Big Tech TOS and Facebook’s Plunge

Facebook’s stock plunged 26% on forecasts of weaker than expected revenue for the next quarter.  One big reason?  Apple’s changes to protect user privacy (Thank you, Apple) which require that users opt-in to Facebook tracking.  Facebook claims that Apple’s iPhone privacy changes will result in a $10billion revenue hit.  For years, some academics and marketing advocates have claimed that users really like tracking or at least, don’t really mind it- if they didn’t, they asked, why would they line up to buy iPhones?  That was not the soundest logic given the reams of research regarding consumer psychology and human cognitive limitations.  Others, including myself, contended that consumers didn’t like tracking and data collection, but didn’t have much of a choice or weren’t really focused on the issue.  Well, I think the numbers don’t lie here – people, when given the choice, really don’t want to be tracked, and Facebook’s bottom line is feeling it.

The tracking issue is inextricably tied to the TOS problem.  Companies justify practices like data collection and tracking by claiming that consumers “consented” to the practices in their terms of service.  But consumers don’t agree to the terms because they don’t mind the practice (despite what some might say) – they do it because they don’t have a real alternative.  A while back, I spoke with Justin Kirkland, a reporter from Esquire magazine, who captured the issues related to Facebook’s (and other Big Tech companies) terms of service in this amusing article.

* yes, I know that Facebook changed its name to Meta, but everyone knows they’re still Facebook.