Apple and Facebook are about to go to war—legally speaking. Why? Privacy.
Apple is rolling out new privacy features that will make it harder for apps (like Facebook) to track and collect user data. Facebook believes this is an abuse of Apple’s iOS distribution domination.
While Apple touts itself as a champion of user privacy, Facebook cannot survive without your data. At stake are billions of dollars—and the future of the Internet.
Can Facebook afford to lose this fight?
Does Apple really care about user privacy?
Who’s likely to prevail?
Join us as we delve deeply into this big tech battle.
Apple and Facebook are about to go to war—legally speaking. Why? Privacy.
Apple is rolling out new privacy features that will make it harder for apps (like Facebook) to track and collect user data. Facebook believes this is an abuse of Apple’s iOS distribution domination.
While Apple touts itself as a champion of user privacy, Facebook cannot survive without your data. At stake are billions of dollars—and the future of the Internet.
Can Facebook afford to lose this fight?
Does Apple really care about user privacy?
Who’s likely to prevail?
Join us as we delve deeply into this big tech battle.
Henry: Hey everyone. It's Henry Mike and Chris of the decentralists and this hot topic is kind of a funny one actually, but it's almost ludicrous. We call, clash of the Titans. Now, if you can believe it, we've got Facebook, massive gorilla is seriously suing apple, another massive gorilla. These are a couple of the largest IT companies in the world and they are at each other's throats and the funny thing is there's not a single government involved, so this is going to be bloody. Mike has been bothering me. He's been bugging me for a week let’s because he has so much to say about it. So, Mike, I'm going to let you start but I also know Chris has some great stuff to add. So, Mike, go for it.
Mike: Thank you, Henry. Well, first let's call out clash of the Titans, the eighties movie. It was fantastic. Love that one but this one is actually kind of funny. It's one of the most iconic stories that's happened and I think it's going to end up this year being one of the biggest stories in tech is Facebook. So, Facebook is suing apple for anti-competitive behaviour. Believe it or not. I mean, seriously, there's not a congressman or Congresswoman or Senator to be found in this thing. It is usually for the last couple of years, you're seeing Zuckerberg, you're seeing, Tim Cook, sitting in that they have that really awkward big table. That's where there's the horseshoe and a thousand cameras and they're facing the senators and the congressmen and all the microphones and they're basically getting grilled as to their anti-competitive behaviour.
The things that they have monopolies over, right. Google gets nailed for searches and advertising. Apple gets nailed for its app store and the kind of closed environment that they operate. Facebook gets nailed for everything because they are literally can't be trusted with anything. So, I think they're like the definition of antitrust, but what's happening now is they are Facebook is taking Umbridge with some recent things that Apple has done with their OS. So, Chris, tell us what Facebook's problem is, what Zuckerberg, all in a tizzy about.
Chris: We both have to look at what these companies are to get a big picture of what's going on. So, Facebook is in the business of scooping up your data. Apple is in the business of selling you a lifestyle and these two things are diametrically opposed to each other because privacy is the new happening thing. People are willing to pay for it. VPNs, for example, are a $23.6 billion industry and apple want to give the people what they want.
Henry: You think apple is just ping on an opportunity here seeing that privacy is going to be very hot and very big. I think so.
Chris: Oh yeah. It's one of the ways they differentiate themselves from, Google, when they put out that fingerprint reader, the amount of press they got from that. It was incredible. Especially the circumstance where I think the FBI, couldn't get into some criminals, iPhone, and they tried to Sue apple to get the credentials into it and apple just refused to give it to them. I don't know about you, but as a consumer, I was applauding apple and going, wow. These guys are heroes.
Henry: Fair enough. So, they're going down the privacy road big time and that's good.
Chris: But Facebook's the opposite because their business model requires, your personal information.
Henry: So, they can sell Ads.
Chris: So, they could sell ads. Exactly. So, what's going on is apple is changing how apps gather this information on all iOS devices and they're changing this with iOS 15. Where now companies that collect your data have to be more upfront about it and obviously Facebook does not want to be upfront about it because, okay.
Henry: What do you mean by upfront.
Chris: So, if you want a third party, if you want to opt-out of third-parties collecting personal data, you have to go into the apple settings, on your phone and go deep into a bunch of menus and opt-out. Coming with iOS 15, this is just going to be the default.
Henry: Is that right. You mean you're opted out as a default.
