Why Facebook So Rattled By Apple's Privacy Changes? Former Employees Explain

Former Facebook Inc FB staffers have made revelations on how the social network giant will be impacted by the privacy changes Apple Inc AAPL to its smartphone operating system, CNBC reported Thursday.

What Happened: A metric known as view-through conversations is at stake for the Mark Zuckerberg-led company. This metric allows Facebook to measure how effective ads placed on its platform are, even if the user does not click on the advertisement, according to CNBC.

The policy changes will also impact Facebook’s Audience Network, which places advertisements in non-Facebook apps.

Facebook is campaigning against the proposed changes to Apple’s iOS by taking the stand that it is against small businesses. A former employee attributed that to building goodwill with a portion of the general public, according to CNBC.

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The former employees that CNBC talked with are mixed on whether Apple’s changes will impact small businesses. 

“If you talked to any restaurant owner anywhere and asked them what IDFA [identifier for advertisers] is, I don’t think any of them would know what that is,” said Henry Love, a former employee at the social media giant.

However, “sophisticated” venture capital-backed businesses may feel the effect, according to Love.

Why It Matters: In August, Facebook said having to stop collecting IDFA on its apps in iOS14 will hurt its business. The company said the move might erode 50% of its Audience Network revenue.

See Also: Mark Zuckerberg Told Facebook Staff In 2018 To 'Inflict Pain' On Apple: Report

If Facebook’s advertisers cannot gauge the impact of their advertisements on its namesake platform and Instagram, they may take their advertising dollars elsewhere, noted CNBC.

Facebook is the second-largest recipient of advertisement revenues after Alphabet Inc GOOGL GOOG subsidiary Google, which has an advantage due to its search ad business.

The Apple-Facebook spat has gone public with the social network company taking out full-page advertisements in December, claiming it was “standing up to Apple for small businesses everywhere.”

Apple in turn retorted that it was “standing up for" its users.

Price Action: Facebook shares closed almost 3.4% higher at $273.88 on Thursday and gained 0.28% in the after-hours session. On the same day, Apple shares closed 1.65% higher at $121.96 and rose 0.24% in the after-hours session. 

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