Apple's Privacy Rules to Blame for Facebook's Lower Than Expected Quarterly Growth, Says Zuckerberg

Apple's privacy rules are "negatively affecting" Facebook, and its business, Facebook CEO Mark Zuckerberg claimed during its most recent earnings call.

tim cook mark zuckerberg
As a quick refresher, starting with iOS 14.5 and all newer versions of iOS and iPadOS, Apple requires that apps ask for users' permission to track them across other apps and websites. Under the App Tracking Transparency (ATT) framework, the latest change gives users a choice on whether they wish to be tracked for ads or other purposes.

In the weeks leading up to ATT's launch, Facebook was vocal about its displeasure with the change, explicitly framing it as unfavorable for small businesses who use its platform to target customers. When users opt-out of tracking, Facebook and other ad providers have less data for targeted advertisement, possibly, in one example provided by Facebook, making it harder for local businesses to target ads to potential customers nearby.

Continuing on its anti-Apple's privacy rules campaign, Facebook CEO Mark Zuckerberg was quick to blame Apple for his company's lower than expected growth in the third quarter of the year. Kicking off the earnings call, Zuckerberg said Apple is "negatively affecting" Facebook but that he believes the company will be able to "navigate" the challenges Apple is presenting thanks to its long-term investments.

As expected, we did experience revenue headwinds this quarter, including from Apple's changes that are not only negatively affecting our business, but millions of small businesses in what is already a difficult time for them in the economy. Sheryl and Dave will talk about this more later, but the bottom line is we expect we'll be able to navigate these headwinds over time with investments that we're already making today.

While Zuckerberg and the Facebook executive team hold Apple's changes accountable for this quarter's performance, it may also be an asset. Zuckerberg has in the past stated that ATT could ultimately help Facebook, and it's a sentiment he again repeated during the earning's call.

Apple's changes, according to Zuckerberg, are making "e-commerce and customer acquisition less effective on the web." Still, Facebook could benefit from the lessened effectiveness as "solutions that allow businesses to set up shop right inside our apps will become increasingly attractive," Zuckerberg added.

Facebook's chief operating officer, Sheryl Sandberg, also criticized Apple and its privacy rules, going as far as to claim that the new rules are negatively impacting Facebook while benefiting Apple's own advertising business.

We've been open about the fact that there were headwinds coming – and we've experienced that in Q3. The biggest is the impact of Apple's iOS14 changes, which have created headwinds for others in the industry as well, major challenges for small businesses, and advantaged Apple's own advertising business.

Despite Facebook facing an avalanche of pressure amid leaked internal documents and scrutiny, Sandberg pointed the finger at Apple for Facebook's lackluster performance this quarter. "Overall, if it wasn't for Apple's iOS 14 changes, we would have seen positive quarter-over-quarter revenue growth," Sandberg said.

One document as part of a trove of internal documentation leaked to the press this week indicates that Facebook is increasingly concerned about the youth demographic on its platform. Specifically, Facebook wants to take additional steps to make its platform more attractive to younger users, a portion of the online audience that is increasingly shying away from Facebook, according to leaked company documents.

One area in which Facebook hopes to achieve a more appealing look to younger users is by steering them away from Apple's iMessage platform. Zuckerberg said during the earnings call that iMessage is "growing in popularity," potentially posing a risk to some of Facebook's messaging platforms, such as Messenger.

Apple has time and time again defended App Tracking Transparency, claiming it simply wants to give users a choice on whether to be tracked or not. In a video posted to its YouTube channel following ATT's launch, Apple said that "some apps have trackers embedded in them that are taking more data than they need. Sharing it with third parties, like advertisers and data brokers... This has been happening without your knowledge or permission. Your information is for sale. You have become the product."

Apple's CEO, Tim Cook, has also been vocal about Facebook in the past. At a speech at a privacy conference earlier in the year, Cook implied that platforms such as Facebook lead to polarization and violence. "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," Cook said.

