Inside Apple’s Decision to Blow Up the Digital Ads Business
The iPhone maker’s privacy crackdown on mobile apps was years in the making. First though, Apple had to come to terms with a monster of its own creation, and its top brass had to debate how far to go in cutting off the data collection that undergirds the ads business.
For years, Apple CEO Tim Cook has been the most vocal privacy champion among all of big tech’s top leaders. But within Apple, a decision to curtail ad tracking of iPhone users in 2020 sparked an intense debate about just how far to push privacy changes poised to upend the digital advertising industry.
On one side of the discussions was Craig Federighi, Apple’s software chief. He oversaw a team of privacy-minded engineers who wanted to curtail the powers of an Apple tool that unscrupulous advertising companies, mobile developers and data brokers were exploiting to track the behavior of iPhone users, according to people with direct knowledge of the discussions. On the other side were groups reporting to Eddy Cue, head of Apple’s services and advertising businesses, and Philip Schiller, then the company’s top marketing executive, who led its App Store. Cue's and Schiller's teams argued for more-cautious action against the tool, given that many developers relied on it for advertising revenue. Schiller's group also worried about potential damage to App Store revenues, though Schiller himself was in agreement with Federighi and his team, the people said.
In the end, the Apple leaders reached a solution. The company required app developers to ask users whether they wanted to allow their online activities to be tracked across websites and apps operated by companies other than the developer. Developers couldn’t use the tool anymore to track users who opted out but instead had to rely on an inferior system developed by Apple that better protected user privacy. For many companies in digital advertising, the impact of Apple’s changes—which the company began to enforce last April—has been seismic. That’s especially true for Facebook’s parent company, Meta Platforms, which expects the changes to shave $10 billion off its revenues this year because of their impact on the company’s prodigious data collection practices.