Show an ad over header. AMP

Frenemies Facebook and Apple square off

Facebook and Apple are fighting an increasingly high stakes battle over user privacy and access to the iOS App Store, deepening a rift between two of the most powerful companies in Silicon Valley.

Why it matters: The two companies,along with Google and Amazon, are being challenged over a range of issues, from abuse of power to violations of privacy to allowing hate and misinformation to flourish. By trading accusations, Facebook and Apple could just be handing more ammo to critics and regulators — but at the same time, conflict between these giants could be read as a sign of competitive life and a rebuttal to antitrust charges.

Driving the news: A new version of Apple' iOS limits the use of some kinds of user-tracking tech that advertisers on Facebook use to target individuals, and last week Facebook warned that the change would reduce the ads' effectiveness and cut into revenue.

  • At a Thursday companywide meeting, per Buzzfeed, Facebook CEO Mark Zuckerberg said Apple has a "unique stranglehold as a gatekeeper on what gets on phones,” that it "blocks innovation, blocks competition” and “charge[s] monopoly rents.”
  • Zuckerberg's charge follows a number of high-profile cases in which app developers — including the maker of the phenomenally popular game Fortnite — have challenged Apple's rules for controlling App Store revenue.

The big picture:

  • Facebook, as the owner of the world's largest social network, has also become a key source by which Americans get their news and entertainment. But Apple, with products like Apple News, Apple News+, and Apple TV+, is competing to be an information destination.
  • Apple has made the iPhone the most popular high-end phone brand in the U.S., though it splits the overall market with Android. That lets Apple wield a tight grip on software makers' access to the most lucrative customers. But some third-party developers have long complained that Apple throws its weight around, and Facebook has now joined them.

Between the lines: For years, Apple's biggest enemy in Silicon Valley was Google, which created the Android operating system that took off after the iPhone's debut and now controls three quarters of the global smartphone market.

  • Apple founder Steve Jobs stewed over what he saw as a betrayal and launched a giant, now-settled legal battle alleging Samsung and Google essentially copied the iPhone.
  • More recently though, Apple's ire has been pointed at Facebook. Google, like Facebook, makes its money targeting its users with ads.

Apple's argument: For years Apple has proudly positioned the iPhone as a more secure and more private alternative to the Android competition.

  • As Facebook and Google have faced mounting criticism for their user tracking, Apple CEO Tim Cook has frequently joined the chorus.
  • In 2018 Cook declared that privacy was "a fundamental human right" as he announced Apple would effectively ban Facebook's ubiquitous "like" button from working outside of Facebook's own pages and apps.

Flashback: The animosity isn't just over philosophy and business models. In 2019, Apple shut down a Facebook "research" app that allowed Facebook to pay users so it could track everything they did on their phones.

  • Then Apple also temporarily cut off Facebook's own developers from access to test versions of their iOS software as well.
  • The move was widely viewed in the industry as Apple delivering a sharp rap on the knuckles to Facebook — and a public demonstration of how hard it would come down on developers who failed to take privacy seriously.

Yes, but: However hot the fight gets, these two companies need each other. Just as Apple risks losing business in China if it can't offer WeChat, it would lose a lot of customers in the U.S. and elsewhere if Facebook's services — including WhatsApp and Instagram — were not available for the iPhone. By the same token, many of Facebook's most valuable customers access the service via Apple devices.

Our thought bubble: Each company has plenty of ammunition to attack the other as a monopolist, and that's why critics argue they should both be under closer antitrust scrutiny.

  • Historically, the big tech companies have maintained power by dominating a key market while competing with one another at the edges. The Apple-Facebook fight shows that they're now willing to take swings at each other's core businesses.

TikTok gets more time (again)

The White House is again giving TikTok's Chinese parent company more time to satisfy its national security concerns, rather than initiating legal action, a source familiar with the situation tells Axios.

The state of play: China's ByteDance had until Friday to satisfy national security concerns raised by the Committee on Foreign Investment in the U.S. (CFIUS), which is chaired by Treasury secretary Steve Mnuchin. This was the company's third deadline, with CFIUS having provided two earlier extensions.

Keep reading... Show less

Federal judge orders Trump administration to restore DACA

A federal judge on Friday ordered the Trump administration to fully restore the Deferred Action for Childhood Arrivals program, giving undocumented immigrants who arrived in the U.S. as children a chance to petition for protection from deportation.

Why it matters: DACA was implemented under former President Obama, but President Trump has sought to undo the program since taking office. Friday’s ruling will require Department of Homeland Security officers to begin accepting applications starting Monday and guarantee that work permits are valid for two years.

Keep reading... Show less

Bay Area counties to enact stay-at-home order

Counties around the San Francisco Bay Area will adopt California’s new regional stay-at-home order amid surges in cases and ICU hospitalizations, health officials said Friday.

The big picture: California Gov. Gavin Newsom announced a three-week stay-at-home order on Thursday that would go into effect in regions with less than 15% ICU capacity. Despite the Bay Area’s current 25.3% ICU capacity, health officials from Alameda, Contra Costa, Marin, Santa Clara, San Francisco and the city of Berkeley are moving ahead with a shelter-in-place mandate in the hopes of reducing risk.

Keep reading... Show less

Podcast: Former FDA chief Rob Califf on the COVID-19 vaccine approval process

The U.S. Food and Drug Administration (FDA) is reviewing two emergency use authorization requests for COVID-19 vaccines, with an outside advisory committee scheduled to meet next Thursday to review data from Pfizer and its German partner BioNTech.

Axios Re:Cap digs in with former FDA commissioner Rob Calif about the EUA process, the science and who should make the final call.

The U.S. economic recovery needs rocket fuel

Data: BLS. Chart: Axios Visuals

Friday's deeply disappointing jobs report should light a fire under Congress, which has dithered despite signs the economy is struggling to kick back into gear.

Driving the news: President-elect Biden said Friday afternoon in Wilmington that he supports another round of $1,200 checks.

Keep reading... Show less

CDC: It's time for "universal face mask use"

The CDC is urging “universal face mask use” for the first time since the coronavirus pandemic began, citing recent case spikes as the U.S. has entered a phase of “high-level transmission” before winter officially begins.

Why it matters: Daily COVID-related deaths across the U.S. hit a new record on Wednesday. Face coverings have been shown to increase protection of the wearer and those around them, despite some Americans' reluctance to use them.

Keep reading... Show less

Saudi Arabia and Qatar near deal to end standoff, sources say

Saudi Arabia and Qatar are close to a deal to end the diplomatic crisis in the Gulf following U.S.-mediated reconciliation talks this week, sources familiar with the talks tell me.

Why it matters: Restoring relations between Saudi Arabia and Qatar would bring a sense of stability back to the Gulf after a 3.5 year standoff. It could also notch a last-minute achievement for the Trump administration before Jan. 20.

Keep reading... Show less

President of Soros foundation leaves amid speculation of potential Biden role

Patrick Gaspard, who served as ambassador to South Africa under President Barack Obama, is stepping down as president of George Soros' Open Society Foundations, fueling speculation that he'll join the Biden administration, potentially as Labor secretary.

What to know: Before his stint as ambassador, Gaspard was Obama's political director in the White House, drawing upon his experience in the labor movement to advance Obama's legislative agenda on health care and financial services reform.

Keep reading... Show less



Get Goodhumans in your inbox

Most Read

More Stories