Apple and Facebook are currently not on the best of terms after new privacy features released by the former are set to cost the social network billions of dollars. But that was not always the case and according to a Wall Street Journal report, the two were in close discussions to become business partners.
According to the report, Apple had suggested arrangements that would have given the Cupertino-based tech giant a share of the social media conglomerate’s revenue. The publication quotes Apple officials as wanting to “build business together.”
One of the ideas discussed by the companies was to create an ad-free subscription-based version of Facebook. And since Apple collects a fee from the subscription revenue of apps in the App store, a subscription-based version of Facebook would have helped the iPhone make generate significant revenues.
WSJ reports that one point of contention between the companies was boosted posts. When a post is boosted on Facebook and Instagram, it increases the number of people that see the post. Facebook always contended that boosts are a form of advertising. But Apple doesn’t take a cut from advertising revenue and argued that boosting posts should be considered as an in-app purchase, which would entitle the company to 30 per cent of those sales.
These discussions between the companies weren’t reported previously but they give insights into how the two companies evolved into rivals. Currently, Facebook and Apple are ideologically opposed opponents. Apple has opened up conversations about privacy with its introduction of App Tracking Transparency in iOS 14.5.
The company also promotes itself as a champion of consumer privacy in its marketing material while Facebook’s primary source of revenue continues to be ads targeted based on user information. It is forecast that Facebook will lose over $10 billion in advertising revenue due to the new features introduced by Apple.