Facebook Said to Consider Suing Apple Over App Store Practices

SAN FRANCISCO — Facebook has considered filing an antitrust lawsuit against Apple, two people familiar with the deliberations said, a move that could escalate tensions between two of the world’s most powerful technology companies.

Facebook executives discussed accusing Apple of anticompetitive actions in its App Store, said the people, who spoke on condition of anonymity because they were not authorized to speak publicly. The social network planned to say in a lawsuit that Apple gave preferential treatment to its own apps, while forcing restrictive rules onto third-party app developers like itself, the people said.

Facebook discussed filing the suit as recently as December, the people said. It is unclear if the company will move forward with any legal action.

The social network declined to comment on a potential lawsuit. “We believe Apple is behaving anti-competitively by using their control of the App Store to benefit their bottom line at the expense of app developers and small businesses,” a spokeswoman said.

An Apple spokesman declined to comment. The Information earlier reported the possibility of a suit.

Tensions between Apple and Facebook have been growing for months, rooted in how the companies are diametrically opposed on how they make money. Apple, which has made privacy a key tenet, prefers that consumers pay for their internet experience, leaving less need for advertisers. In contrast, Facebook relies on data about its users to fuel its digital advertising business.

Over time, the Apple chief executive, Timothy D. Cook, and the Facebook chief executive, Mark Zuckerberg, have increasingly taken thinly veiled shots at each other to underline their distaste for the other’s philosophies on advertising, targeting and privacy.

The friction ratcheted up after Apple announced changes last year to its upcoming software for iPhones that could harm Facebook’s business. Apple said it would clamp down on some data collection practices by developers and that it would allow iPhone owners to choose whether to allow companies to track them across different apps. That would likely hurt Facebook’s ability to collect user data to target ads.

Apple also recently began requiring developers to include privacy labels for their apps in the App Store, which detail an app’s information collection practices. In a recent analysis, The New York Times found that the privacy label for Facebook’s WhatsApp messaging app showed that it gathered far more information from people than another messaging app, Signal.

In response, Facebook has publicly pushed back against Apple. In December, Facebook created a website that slammed Apple’s moves as potentially harmful to small businesses. (It did not mention that the changes could hurt itself.) Facebook also took out full-page print ads in The New York Times, The Wall Street Journal and The Financial Times to declare that it was “standing up to Apple.”

Facebook’s line of attack against Apple echoes that made by other companies. Apple wields near absolute power over its App Store, deciding which apps make the cut and which don’t, and taking a 30 percent cut of their sales. In 2019, Spotify, the streaming music company, filed a complaint with European regulators, accusing Apple of using its App Store to squash companies that compete with its services, including Apple Music.

Last August, Epic Games, the creator of the popular game Fortnite, sued Apple for forcing developers to use its payment systems, accusing it of anticompetitive practices in the App Store. Facebook has said it would provide information to Epic in its lawsuit, so that the court would understand “the unfair policies that Apple imposes.” Epic, Spotify and others have also organized a nonprofit group called the Coalition for App Fairness to push for changes in app stores and to “protect the app economy.”

This week, Mr. Zuckerberg and Mr. Cook continued trading barbs.

On Wednesday, Mr. Zuckerberg said in a conference call with Wall Street analysts that he viewed Apple as one of Facebook’s “biggest competitors.” He cited iMessage, Apple’s iPhone-specific texting service, as an existential threat to Facebook’s social networking services.

He added that Apple had “every incentive to use their dominant platform position” to interfere with Facebook and other apps. Apple regularly treats its own apps more favorably in the App Store, he said.

On Thursday, Mr. Cook, speaking at an European data protection conference, said Apple’s new tracking features for apps and the new privacy labels were necessary because of a “data industrial complex” that has compromised consumer privacy.

“It seems no piece of information is too private or personal to be surveilled, monetized and aggregated into a 360-degree view of your life,” Mr. Cook said. “Some may think that sharing this degree of information may be worth it for more targeted ads. Many others, I suspect, will not.”

Source: Read Full Article