Apple Offered Facebook Revenue Sharing Agreement

A new privacy feature in Apple’s iOS 14.5 requires apps to request permission to track you, which led to Facebook losing billions in dollars of ads revenue. Apple tried to reach a compromise with the company to share revenue.

Last year, Apple rolled out iOS 14.5, a version of its mobile operating system that made it easier than ever for iPhone and iPad users to opt out of letting apps like Facebook track their activity on their devices.

According to WSJ, in the years before the change, Apple suggested Facebook different versions of the revenue sharing agreement. As one person recalled: Apple officials said they wanted to “build businesses together.”

One of the ideas was to create a subscription-based version of Facebook that would be free of ads, which would allow Apple to collect a cut of subscription revenue. The tech giants didn’t reach agreements on any of the proposals to work more closely together.

After a new iOS version was rolled out, only 37 percent of U.S. iPhone and iPad users have opted into allowing companies to track them on their devices, according to research firm Insider Intelligence. The ramifications of Apple’s changes to its mobile operating system have been felt broadly across the digital advertising ecosystem. Among U.S. and U.K. mobile advertisers, 59% have shifted advertising budgets from iOS to Android, according to a June survey by Tenjin and Growth FullStack, which develop tools used by mobile advertisers.

The privacy policy changes resulted in $17.8 billion in lost revenue among Facebook, Twitter, Snap and YouTube so far in 2022, according to an estimate by Lotame, a data-management company.

For Facebook, the changes have been particularly harmful. Apple’s moves were the primary cause of a sharp business slump that has shaved approximately $600 billion from the company’s market value in less than a year.