Chris: You're opted out as a default. Beautiful. So, now Facebook has to follow a different set of rules. Let me explain why is this such a big deal to Facebook and why they're suing it's because Facebook has three prominent apps and 96% of usage on these three prominent apps.
Mike: That's Facebook, Instagram, and WhatsApp, right.
Chris: That's right. They're done on mobile devices.
Henry: Oh, 96% of the people using them. Oh, okay.
Chris: That's right. So, you take away whatever the market share Apple has at the moment. I think last time I checked; it was like 25%. You take away 25% of mobile users.
Mike: Oh. and remember, that's 25 are usually categorized as the richest mobile service.
Henry: Wait a second. Don't they have half the business and Android the other half?
Mike: No, not in terms of handset sold.
Henry: Okay.
Mike: All right. I mean, all of these, everybody who basically has money has an iPhone, that's a generalization. But you have to have a certain kind of a level of wealth or whatever, Henry, to be able to buy a $1,200 phone, a $1,200 phone, whereas Android, you can go out and you can buy a phone for 50 bucks.
Chris: Unlike Google, Amazon, and Apple, Facebook doesn't have any runaway consumer hardware devices that keep you locked into the Facebook ecosystem. There is no Facebook phone when they tried to do it, it was a gigantic flop. So, there’s no Facebook, mobile OS coming out. What this means is that Facebook is largely dependent upon Google and apple to keep, relevant and they don't like that.
Henry: Isn't that interesting and I've also heard that Apple's considering creating a lower-cost Apple iPhone as well and if they do that, then they'll have an even greater share.
Mike: For sure and I mean, Henry it's not always about the money. One of the other things it's about with apple is, back in the days you were way early, and I'm dating myself here, but my buddy, Dave had a Mac, an apple two or something like this way in the early days and I was on Commodore 64 and then I transited and followed the PC world. So, that's where you remember used to buy clones, IBM clones. They all ran Doss and any program that ran on dos could run on that computer.
Henry: Yeah. Like a compact or a Dell.
Mike: Totally. But from the very beginning, Apple has always been a closed ecosystem and so for years, and years and years you'll remember back in the days, right. For years and years, the only place you ever saw Macintosh computers was either in a school, but even not that often, mostly it was like graphic designers and artists and people like this. They used them to mix music and things like this. Right. Henry.
Henry: My first computer MCUs in 1986.
Mike: There you go. So, they've always been a closed ecosystem. So, apple is going, what are you talking about? I'm doing this. I'm always been a closed ecosystem. The challenge is that with the app store. This was when Apple started to go mobile, they started to open the ecosystem up cause there used to only be a few different kinds of software providers who made like games or different apps for the Mac computers. But when they went mobile in order to make this iTunes store as big and as grand as possible, they needed millions of developers. So, now they put the gate on this apple developer program and they control the hardware switches. So, we're programming an apple app and you have to get this apple developer certificate, you have to program it a certain way, you have to submit it to apple, they have to review the code, they can come back and tell you to change this or do that. If you want to get on the platform, they're basically gatekeeping at that level now.
Henry: The good part about that is as a user with an iPhone, I know that when I download an app, it is not going to be a virus, Haven has a certain level of enjoyment that apple deems worthy.
Mike: At least it's not the wild west. I mean, you could still have, you can still have apps that, I mean, you could argue Henry that, allowing Facebook for all these years to place a tracking pixel on everybody's iPhone so that it basically followed them around to every website they ever went to and transmitted all this data back to Facebook. That's something that probably shouldn't have been allowed by apple.
Henry: And this is what Apple wants to change.
Chris: Now I said that Facebook has three prominent apps. They make other apps, there is a reason why Facebook has a very real fear and that's because one year ago, Facebook used to have their own VPN that they released on the apple, app store and it was revealed that through a bunch of back doors, Facebook was violating Apple's privacy policy. They were using the VPN to spy on which websites, VPN users were surfing.
Henry: Is that. Right. I didn't know that.
Mike: Kind of like the anti-VPN big surprise.
Chris: So, apple discovered this, okay. There was a big hello blue and they removed the VPN from the apple app store. Wow. That's a very real fear they have. Now, a lot of people say, well, apple would never, remove Facebook or Instagram, or WhatsApp because they're too popular. Well, two things to that point, well, the parlor was also popular. Maybe not as popular as Facebook, they got removed and Adobe flash. Remember when millions of websites depended upon Adobe flash and Adobe flash was killed in one day after Steve Jobs sent out a think piece entitled thoughts about flash took one day apple killed it.
