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If you’re Facebook, or any company really, getting broken up by the federal government would be bad. It’s messy, expensive, and has the potential to put whatever remains at a significant disadvantage. At one point, in an audio recording of a meeting with employees that was published by The Verge, Mark Zuckerberg called government efforts to regulate the company or even force it to divest of Instagram and WhatsApp, an “existential” threat.
At the time, Zuckerberg was referring to the potential of an Elizabeth Warren presidency, who had called for the company to be split apart. That, of course, never happened.
The government is, however, taking aggressive action that very well could result in the company being broken apart, at least if the FTC and 48 attorneys general from 46 states, the District of Columbia, and Guam have their way.
In the lawsuits, the government alleges that the world’s largest social media platform crushed competition either by acquiring companies before they became a threat or, when it couldn’t, by shutting down access to Facebook’s APIs, effectively killing off those companies. The most prominent acquisitions include Instagram and WhatsApp, for which Facebook spent $1 billion and $19 billion respectively.
Those purchases certainly contributed to Facebook’s position today as the most dominant social media company, and its spot as the second-largest advertising platform in the world (after Google). Instagram, on its own, now has 1 billion users.
You would think, then, that Facebook would be mounting an extraordinary effort to fight back. It wouldn’t be hard to imagine we might see the company using its powerful position as a tool of communication to tell its users how important the integration between Instagram and Facebook or WhatsApp is to their lives, and how all of that could change if the government gets its way.
But, that’s not the argument Facebook is making, at least not right now. Instead, Facebook is taking out full-page ads this week in three of the largest print newspapers to warn people about… Apple?
Based on its behavior, it’s pretty clear that Facebook really believes it is facing an existential threat, it’s just not what Zuckerberg predicted.
Apple and Facebook have gone back and forth over privacy for a while, though the fight has certainly intensified recently. Apple announced earlier this year that iOS 14, the current version of the software that powers the iPhone, would require apps to gain permission from users before they can track and collect their information. Apple also started requiring apps to identify what information they track in what is being referred to as “privacy nutrition labels,” within the iOS App Store.
Then, this week, came the ads where Facebook has accused Apple of both destroying small businesses, as well as putting the internet as we know it at risk. I know it sounds like I’m exaggerating, but I’m actually not.
In response, Tim Cook tweeted the following, which is about a direct a shot as I think we’ll ever get from the usually reserved CEO:
I’m not sure there has ever been a more clear and effective statement of the company’s position on privacy than that. Well, maybe when he says that Apple believes “that privacy is a fundamental human right.” As far as the upcoming change that Apple plans to make, this statement is really quite brilliant because it exposes exactly what Facebook is afraid of.
When I was younger, my parents were pretty clear about something–if you wanted to do something like borrow a toy from your brother, you had to ask for permission. Taking it without permission wasn’t okay.
The problem was, sometimes if I ask my brother, he might say no. When that happens, I don’t get to play with the toy. The same is true for Facebook. Many, if not most people, are likely to choose not to allow apps to track them. That seems pretty obvious. Except, for Facebook, that’s a problem because it very much depends on that tracking to make its highly-sophisticated targeted advertising platform work.
There are those who believe that the cases filed by the various government agencies will have a hard time either proving those cases or convincing a court that it should undo what the FTC itself failed to object to years ago when Facebook purchased Instagram and later WhatsApp.
Apple, on the other hand, is having no problem making its case. Which essentially is that if your business model will break just because people are given the choice about whether or not they want you to track them, there’s a problem with your business model. You might even say it’s an ‘existential’ one.
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