Facebook will stop requiring iPhone app makers to provide the company with their users’ personal data for advertising as it prepares for a new privacy crackdown by Apple that could cut its revenue by billions of dollars.
In a little-announced update last week, the social media giant told app developers that they can now allow users to log in via their Facebook accounts without that information being used to target them with promotions.
Facebook, which will post fourth-quarter results of a 25% increase in sales and record usage this week, has long used its login system, integrated into thousands of other apps, to collect data on people’s smartphone habits. , allowing him to keep track of them. the same users on multiple services and launch ads to users of specific apps.
Yet these practices are threatened by an upcoming iPhone update that will force apps to show their users an aggressive consent popup before sharing their data with advertising companies, including Facebook.
Experts believe up to 90% of users will reject pop-ups, disrupting the free app economy and crippling Facebook’s mobile ad machine, which accounted for the vast majority of its revenue when the data was last released. in 2019. Mobile market analyst Eric Seufert estimates the changes could wipe out Facebook’s quarterly revenue by up to 14%.
David Barnard, developer contributor at app subscription firm RevenueCat, said Facebook had no choice but to change its policy to avoid breaking thousands of apps overnight when users whose accounts are connected to Facebook give up. to monitoring.
Mr. Barnard said: “The next few months are going to be crazy … This is a perfect example of how deeply this policy impacts millions of lines of code already written and in production on thousands of apps.”
Facebook’s software development tools have been widely adopted by app developers. Its login system helps them recruit new users more easily by giving them access to Facebook’s powerful advertising tools.
App makers can “retarget” their inactive or infrequent users with Facebook and Instagram ads or use app logins to measure the success of their promotional campaigns. In return, Facebook can use the same data to sell ads to other companies.
A Facebook spokesperson said the company will still collect data, but will flag it as not being used in advertising.
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