Top Rated Comments

Kulfon Avatar
8 months ago
Ideally FB has no revenue at all, this world will be a bit better:-)
Score: 118 Votes (Like | Disagree)
LeeW Avatar
8 months ago
Excellent, FB is digital cancer.
Score: 83 Votes (Like | Disagree)
MrMaxwell Avatar
8 months ago
Zuck blaming Apple for reduced earnings is like blaming the police for a reduction in crime…it’s a good thing you idiot ?
Score: 62 Votes (Like | Disagree)
Unggoy Murderer Avatar
8 months ago
Excellent. Long may it continue.
Score: 54 Votes (Like | Disagree)
asdex Avatar
8 months ago
+1 for Apple!
Score: 43 Votes (Like | Disagree)
davidako Avatar
8 months ago
Typo in headline: [S]blame[/S] praise
Score: 35 Votes (Like | Disagree)

Related Stories

facebook meta

Facebook Wants to Open 'Welcoming' Retail Stores Where People Can Experience the 'Metaverse'

Friday November 5, 2021 4:17 am PDT by
Facebook, now rebranded to Meta, is looking to open physical retail stores where customers will be able to experience the wide range of products it has to offer, such as Oculus headsets, in a "welcoming" and "judgment-free" experience, according to a new report from The New York Times. The report says that Facebook executives began floating the idea of a physical retail store last year, but...
tim cook mark zuckerberg

Tim Cook Urged Mark Zuckerberg to Delete User Data From 3rd Party Apps in Private 2019 Meeting

Monday April 26, 2021 4:33 am PDT by
At a private meeting on the sidelines of an informal gathering of tech and social media executives in July of 2019 in Sun Valley, Idaho, Apple CEO Tim Cook urged Facebook CEO and founder Mark Zuckerberg to delete all user information his company has collected from third-party apps, according to The New York Times. According to the Times, the executives met annually at the conference...
Facebook Feature

Facebook Bringing Voice and Video Calling Back to Main App After Moving Them to Messenger

Monday August 23, 2021 4:09 pm PDT by
Facebook is re-adding voice and video calling features to its main Facebook app after moving the features to Messenger back in 2014, reports Bloomberg. Users in some countries including the United States are now able to make voice or video calls directly from the Facebook app. As of now, Facebook is testing the feature, which is meant to cut down on the number of times that Facebook users...
generic tracking prompt green

Report: iOS Users Who Opt-Out of App Tracking Continue to Be Tracked by Facebook and Snapchat

Wednesday December 8, 2021 5:50 am PST by
"Loose" interpretations of Apple's privacy policies allow apps such as Facebook and Snapchat to continue tracking users for targeted advertising even when they have asked to not be tracked, The Financial Times reports. In May, Apple launched its App Tracking Transparency feature that allows users to opt-out of being tracked across apps and websites for advertising purposes. Seven months...
Facebook Feature

Facebook's New 'Privacy Center' Will Help Educate Users on Data Collection and Privacy Options

Friday January 7, 2022 8:41 am PST by
Facebook today announced a new "Privacy Center" section on its website on the desktop. This new area will offer users a "new place to learn more about our approach to privacy across our apps and technologies" and "provides helpful information about five common privacy topics," Meta announced today in a press release. The new Privacy Center, rolling out to a small pool of Facebook users in...
Facebook Watch Feature

Facebook Wants to Replace Your Apple Watch

Friday August 6, 2021 3:05 am PDT by
Facebook is developing a health and messaging-focused smartwatch to compete with the Apple Watch, according to recent reports. The Information and The Verge have reported Facebook's internal plans to bring an Apple Watch-style smartwatch to market. Facebook's smartwatch is said to work with a cellular connection without the need for a tethered smartphone. It will apparently run a version...
Facebook Hacked Feature

