The Wall Street Journal: “The Secret Talks that could have prevented the Apple vs. Facebook War”

In the years before the change, Apple suggested a series of possible arrangements that would earn the iPhone maker a slice of Facebook’s revenue, according to people who either participated in the meetings or were briefed about them. As one person recalled: Apple officials said they wanted to “build businesses together”.

One idea that was discussed: creating a subscription-based version of Facebook that would be free of ads, according to people familiar with the discussions. Because Apple collects a cut of subscription revenue for apps in its App Store, that product could have generated significant revenue for the Cupertino, Calif., giant.

The companies also haggled over whether Apple was entitled to a piece of Facebook’s sales from so-called boosted posts, said people familiar with the matter. A boost allows a user to pay to increase the number of people that see a post on Facebook or Instagram. Facebook, which considers boosts ads, has always contended that boosts are a form of advertising, in part because they are often used by small businesses to reach a bigger audience, said one of the people.

Apple, which doesn’t take a cut of advertising from developers, argued that Facebook boosts should be considered in-app purchases, according to a person familiar with the matter. Apple’s standard terms would entitle it to take a 30% share of those sales.

Salvador Rodriguez

Additional confirmation for something many people have been saying for a while: Apple’s supposedly privacy-focused changes to tracking on iOS are primarily a means to disadvantage competitors and grow its own ad business. While these secret negotiations with Facebook were not previously reported, pressuring other businesses, large and small, for a cut of their iOS revenues has become common practice for Apple – unless they sign a hefty licensing deal, as is the case with their Google search agreement.

Google pays Apple billions of dollars annually to be the default search engine in the Safari web browser. David Paul Morris/Bloomberg News

Not that Facebook is some innocent party here; according to the article above, Mark Zuckerberg chose to delay significant changes to its data practices to keep its advertising business humming. But somehow Apple manages to be just as greedy as Facebook, while being arrogant and hypocritical at the same time.