Inside the Apple vs. Facebook Privacy Fight

An ongoing dispute over privacy between Apple and Facebook is roiling the digital economy, leading companies to shift billions in ad spending as users continue to limit the data available to advertisers. The feud took off last year, when Apple rolled out iOS 14.5, a version of its mobile operating system that made it easier than ever for iPhone and iPad users to opt out of letting apps like Facebook track their activity on their devices. The two companies weren't always at odds. In fact, they were almost business partners. From a report: In the years before the change, Apple suggested a series of possible arrangements that would earn the iPhone maker a slice of Facebook's revenue, according to people who either participated in the meetings or were briefed about them. As one person recalled: Apple officials said they wanted to 'build businesses together.' One idea that was discussed: creating a subscription-based version of Facebook that would be free of ads, according to people familiar with the discussions. Because Apple collects a cut of subscription revenue for apps in its App Store, that product could have generated significant revenue for the Cupertino, Calif., giant.

The companies also haggled over whether Apple was entitled to a piece of Facebook's sales from so-called boosted posts, said people familiar with the matter. A boost allows a user to pay to increase the number of people that see a post on Facebook or Instagram. Facebook, which considers boosts ads, has always contended that boosts are a form of advertising, in part because they are often used by small businesses to reach a bigger audience, said one of the people. Apple, which doesn't take a cut of advertising from developers, argued that Facebook boosts should be considered in-app purchases, according to a person familiar with the matter. Apple's standard terms would entitle it to take a 30% share of those sales.

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