Apple, Facebook discussed revenue-sharing before privacy battles

Before Apple's privacy feud with Facebook, the two companies reportedly discussed "revenue-sharing agreements" such as an ad-free, subscription-based version of the social media platform.

The talks between Apple and Facebook reportedly occurred between 2016 and 2018, according to a new report from The Wall Street Journal. The report claims that Apple was in talks about various deals that would give it "a slice of Facebook's revenue."

According to one source, Apple approached Facebook and said it wanted to "build businesses together." One of those ideas included a subscription-based version of Facebook that was ad-free — and would allow Apple to collect a 15% to 30% cut of revenue.

Facebook, which eventually rebranded itself as Meta after a series of controversies, decided against a subscription model.

When approached by The Wall Street Journal, an Apple spokesperson said that the iPhone maker routinely meets with developers to "make suggestions, address concerns, and help them continue to grow their businesses."

Additionally, the spokesperson said that there wasn't any connection between partnership talks with Facebook and Apple's eventual release of privacy features like App Tracking Transparency (ATT).

ATT is a feature that allows users to control whether apps can track them across other apps and services. The feature has dealt a blow to Facebook's ad revenue, which led the social media juggernaut to launch an all-out campaign against Apple and ATT.

In total, Facebook says it will take up to a $10 billion revenue hit in 2022 because of ATT.

Although Apple has its own nascent-but-growing advertising business, the company has also denied that its privacy features were meant to boost its own first-party offerings.

13 Comments

tht 5654 comments · 23 Years

About 2 years ago

designr said:

Interesting. Very interesting.

If what happened was Apple proposed to Facebook to develop an iOS app that has an ad-free subscription tier, it's a nothing burger.

That's standard retail store or App Store practice. For a while, Apple was pushing everyone to develop a subscription tier. Apple proposed to Amazon that if they get someone to subscribe to Amazon Prime through the iOS app, Apple gets a cut of the subscription. Just replace Amazon Prime with Netflix, Spotify, Disney+, any service that has a subscription, Apple wants a cut if the customer subscribes through the iOS app. Some big fish went for it in the beginning, but they gradually just got people to subscribe through their own websites or other vehicles, like ATT and HBO Max.

Facebook with a paid ad-free tier? That idea did make the rounds a while back. Facebook didn't test the waters.

ericthehalfbee 4489 comments · 13 Years

About 2 years ago

What a joke of a hit piece by the WSJ.

Companies are always discussing different scenarios. The only thing that counts in the end is what the company did, not the dozen or more scenarios they talked about.

ihatescreennames 1977 comments · 19 Years

About 2 years ago

AppleInsider said:

In total, Facebook says it will take up to a $10 billion revenue hit in 2022 because of ATT.

Is it really because of ATT, though?

https://pxlnv.com/blog/ad-tech-revenue-statements-app-tracking-transparency/

It seems pretty reasonable there are other factors at play in FB’s revenue hit. FB blaming ATT just helps them frame Apple as the bad guy to add a little more negative press.