Mark Zuckerberg Ramps Up Apple Attack as Facebook Weighs Antitrust Suit

(Bloomberg) -- Facebook Inc. Chief Executive Officer Mark Zuckerberg said he sees Apple Inc. as a “significant” future competitor as the two companies begin to build out rival business lines, and the social-media giant is considering filing an antitrust lawsuit against Apple for what it believes to be anti-competitive behavior.

Zuckerberg discussed Facebook's key product areas late Wednesday during a quarterly earnings call, and said he expects there to be “very significant competitive overlap” with the iPhone maker on several of them, including private messaging and augmented reality glasses. He criticized Apple's iMessage, suggesting it offered weaker privacy than Facebook's WhatsApp, and implied iMessage's market dominance in the U.S. was the result of unfair advantages provided by Apple.

“We increasingly see Apple as one of our biggest competitors,” Zuckerberg said. “Apple has every incentive to use their dominant platform position to interfere with how our apps and other apps work, which they regularly do to preference their own.”

Facebook is exploring the idea of filing an antitrust lawsuit against Apple, according to a person familiar with the social network, who asked not to be identified because a suit hasn't yet been filed. The possible lawsuit was reported earlier by The Information.

Both Facebook and Apple are already dealing with government antitrust concerns of their own. Facebook has been sued by the U.S. Federal Trade Commission and state regulators for alleged anti-competitive behavior, and the Department of Justice is investigating Apple over its control of the App Store.

Zuckerberg's company has stepped up its attacks on Apple in recent months, primarily over expected changes to Apple's iOS 14 mobile software, which will make it harder for the social network to track users and show them ads based on their past online activity. Apple has said it is making the move to protect user privacy, and Facebook has argued that the opt-in requirement will hurt small businesses that rely on targeted advertising for sales. Facebook told analysts Wednesday that the iOS changes could curb its revenue growth.

“Apple may say that they're doing this to help people, but the moves clearly track their competitive interests,” Zuckerberg said.

The threat to revenue growth from Apple's changes to iOS were part of a broader warning from Facebook about “significant uncertainty” for its business heading into 2021. The Menlo Park, California-based company said sales gains may slow in the second half as pandemic lockdowns -- and the accompanying growth in traffic and ad revenue -- ease.

Apple has said its new features will give users more transparency about how their data is used, in a way that still enables advertising. CEO Tim Cook on Thursday defended the company's changes to iOS in an appearance at the online Computers, Privacy & Data Protection Conference. He accused other companies of “data exploitation” and called for reform around the practices of selling user data to target ads.

“Technology does not need vast troves of personal data, stitched together across dozens of websites and apps, in order to succeed,” Cook said. “Advertising existed and thrived for decades without it. And we're here today because the path of least resistance is rarely the path of wisdom.”

Without naming specific businesses, Cook also criticized companies' algorithms for perpetuating the spread of disinformation and conspiracy theories for the sake of user engagement. He warned that such systems have the power to degrade the social fabric.

On Wednesday, Zuckerberg also said Facebook and Apple are likely to become direct rivals on the “next computing platform,” referring to virtual and augmented reality headsets. Facebook already offers VR headsets from its Oculus unit, and both companies are building AR glasses. “I think we would expect to see them as more of a competitor there as well,” he added.

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