Facebook shuts controversial program to pay Apple users for data

Giles Turner and Mark Gurman, Bloomberg News

The Facebook Inc. application is displayed for a photograph on an Apple Inc. iPhone in Washington, D.C., U.S., on Wednesday, March 21, 2018. , Bloomberg

Apple Inc. (AAPL.O) said on Wednesday that it was revoking key app development credentials for Facebook Inc. (FB.O), a move that could make it more difficult for the social network to develop and test new versions of its apps on the iPad and iPhone, as well as blocking internal tools Facebook employees use every day.

The iPhone maker’s decision follows news that Facebook circumvented Apple’s App Store distribution rules by paying iPhone users, including teenagers, to share personal data. Facebook shut down the program after TechCrunch reported the news, even as it defended the effort saying users opted in and that the teens had parental consent.

Apple’s decision demonstrates both its power over the industry and a penchant for privacy. It’s also a headache for Facebook. The move doesn’t impact distribution for consumers via the App Store, but it could mean delays to new versions of Facebook apps including its main app, WhatsApp, and Instagram. It could also affect internal apps that are used to run the company -- potentially shutting down anything from email to office communications and ordering food from the cafeteria.

Facebook paid people ages 13 to 35 as much as US$20 a month to install the Facebook Research App to track phone and web usage habits, according to the TechCrunch story. The app will be discontinued on Apple’s iOS, though it will continue to run on Android devices.

Facebook confirmed the existence of the program but took issue with its representation.

“Key facts about this market research program are being ignored,” a Facebook spokesman said in a statement. “Despite early reports, there was nothing ‘secret’ about this; it was literally called the Facebook Research App. It wasn’t ‘spying’ as all of the people who signed up to participate went through a clear on-boarding process asking for their permission and were paid to participate. Finally, less than 5 per cent of the people who chose to participate in this market research program were teens. All of them with signed parental consent forms.”

In revoking Facebook’s developer certificate for iOS, Apple said the permission was intended “solely for the internal distribution of apps within an organization. Facebook has been using their membership to distribute a data-collecting app to consumers, which is a clear breach of their agreement with Apple.”

Facebook has been under fire for months over its privacy practices and role in the 2016 U.S. presidential election. In one major data breach disclosed last year, Cambridge Analytica obtained information on millions of Facebook users through a third-party app.

The U.S. Federal Trade Commission, the nation’s chief privacy watchdog, is likely to impose a record fine against the company for failing to protect users’ personal information, Bloomberg News reported this month. The District of Columbia sued the company in December over its handling of user data.

Apple has long sought to distinguish itself from the rest of the tech pack in its approach to privacy, and Chief Executive Officer Tim Cook has particularly taken a harsh view of Facebook. Last March he criticized Facebook CEO Mark Zuckerberg for his handling of Cambridge Analytica, saying that he “ wouldn’t be in that situation” if he were running the company. Zuckerberg shot back soon after, calling Cook’s criticism “extremely glib,” and suggested that Apple’s products and services cater to the rich.