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HomeUncategorizedApple and Meta discussed 'revenue-sharing' approach, report says

Apple and Meta discussed 'revenue-sharing' approach, report says

The big picture: The relationship between Apple and Meta has gotten particularly bad over the past few years, mostly due to the anti-tracking policy on Apple devices. However, according to a new report, the two companies had tried to find a compromise. Still, the differences between their sources of income continue to cause problems between the two.

The Wall Street Journal reports that the companies came up with the idea of ​​Meta (then called Facebook) in the years before Apple’s tracking restrictions hurt Meta’s business, in order to share a portion of its revenue with the company Apple. Apple’s App Store would have been the primary conduit for the agreement.

Even before Apple started letting iPhone users opt out of being tracked by advertisers — which angered Facebook — there was tension between the two companies. Some Apple executives are annoyed that Meta’s apps, such as Facebook and Instagram, are the most popular on the App Store without generating any revenue for Apple.

Between 2016 and 2018, Facebook and Apple discussed the many ways Apple could make money from the social media platform. One is a subscription-based, ad-free version of Facebook. Facebook will let subscription payments go through the App Store’s payment processor, giving Apple 30 percent of subscription revenue from users on its platform.

Other One idea involves boosted posts, or Facebook posts that get more visibility when a user or business pays. Facebook could have offered sponsorships in the form of in-app purchases on the Facebook app, reducing Apple’s sales. Ultimately, the proposals didn’t pan out as the spat between the two companies intensified.

When Apple announced an opt-out of ad tracking in iOS 14.5 in late 2020, Facebook responded by attacking ads. After the update rolled out in April 2021, most iPhone users asked not to be tracked, which hit Meta’s ad revenue.

Sources told the Wall Street Journal that the social media company is considering shutting down pre-update app tracking to reduce its reliance on iOS and Android. Meta decided against it for fear of loss of revenue, which would happen no matter what.

Opting out of in-app tracking does not fully protect iPhone users from Meta’s ad tracking. This week, a researcher found that Facebook and Instagram’s in-app browsers insert tracking codes into every website they visit. Meta claims this feature exists only to save payment information to make purchases easier through these apps.

The rift between Meta and Apple may not go away anytime soon, as their business models are completely different. Facebook and Instagram make their money mainly through advertising, while Apple’s main revenue is Sources come from selling hardware and software. Locking down ad tracking makes Apple’s products more appealing, but directly conflicts with Meta’s.

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