit the use of this information if you don’t turn on this device setting. We use information about your activity received from other apps and websites to: show you ads that are more personalised, help keep Facebook free of charge and support businesses that rely on ads to reach their customers.”
Facebook has argued that the policy changes will lead businesses to opt for subscription-based models — over more conventional advertising — for revenue which invariably means Apple would profit since it charges a cut from in-app payments. In the long run, free services will have to start charging or leave the market completely. At the same time, small businesses and publishers who are already struggling in a pandemic will be hit worse, Facebook says. Apple has argued, the changes were more to do with user privacy and choice.
Regardless of all the arguments, Facebook has made it abundantly clear that Apple’s new stand on privacy of iPhone users isn’t good news for its own business. In its recent earnings call, it warned investors Apple’s new iOS privacy changes will start impacting its ad sales business and deter growth later this year. CEO Mark Zuckerberg hasn’t ruled out the possibility of paid version of Facebook — in case the going gets tough.