Why Facebook is considering an antitrust lawsuit against Apple

Facebook Inc. and Apple Inc. are edging perilously close to all-out legal war, with the social-media giant strongly considering a lawsuit that could ultimately sway antitrust investigators.

The conflagration centers on Apple’s
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new iOS 14 policy, due this spring. It includes new privacy features that will for the first time require apps to ask for users’ permission to track them around the web. Such a feature, Facebook
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claims, would severely limit online advertising and kill small businesses in the process.

Tension between the companies has escalated for years to the point where Facebook is considering suing Apple for giving preferential treatment to its own apps while imposing restrictive rules on third-party apps from Facebook and others, according to reports.

“As we have said repeatedly, 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 Facebook spokeswoman said in a statement to MarketWatch.

Apple had no comment.

Facebook, which launched a series of print and digital ads in December to make its point, drilled home its animus during an earnings call with analysts on Wednesday.

“We are also seeing Apple’s business depend more and more on gaining share in apps and services against us and other developers,” Facebook Chief Executive Mark Zuckerberg said during the call. “So Apple has every incentive to use their dominant platform position to interfere with how our apps and other apps work, which they regularly do to preference their own.”

Apple CEO Tim Cook ratcheted the hostility Thursday without mentioning Facebook by name.

“If a business is built on misleading users, on data exploitation, on choices that are not choices at all, then it does not deserve our praise. It deserves reform,” Cook said at the online-only Computers, Privacy and Data Protection conference on Thursday. “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 their high rates of engagement? What are the consequences of not just tolerating but rewarding content that undermines public trust in lifesaving vaccinations? What are the consequences of seeing thousands of users join extremist groups, and then perpetuating an algorithm that recommends even more?”

The simmering conflict underscores contrasting business approaches: Apple slavishly harps on the philosophy of consumer privacy in which the customer pays for their internet experience. Facebook, by contrast, relies on data about its members to fuel its digital advertising business.

Read more: Facebook and Apple Embody New Tech Divide

Ironically, a legal showdown between the tech titans could hurt them on the antitrust front, since both are under investigation for the very things they are accusing one another of, says Elizabeth Renieris, founding director of the Notre Dame-IBM Technology Ethics Lab at the University of Notre Dame.

“What this feud demonstrates more than anything is that Facebook and Apple have tremendous gatekeeping powers over the market,” she told MarketWatch.

“It demonstrates just how much Facebook controls access to customers or audiences through its ads ecosystem,” Renieris said. “At the same time, the dispute reveals how much power Apple has to mediate access to our personal data through its engineering choices and policy decisions.”

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