Mark Zuckerberg's Details Leaked in Facebook Data Breach

Wednesday April 7, 2021 7:08 am PDT by
Facebook CEO Mark Zuckerberg's own personal information was among the details of 533 million Facebook users that leaked in a data breach, it has emerged. Facebook has now confirmed that the leaked data was obtained not by a hack, but by scraping the platform prior to September 2019. The company now says that an exploit was found in its contact importer, but the "specific issue that allowed...
facebook

Facebook Crowned 'Worst Company of 2021' by New Survey

Sunday December 19, 2021 3:47 am PST by
Facebook, otherwise known as Meta, has been crowned the worst company of the year, following a turbulent 12 months of controversies, public backlash, and an eventual entire rebrand of the social media giant, according to a survey conducted by Yahoo Finance. Yahoo Finance every year crowns the best company of the year, with Microsoft taking the top spot for 2021. This year, however, Yahoo...

Popular Stories

iPhone 14 Pro Purple Front and Back MacRumors Exclusive

iPhone 14 Pro Renders Highlight Multiple Design Changes

Wednesday May 25, 2022 8:56 am PDT by
Leaker Jon Prosser today shared ostensibly accurate renders of the iPhone 14 Pro, providing the most accurate look yet at what the device could look like when it launches later this year. In the latest video on YouTube channel Front Page Tech, Prosser revealed renders of the iPhone 14 Pro made by Apple concept graphic designer Ian Zelbo, highlighting a range of specific design changes...
iPhone 13 Always On Feature

iPhone 14 Pro Screen Refresh Rate Upgrade Could Allow for Always-On Display

Tuesday May 24, 2022 7:23 am PDT by
Last year's iPhone 13 Pro models were the first of Apple's smartphones to come with 120Hz ProMotion displays, and while the two iPhone 14 Pro models will continue to feature the technology, their screens could well boast expanded refresh rate variability this time round. To bring ProMotion displays to the ‌iPhone 13 Pro models‌, Apple adopted LTPO panel technology with variable refresh...
iPad Pro USB C Feature Coral

Deals: Apple's iPad Pro Reaches Up to $449 Off in Amazon's Latest Sales

Wednesday May 25, 2022 10:09 am PDT by
Amazon is marking down a wide variety of 11-inch and 12.9-inch iPad Pro models this week, with prices starting as low as $749.00 for the 11-inch tablet. You'll find the full list of sales below, all of which can be found on Amazon. Note: MacRumors is an affiliate partner with some of these vendors. When you click a link and make a purchase, we may receive a small payment, which helps us keep...
apple account card

Wallet App Now Supports Apple Account Cards on iOS 15.5

Wednesday May 25, 2022 5:01 pm PDT by
Apple appears to have recently updated the Wallet app to allow users to add an Apple Account Card, which displays the Apple credit balance associated with an Apple ID. If you receive an App Store or Apple Store gift card, for example, it is added to an Apple Account that was previously visible in the App Store and Apple Store apps. As of today, the Apple Account balance can also be added to...
Apple Tap to Pay iPhone

Apple Stores Rolling Out iPhone-to-iPhone Contactless Payments Starting Today

Wednesday May 25, 2022 6:54 am PDT by
Apple in February unveiled a new "Tap to Pay on iPhone" feature that will allow compatible iPhones to accept payments via Apple Pay, contactless credit and debit cards, and other digital wallets, with no additional hardware required. Apple began testing the feature at its Apple Park Visitor Center earlier this month, and now Bloomberg's Mark Gurman has tweeted that the feature will begin...
apple wwdc 2022

Apple Shares WWDC 2022 Schedule, Keynote to Take Place June 6 at 10:00 a.m PT

Tuesday May 24, 2022 9:06 am PDT by
Apple today confirmed that the keynote event for the Worldwide Developers Conference will begin at 10:00 a.m. Pacific Time on June 6, the first day of WWDC. The keynote will be an online-only event, though a select number of developers have been invited to the Apple Park campus for a viewing event. In addition to confirming the keynote date and time, Apple has shared the full WWDC 2022...