Apple

Meta is desperately fighting against Apple’s privacy changes

Meta (META) is having a rough year. The company’s stock price has fallen 57% since the start of the year, torpedoing CEO Mark Zuckerberg’s personal fortune to $72 billion, according to the Bloomberg Billionaires Index.

As the macroeconomic climate batters the entire tech industry, Meta and other tech companies that rely on ad-based revenue are facing a unique headwind — Apple’s ( AAPL ) massive privacy shakeup called App Tracking Transparency.

The feature, which lets users decide whether they want apps to track them around the web, is expected to shave $10 billion off Meta’s revenue this year, the company said in February. The company is now accused of trying to circumvent the feature and violating state and federal data collection laws in a proposed class action lawsuit in California.

Apple’s privacy changes dealt a crushing blow to Meta’s bottom line, but that’s not the company’s only problem. TikTok’s growth has the social media giant scrambling to reinvent Instagram to appeal to Gen Z. Facebook’s main app, meanwhile, has completely lost its edge with younger people.

These issues have created a swirling maelstrom of horror that Meta is trying to escape from. And he hopes that his bet on the metaverse will be his savior.

How Meta allegedly collects data about the sites you visit

Apple App Tracking Transparency is a setting that asks if you want to allow an app to track your movements on the web and other apps. Apps and websites do this all the time. I was looking for vintage game consoles on eBay (EBAY) and ads for old Nintendo (NTDOY) and PlayStation (SONY) started popping up on various sites I visited.

The idea is that by tracking users across the web, companies like Meta can build better profiles of user groups and use them to help advertisers target their ads more precisely to people who hope to buy their products .

AUSTIN, TX - MARCH 15: Mark Zuckerberg, via video, speaks at Into the Metaverse: Creators, Commerce and Connection during the SXSW 2022 Conference and Festivals at the Austin Convention Center on March 15, 2022 in Austin, Texas.  (Photo by Samantha Burkard/Getty Images for SXSW)

Mark Zuckerberg speaks at Into the Metaverse: Creators, Commerce and Connection during the SXSW 2022 Conference and Festivals at the Austin Convention Center on March 15, 2022 in Austin, Texas. (Photo by Samantha Burkard/Getty Images for SXSW)

However, opting out of tracking cuts off that access for apps, making it harder for advertisers to reach specific customers. As a result, these advertisers may focus their campaigns elsewhere. Meta isn’t the only company that has suffered from Apple’s privacy actions. Snap also cited it as a partial reason for some of the company’s struggles with declining advertising revenue.

According to the lawsuit, filed on behalf of Facebook users and citing research by Felix Krause, Meta circumvents users’ wishes not to be tracked by collecting data from websites they visit using their apps’ built-in browsers.

For example, say you click a link to go to a news site’s Instagram page and click the link in their bio to read an article. After you select a story to read, it opens in Instagram’s built-in browser. Krause and the lawsuit allege that this is when Meta injects its own code into sites and is able to collect data about what you’ve viewed.

Meta denied any wrongdoing in a statement to Yahoo Finance, saying: “These allegations are baseless and we will defend ourselves vigorously. We’ve carefully designed our in-app browser to respect users’ privacy choices, including how data can be used for ads.

Meta throws everything at the wall

But Zuckerberg and company aren’t just worried about Apple’s privacy changes. The company also faces its biggest competition in years with the rise of TikTok. Meta was so obsessed with meeting the challenge that TikTok set out to do so, redesigning Instagram to be more like a short-form video app.

The changes haven’t quite won over users. The test version of the app was slammed by users including Kim Kardashian, so much so that Instagram boss Adam Mosseri released a public statement saying the company would not be releasing this version of the software live. However, he explained that Instagram will continue its push into short-form videos.

The meta has plenty of reasons to worry about the competition. The company is losing its edge when it comes to its appeal among teenagers, according to surveys by Piper Sandler and the Pew Research Center.

The company is changing not only on Instagram. In July, Meta announced major changes to the main Facebook app, adding Home and Feeds tabs. Home is designed to mimic the kind of discovery engine that powers TikTok, providing a means for users to find new accounts to follow, while Feeds is where they’ll find posts from friends and family.

Of course, there’s also Meta’s big push into the metaverse, which she unveiled last October alongside her rebrand. However, the effort is draining money from Metta’s coffers and is expected to continue to do so for years to come.

Investors also don’t seem interested in Facebook’s metaverse efforts. Just look at its share price trajectory over the past year and you can see that the crash began the same day the company announced that Apple’s changes were becoming a multi-billion dollar problem.

And unfortunately for the Meta, it doesn’t look like that’s going to change anytime soon.

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Any advice? Email Daniel Howley at [email protected] Follow him on Twitter at @DanielHowley.

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