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Apple’s app tracking policy reportedly cost social media platforms nearly $10 billion in revenue


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An investigation by The Financial Times found that Snapchat, Facebook, Twitter, and YouTube lost around $9.85 billion in revenue following Apple’s changes to its privacy practices. Last year, Apple announced the App Tracking Transparency (ATT) policy that requires apps to ask permission to track users’ data. The policy went into effect in April, barring apps from tracking users if they opt out.

 

Facebook notably criticized the move with a full-page newspaper ad, and thanks to the FT’s report, now we know why company leaders were so frustrated. According to the report, Facebook lost the most money “in absolute terms” when compared to other social platforms due to its massive size. Meanwhile, Snap “fared the worst as a percentage of its business” because its advertising is mainly tied to smartphones, which makes sense for a product that doesn’t have a desktop version.

 

“Some of the platforms that were most impacted — but especially Facebook — have to rebuild their machinery from scratch as a result of ATT,” adtech consultant Eric Seufert told FT. “My belief is that it takes at least one year to build new infrastructure. New tools and frameworks need to be developed from scratch and tested extensively before being deployed to a high number of users.”

 

 

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  • Commissar SFLUFAN changed the title to Apple’s app tracking policy reportedly cost social media platforms nearly $10 billion in revenue

The actual FT article says that this makes the case for greater regulation:

 

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In some ways, the companies damaged by the privacy rules have only themselves to blame. The $400bn digital advertising market has historically relied on an intrusive and unpopular business model. If Apple customers were genuinely unconcerned about tracking, they would not be saying no.

 

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It is disturbing that a business decision by one company can crush the revenues of so many others. Yet that happens all the time with the big gatekeeper companies. Apple and Google repeatedly draw criticism and lawsuits for the commissions they charge on smartphone apps. Here, too, a rules tweak can make the difference between profits and penury for developers.

 

There is also something unsavoury about the way these changes have boosted Apple's profits. Like Google, it gathers granular data directly and its ad business has gained market share as rivals struggle. The services business, which includes advertising, set records this quarter for both revenue of $18.3bn and profit margin of 70.5 per cent.

 

 

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If Congress can get beyond partisan divides, it will find an apt historical precedent: 19th-century railroads. The for-profit companies that built America's rail networks opened up the continent to development, creating personal and business opportunities that had not previously existed.

 

They also wielded monopoly power in the areas they served: new railway stations could create viable towns, and closures could destroy them. Variations in freight rates determined whether businesses were profitable. While some of the decisions were justified, the rail companies notoriously favoured large shippers or buyers with rebates while squeezing small farmers.

 

 

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Like the railroads, Big Tech has opened up new markets while amassing immense power in a previously ungoverned area. And the march of so-called progress continues. Facebook has announced plans to dominate the newest digital sphere, the virtual reality "metaverse". Regulators need to catch up. We need a Cyberspace Commerce Commission to start setting boundaries. And we need it soon.

 

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People care enough to check a box that says DO NOT TRACK when one is put right in front of their face, but I don't think they care enough to spend more money on Apple products because of it.

 

If you had to go into settings and click a box, I bet the percentage of people would be like 5%.

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36 minutes ago, ort said:

People care enough to check a box that says DO NOT TRACK when one is put right in front of their face, but I don't think they care enough to spend more money on Apple products because of it.

 

If you had to go into settings and click a box, I bet the percentage of people would be like 5%.

 

"Care" isn't the right word here at all.

 

Nobody likes ads while they're browsing the web, but there are tons of non-tech savvy people who will just never google "ad blocker" because it won't occur to them that this is a thing they could do. Same thing here, yeah, if the button to disable tracking was 3 Russian dolls deep in a settings menu somewhere and not put directly in front of them, dramatically fewer people would find it and push it. That doesn't mean they don't care.

 

57 minutes ago, sblfilms said:

My understanding is that this has been good for Apple’s bottom line, so certainly not altruistic in their part. But a net win for consumers is still a win.

 

Yeah I'm landing here as well. The main reason companies like Facebook are so wildly profitable is data access. But it's collected in the absolute shittiest way possible, very few attempts have been made to make it any better, and whenever they get busted for their umpteenth breach they act like the data is essentially worthless based on how they react, so fuck it.

 

Again this shit should all be regulated. Gaming companies got scared enough of loot box regulation that they pivoted before the headsman could wind up his swing, and now the industry is steering the ship into the iceberg that is blockchain gaming. We should assume that all of these companies are going to act in the worst possible faith at every conceivable moment and regulate them accordingly.

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