Mike: Well, I mean, so you can kind I hate, trust me. I hate trying to kind of come upon Zuckerberg's side. But on this, you could kind of see it. If I don't think Facebook's smart enough to take the high road, but the deal is that what the argument is? This is kind of partially reflected, I think a while ago we did one on Fortnite. Oh yeah. A fortnight had a similar kind of argument right now. Fortnite was has a wildly popular app. Now, in that case, it's not the majority of their people that are using it mobile, but they had a couple million, I think it was and these people who were using Fortnite, what Fortnite did is they tried to bypass apples, in pay. What is it in-app purchase system and allow people to go to fortnight's website, or somehow some link that went off of Apple's ecosystem, take a credit card payment for the sort of clue through, and then come back into the game and play it and they got spanked and got de-platformed for that? Because apples said you're not allowed to do that and whatever happened.
Henry: I think they're still fighting it.
Chris: I think they sicked a lawsuit on apple last year. Last I heard.
Mike: But I think they're still fighting it.
Chris: They're still fighting it and a fortnight's not a small fry here. The mobile client for epic is the company right. The epic that's right. Epic made billions of dollars through the iPhone app and that's gone now simply because, through the stroke of a pen, apple decide to de-platform them.
Henry: Okay. Well, getting back to this lawsuit from Facebook, thank you, Chris, for explaining to us what the actual issue is what happens next?
Mike: I'm sure lots of lawyers are going to get rich. Without a doubt, I would, I would actually really like to see this one fought out and actually these two guys take each other to the mat. I there's I'm concerned that what'll happen is what is often wanted to happen in these situations is at some point they'll make some compromise.
Chris: You know what? I don't think Facebook is going to win this one.
Mike: I sure as hell hope Facebook doesn't win this one.
Chris: I don't think they can win this one. I think this is a hail Mary path, what can you say either? If you go to the lawyer and if you go to the judge and say, hey, Apple is forcing us to disclose that we're tracking, and spying on users. How, do you offend that? I don't see how you can.
Henry: That's a good question.
Mike: Well, exactly and that, you're raising a very interesting point, Chris, because that argument, there is the exact argument that I mean, it seems years ago, but licked less than what, three weeks ago, app or sorry, Facebook used against parlor or against Donald Trump. They banned Donald Trump, for inciting, whatever the riots in Capitol hill, they banned his account. Twitter did the same and they alleged that it was to kind of prevent the violence that was going on. You violated our terms of service. Well, Apple's not saying you're violating our terms of service. They're just saying the terms of service have changed. So, they're saying, hey, I'm not telling you you're violating my terms of service magically waving my wand.
I'm telling you; I got no problem. They're not, Bann, they're not talking about banning Facebook and this is where I think Facebook's argument, Chris you're right. Falls apart because Tim Cook will stand in front of a bunch of lawyers and say, I'm not talking about banning Facebook at all. I'm not talking about banning Facebook. I am, and you nailed it or earlier Chris, a lifestyle company and so, because of that, I sell the platform to these users who, who expect me to treat them a certain way. I'm not telling my users; they cannot use Facebook. I'm telling my users, they can use Facebook, all they want. I'm just going to make sure that it's safer for them.
Henry: It's disclosed
Mike: By default, and if they want to go and click that button for some, I have a reason, I can't imagine clicking that button and saying, please share more of my information with Facebook. They can do that. It's this kind of this whole thing around the clicking, the I agree button having a 900-page legal agreement behind it that nobody ever reads. You click this button and unbeknownst to you've literally given them ownership and copyright and everything over all of the data that you publish on their platform, cause it's private. So, they have no problem saying I'm not banning free speech by banning Donald Trump. It's a private platform for him. I can do whatever I want. Well, that's exactly what Tim Cook's doing.
Henry: So, what you basically described there is what apple stance is likely going to be and that is all we're trying to do is give it a little bit more privacy to our users. If you want to offer an app, there should be some disclosure. Great. So, Mike and Chris, if you were in charge of the general concept or idea of Face's response, what would it be? Would you back down a bit, would you dig in your heels? What do you think?
Chris: If I was an evil corporation, Facebook. I would start work on a Facebook phone.
Henry: Yeah, interesting.
