Apple, Meta once planned to build businesses together: Report

Apple and Meta (formerly Facebook), at the loggerheads over privacy changes in iOS and App Store, once planned to "build businesses together" where Apple was in discussions with Mark Zuckerberg-run social network about how it could make more money from its ad revenue.

According to a report in The Wall Street Journal, Apple and Facebook discussed "revenue-sharing arrangements, including a potential ad-free, subscription version of Facebook".

They discussed creating a subscription-based version of Facebook that would be free of ads.

Apple also reportedly argued that it deserved a cut of certain portions of Facebook's ad revenue from so-called "boosted posts".

A boost allows a user to pay to increase the number of people that see a post on Facebook or Instagram.

"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," the report said late on Friday.

The tech giants could not reach an agreement on discussions that took place "mostly" between 2016 and 2018.

Facebook is struggling to patch its ad-tracking systems after Apple brought tough privacy changes in its App Store.

Apple introduced the "Ask App not to Track" prompt as part of iOS 14.5 in 2021 which has had a significant impact on various companies, including Meta which said that Apple iOS privacy changes will cost it a whopping $10 billion in 2022.

"We believe the impact of iOS overall as a headwind on our business in 2022 is on the order of $10 billion, so it's a pretty significant headwind for our business," Meta CFO David Wehner said earlier this year.

Apple's iOS 14.5 update, released in April 2021, came with an App Tracking Transparency (ATT) feature that has affected digital advertising for tech giants.

According to the WSJ report, Apple's privacy move resulted in a "sharp business slump that has shaved approximately $600 billion from the company's (Meta's) market value in less than a year".

A Meta spokesman said that the company has "made significant changes over the past five years to protect people's data while also allowing businesses of all sizes to grow".