On Thursday, Snap, Pinterest and Unity Software said they anticipate some issues or headwinds as a result of Apple‘s upcoming changes to its privacy settings, apparently backing up Facebook’s argument that the changes will affect app makers. All three tech companies mentioned in their earnings calls with analysts that they expect some impact on their future financial results due to changes that Apple Inc. AAPL, + 2.58% will make to privacy settings in the next version of its mobile operating system , iOS. 14.
Last week, Apple CEO Tim Cook spoke at a conference on data privacy and said changes to the so-called Identifier of Advertisers (IDFA) will be available in the next beta version of the software. That will give users the option of not sharing their data or tracking, which will make it more difficult for software developers to track users in their applications. Facebook Inc., FB, -0.06% has been denouncing the proposed measure since it was first announced last summer, but has recently increased its rhetoric. Last week, The Information reported that Facebook was preparing a lawsuit, which it has yet to file, alleging that the iPhone maker was abusing its power in the smartphone market by forcing developers to follow the rules of the App Store. that Apple itself does not have to follow. Apple’s proposed moves are creating dark clouds over other app companies, but some hate to criticize the tech giant. On Thursday, Snapchat developer Snap Inc. SNAP, -1.60%, after warning of possible uncertainty related to Apple’s plans, said it agreed with the changes. “The reality is that we admire Apple and believe that they are trying to do the right thing for their customers,” said Snap CEO Evan Spiegel. PINS from Pinterest Inc., + 0.91% would only say the issue was going to create “headwinds.” “Voluntary user participation rates will affect the extent of the headwinds we see in the industry. And we’re looking out for that, ”said Pinterest CFO Todd Morgenfeld. Unity Software Inc. U, + 1.00% was much more specific about the anticipated impact. The game creation platform company said in a press release that it expects the IDFA changes to reduce its annual revenue by approximately $ 30 million in 2021. “IDFA [is] it’s going to require our clients to recalibrate much of what they are doing in relation to their acquisition or monetization and their marketing strategies, ”Unity CFO Kim Jabal told analysts on the company’s call. “And we have been working very closely with clients to help them do this.” Apple has said it is making these changes to its upcoming operating systems to protect consumers, apparently in an altruistic move. But you are also possibly trying to prevent regulators from intending to draft stricter privacy laws. Some analysts believe that Alphabet Inc.’s GOOGL, -0.25% GOOG, -0.37% Google could follow suit with its Android operating system. “These new Apple requirements are just one of many changes that platforms and regulators are seeking in the evolving advertising ecosystem that prioritizes privacy,” wrote Colin Sebastian, an analyst at Robert Baird, in a recent note. “Google could replicate many of these restrictions for Android, and cookies will be removed from browsers next year.” Sebastian believes that other losers in this IDFA battle will be mobile app developers like Snap, TikTok, LiveRamp, and mobile marketing companies. He also included Zynga ZNGA, + 0.29%, Shopify merchants, and other advertisers in his note. The more immediate question going forward is whether Facebook will actually comply with the filing of its lawsuit, which is believed to describe Apple’s behavior as anti-competitive. In today’s era, where the government is finally beginning to apply antitrust pressure on Big Tech, a lawsuit could force antitrust regulators to look at Apple, if they haven’t already.