Chris: I would fork Android I'd basically give away these phones. To people, make the OS so that everything you do goes back to Facebook. Putting sensors all over the phone.
Henry: Freephone.
Chris: Exactly. Every single time you take a picture, send that data to Facebook. Every single time press icon that goes to Facebook. Fascinating. That's what I would do if I was Zuckerberg because let's be honest, as I said, they're in the data harvesting business and there's no better way to lock people into giving, away from your privacy than to give them free stuff.
Henry: Well, they have already been doing that since they began giving away a free app.
Mike: That's right. So, Mark, what you got to do is call your, your friends, in Taiwan, China, South Korea, get him making in an official branded Facebook phone, give it away. Problem solved.
Henry: Thank you, Chris. Mike, any ideas, how would you handle this? Or do you agree with Chris?
Mike: I mean, I basically, I don't even know if I could do better than that, but because I completely agree. I would actually say that I betcha they're already in design or they've already dusted them off, there are probably already prototypes, but what I would add. Because if I was a sociopath in charge of evil, tech company, manipulative tech company. The first thing I notice is what is the extent of my risk? So, I am now looking at losing half of my hundred billion or 200 billion in advertising dollar revenue. Which will translate to half of my stock value. So, I've got basically I've got an incentive to spend billions of dollars, Henry, on finding somebody else who will find a way to make Facebook, still able to collect the data.
Basically re-engineer that, the apple OS default switch. Because if you remember that the, we talked, we talked about earlier on in this conversation where the I iPhone that the terrorist suspect had that they couldn't unlock because it wasn't even a fingerprint. It was those 10, you had the number code, the pin number. If you entered it 10 times, it wiped the phone. Sure, and the FBI guys did 1, 2, 3, 4, 1, 2, 3, 4. Do you know what I mean? They got to eight and they went crap and what they, what they did is they went to apple, they said, apple, I need you to open this thing because this is the kind of shady stuff that Zuckerberg's thinking. I guarantee it, they said, apple, I need you to open this. Tim Cook said, Nope, I can't do that.
It's a phone that's owned by one of our users. We're not going to create a back door in our operating system to let you do that. So, what did the FBI do? They found a crazy hacker cyber security firm in Israel that cracked the apple encryption for them. So, if I'm Zuckerberg, I'll do Chris said because I think that's more I'll wave over here. We're making our phone; we're going to give it away for free. We're going to dump, blame loads of this stuff in Africa and in India and all these places. The poor people can have free say Facebook phone. They tried to do with the free internet. They're going to go here free. But on the back end, he's going to be looking for somebody, not himself, somebody else who can go in and say, I need you to build me a snippet of code that when Facebook gets loaded on an iPhone, it automatically disables or reenables the tracking. That's what I bet happens. Right. Interesting. That's where it goes.
Chris: It's Nefarious.
Henry: It's so sad that we have to think this way about a company. That's supposed to be uniting us.
Chris: Both of you are casting a little bit of dispersions on Facebook, but I guess they've earned it.
Henry: They have.
Mike: They deserve every single bit.
Chris: No. Henry I just want to say right. The reason why we're able to build a private decentralized social network. Is because we've thought about all these things
Henry: You're talking about peer social in many ones. Absolutely.
Chris: We've thought about worst-case scenarios. We realized, well, how do we prevent the worst-case scenario from happening? Well, we remove the middleman. We make it as solidly private as possible.
Mike: Well, it's almost the anti-Facebook
Chris: Exactly that there's no big centralized server middleman with someone watching and just choosing the data they want from the people they want.
Mike: That's exactly right, there's no higher in shady Uzbekistan, hacker company to break it open or to fix Facebook so that it violates the rules. It can't happen. So, sadly it's because we've been along, been around this so long that our minds go to these kinds of crazy theories. But at the end of the day, the way that you fix these things is very simple. You give power back to the people.
Henry: Absolutely and that's one of the things I'm so excited about because I have a pre-release of them, anyone, and, it's almost ready to get out there to the folks who go to do some initial testing. So, video guys, thank you so much and for clarifying this well, this is going to be a big battle. That is going to be very fun to watch clash of the Titans.
Mike: I love watching lawyers make money.
Henry: Stop it. I like watching paints. Dry
Chris: You guys.
Henry: Thank you, Mike. Chris, thank you so much for the creative solution there. Yikes. Thank you, guys. I really appreciate it.
Mike: Thank you, Henry.