Update as of Feb 17, 2021: This blogpost has been updated to add information about reports of litigation from Facebook

Facebook has recently launched a campaign touting itself as the protector of small businesses. This is a laughable attempt from Facebook to distract you from its poor track record of anticompetitive behavior and privacy issues as it tries to derail pro-privacy changes from Apple that are bad for Facebook’s business.

This is such a fundamental threat to Facebook's business that there are reports the company is preparing and antitrust lawsuit against Apple and launching their own preemptive explanation screens to try to convince users.

Facebook’s campaign is targeting a new AppTrackingTransparency feature on iPhones that will require apps to request permission from users before tracking them across other apps and websites or sharing their information with and from third parties. Requiring trackers to request your consent before stalking you across the Internet should be an obvious baseline, and we applaud Apple for this change. But Facebook, having built a massive empire around the concept of tracking everything you do by letting applications sell and share your data across a shady set of third-party companies, would like users and policymakers to believe otherwise.

Make no mistake: this latest campaign from Facebook is yet another direct attack against our privacy and, despite its slick packaging, it’s also an attack against other businesses, both large and small.

Apple’s Change

Apple has deployed AppTrackingTransparency for iOS 14, iPadOS 14, and tvOS 14. This kind of consent interface is not new, and it’s similar for other permissions in iOS: for example, when an app requests access to your microphone, camera, or location. It’s normal for apps to be required to request the user permission for access to specific device functions or data, and third-party tracking should be no different. (In an important limitation of AppTrackingTransparency, however, note that this change does not impact first-party tracking and data collection by the app itself.) 

Allowing users to choose what third-party tracking they will or will not tolerate, and forcing apps to request those permissions, gives users more knowledge of what apps are doing, helps protect users from abuse, and allows them to make the best decisions for themselves. You can mark your AppTrackingTransparency preferences app by app, or set it overall for all apps.

This new feature from Apple is one more step in the right direction, reducing developer abuse by giving users knowledge and control over their own personal data.

Small Business and the Ad Industry

So why the outcry from Facebook? Facebook claims that this change from Apple will hurt small businesses who benefit from access to targeted advertising services, but Facebook is not telling you the whole story. This is really about who benefits from the normalization of surveillance-powered advertising (hint: it’s not users or small businesses), and what Facebook stands to lose if its users learn more about exactly what it and other data brokers are up to behind the scenes.

For many years now, the behavioral advertising industry has promoted the notion that behavioral, targeted ads are better. These are the ads that track you everywhere you go online, with sometimes eerily accurate results. This is in contrast to “contextual” or non-targeted ads, which are based not on your personal information but simply on the content of the webpage you are visiting at the time. Many app developers appear to believe the targeted advertising hype. But are targeted ads better? And for whom are they actually better?

In reality, a number of studies have shown that most of the money made from targeted advertising does not reach the creators of the content—the app developers and the content they host.  Instead, the majority of any extra money earned by targeted ads ends up in the pockets of these data brokers. Some names are very well-known, like Facebook and Google, but many more are shady companies that most users have never even heard of.  

Bottom line: "The Association of National Advertisers estimates that, when the “ad tech tax” is taken into account, publishers are only taking home between 30 and 40 cents of every dollar [spent on ads]." The rest goes to third-party data brokers who keep the lights on by exploiting your information, and not to small businesses trying to work within a broken system to reach their customers.

The reality is that only a handful of companies control the online advertising market, and everyone else is at their mercy. Small businesses cannot compete with large ad distribution networks on their own. Because the ad industry has promoted this fantasy that targeted advertising is superior to other methods of reaching customers, anything else will inherently command less value on ad markets. That not only means that ads have a lower ad value if they aren’t targeting users, but it also drives the flow of money away from innovation that could otherwise bring us different advertising methods that don’t involve invasive profiling and targeting.

Facebook touts itself in this case as protecting small businesses, and that couldn’t be further from the truth.

Facebook touts itself in this case as protecting small businesses, and that couldn’t be further from the truth. Facebook has locked them into a situation in which they are forced to be sneaky and adverse to their own customers. The answer cannot be to defend that broken system at the cost of their own users’ privacy and control. 

To begin with, we shouldn’t allow companies to violate our fundamental human rights, even if it’s better for their bottom line. Stripped of its shiny PR language, that is what Facebook is complaining about. If businesses want our attention and money, they need to do so by respecting our rights, including our right to privacy and control over our data. 

Second, we recognize that businesses are in a bind because of Facebook’s dominance and the overpromises of the ad industry. So if we want small businesses to be able to compete, we need to make it a level playing field. If one app needs to ask for permission, all of them should, including Facebook itself. This points the way, again, to the need for a baseline privacy law that protects and empowers users. We hope app developers will join us in pushing for a privacy law so that they can all compete on the same grounds, instead of the worst privacy violators having (or, being perceived as having) a leg up.  

If we want small businesses to be able to compete, we need to make it a level playing field.

Overall, AppTrackingTransparency is a great step forward for Apple. When a company does the right thing for its users, EFF will stand with it, just as we will come down hard on companies that do the wrong thing. Here, Apple is right and Facebook is wrong. Next step: Android should follow with the same protections. Your move, Google.