8 reasons why Apple will beat Facebook
Friction between Facebook and Apple is growing, and many are predicting an all-out war between the two tech giants. Facebook doesn’t stand a chance.
What's the war all about? Well, of course, it's complicated. But I would summarize it like this: "Facebook wants to trick and track users for money, and Apple doesn't want to let Facebook do that to Apple users."
Specifically, Facebook wants its iPhone app to track users without telling users they're being tracked. Apple wants to give iPhone users the option to block tracking.
The larger picture is that Apple is increasingly uncomfortable as an accomplice to Facebook's exploitative business model generally.
One of Facebook's arguments is that giving users more control over privacy benefits Apple monetarily because that policy makes Apple more popular with users, whereas taking away tracking knowledge and control from users benefits Facebook monetarily, because the reality of Facebook tracking makes Facebook less popular. Therefore, argues Facebook, Apple is just taking money from Facebook and they can do that because they're abusing their monopoly position.
The Wall Street Journal this morning reported that Facebook founder and CEO Mark Zuckerberg is taking criticisms by Apple CEO Tim Cook personally. Zuckerberg reportedly told his staff that "We need to inflict pain" on Apple because of Cook's comments.
Wait, what comments?
Cook's open criticism started in 2018 when he slammed Facebook over Facebook’s Cambridge Analytics scandal and called for laws that would prevent Facebook from allowing a scam like that to happen again. In response, Zuckerberg basically called Cook a liar.
In January, Cook destroyed Facebook without even mentioning their name in a keynote at the European Computers, Privacy & Data Protection conference. Cook said:
"Technology does not need vast troves of personal data stitched together across dozens of websites and apps in order to succeed. Advertising existed and thrived for decades without it, and we're here today because the path of least resistance is rarely the path of wisdom.
"If a business is built on misleading users on data exploitation, on choices that are no choices at all, then it does not deserve our praise. It deserves reform.
"We should not look away from the bigger picture. In a moment of rampant disinformation and conspiracy theories juiced by algorithms, we can no longer turn a blind eye to a theory of technology that says all engagement is good engagement, the longer the better, and all with the goal of collecting as much data as possible.
"Too many are still asking the question 'How much can we get away with?' when they need to be asking 'What are the consequences?'
"What are the consequences of prioritizing conspiracy theories and violent incitement simply because of the high rates of engagement?
"What are the consequences of not just tolerating but rewarding content that undermines public trust in life-saving vaccinations?
"What are the consequences of seeing thousands of users joining extremist groups and then perpetuating an algorithm that recommends even more?
"It is long past time to stop pretending that this approach doesn't come with a cost. A polarization of lost trust, and yes, of violence.
"A social dilemma cannot be allowed to become a social catastrophe."
Wow! Devastating. Any CEO who says all that cannot possibly partner with Facebook, because this kind of amoral and exploitative trickery is Facebook's entire business model.
A look at the battle to come
Facebook decided to help Epic Games in their lawsuit against Apple in any way they can.
Facebook also working on an antitrust lawsuit against Apple.
So it's clear that Facebook and Apple are going to war. And it's interesting to speculate on outcomes because both companies are so very powerful. It's a kind of a "Mexican standoff" situation, with each party pointing a gun at the other.
On the one hand, some 100 million Americans use iPhone. If in extremis Apple were to block the Facebook, Whatsapp and Instagram apps in the US then Facebook would lose nearly 100 million users.
On the other hand, Facebook has roughly 223 million US users. If Facebook were to pull its apps from the iOS platform, Apple risks losing future iPhone sales to people who want Facebook's apps on their phones.
But we're getting ahead of ourselves. The reality is that Apple and Facebook are in fact fundamentally incompatible companies that are going to war against each other.
Apple will win. Here are the eight reasons why.
Apple is right. Giving users choice over being tracked is the right thing to do. Tricking users into being tracked is the wrong thing to do.
Apple is on the right side of history. Globally, governments already require or will eventually require Facebook to do what Apple is requiring anyway. So Facebook’s days of tricking users into being tracked without their consent are numbered anyway.
Apple's users are more loyal. If users have to ultimately choose between Apple and Facebook, they'll choose Apple, because many users actually love Apple. But nobody loves Facebook. Everybody uses Facebook only because everybody uses Facebook.
Apple's users are more valuable. Facebook cannot afford to fail on Apple platforms, because Apple users are far more likely to buy things and spend more than on alternative platforms. Apple is where the money is for Facebook's advertisers.
Apple is more rational and objective. One problem Zuckerberg has at Facebook is that he's the sole founder, leading stockholder and unopposable leader of Facebook. As such, he almost certainly doesn't have any moderating forces on his decision-making. Comments like "We need to inflict pain" reveal an irrational mindset that won't serve Facebook well.
The worst case scenario is very unlikely. In the end, it's almost certain that Apple won't kick Facebook out of the app store, or that Facebook will pull its apps from the app store. What's more likely is that the end result will be Apple's preference — Users will choose tracking or no tracking. Most will choose no tracking. This will hurt Facebook financially. And attempts by Facebook to "inflict pain" on Apple — probably through secret algorithm changes that essentially blacklist Apple's interest from Facebook News Feeds, will harm Apple very little while ultimately causing blow-back on Facebook when the facts are revealed.
China. If Facebook wants to squeeze Apple, they’ll be able to do so only in some markets, but not in one of Apple’s biggest markets, which is China, where Facebook is banned.
Facebook will lose court cases, too. Facebook's legal case is that Apple is a monopoly. And in fact, I agree with that assessment. The question of monopoly depends on the answer to the question: What's the market? If the market is "mobile phones," then Apple is not a monopoly. If the market is "mobile phones that run the iOS operating system," then Apple owns a perfect monopoly. Though I believe the latter, the courts tend to go with the former. Attempts to nail down Apple as a monopolist have not generally succeeded in court or legislation.
There's no question that two of the world's most powerful companies in the world are going to war. And I believe the outcome is also not in question: Apple will win the war.