Facebook goes to war with Apple over ad privacy

Facebook further escalated its long-brewing fight with Apple this week, launching a second round of full-page newspaper ads Thursday charging that new Apple privacy measures will hurt small businesses. At the same time, Facebook is backing developers in a lawsuit against Apple's app store policies.

The big picture: Apple wants to give users the chance to opt out of being tracked by Facebook and other companies that sell ads. Facebook says the move will "change the internet as we know it — for the worse."

Driving the news: Facebook placed several full-page ads in prominent U.S. newspapers such as The New York Times, The Wall Street Journal and The Washington Post on Wednesday and again on Thursday, attacking Apple for using its data privacy efforts in an anti-competitive way.

• Apple's newest software updates ask users whether they want to allow apps like Facebook to track their activity.
• Facebook has long asserted that these changes will make it harder for small business to place targeted ads.
• "Apple plans to roll out a forced software update that will change the internet as we know it — for the worse," the ads said on Thursday. "We're standing up to Apple for small businesses everywhere," the ads said on Wednesday.
• Apple argues that the changes allow users to protect their privacy. “Users should know when their data is being collected and shared across other apps and websites — and they should have the choice to allow that or not," Apple said Wednesday.

Facebook is simultaneously going after Apple for leveraging what it believes to be anti-competitive business practices around its app store.

• The company said it would help Epic Games, the developer behind the popular game Fortnite, with its lawsuit against Apple for taking up-to-30% in commission from in-app purchases and subscriptions of apps purchased or downloaded through its app store, per The Wall Street Journal. (Apple has filed a countersuit against Epic.)
• On a call with reporters Wednesday, Facebook's VP of ads and business products Dan Levy said that Apple's privacy practices would make it harder for smaller publishers to make money from ads, which could force them to try to open up other types of revenue streams, like subscriptions, of which Apple would take a cut.

Yes, but: Critics argue that Facebook's interest in supporting small businesses is self-interested, since much of Facebook's revenue comes from small businesses buying ads on its platforms.

• On a call with reporters Wednesday, the company wouldn't say how much money it makes from ads targeting users based on data collected from Apple devices. It claimed Apple's move was the start of a much broader Apple effort to phase out targeted advertising altogether.
• Apple has never said that was its ambition.

The big picture: The battle between Facebook and Apple represents a growing rift in Silicon Valley over whether taking personal data to sell targeted ads is a fair trade when that subsidizes free services for users.

• Facebook, which makes 98% of its money from free ad-based services, feels strongly that user data — if collected safely and transparently — gives people access to services they want. Its position is aligned with other ad-based companies, like Google.
• Apple, which makes most of its money selling devices that store personal data, like pictures, notes and passwords, sees user privacy as a fundamental right.

Go deeper: Frenemies Facebook and Apple square off