Facebook's Clegg Fires Back at Apple's Cook
25 June 2019 - 8:38AM
Dow Jones News
By Sara Germano
BERLIN -- A senior Facebook Inc. executive took a veiled shot at
Apple Inc., continuing the sniping between the tech giants as their
business models are under increasing scrutiny from global
regulators.
In a speech Monday at the Hertie School of Governance in the
German capital, Facebook vice president of global affairs and
communications Nick Clegg criticized other large tech companies for
selling expensive hardware and catering to what he called an
"exclusive club" of wealthy consumers.
Mr. Clegg, the former U.K. deputy prime minister, argued that
criticisms about tailored advertising on the social network fail to
underscore that the product remains free for users, unlike products
offered by Silicon Valley rivals.
"Some other big tech companies make their money by selling
expensive hardware or subscription services, or in some cases both,
to consumers in developed, wealthier economies," Mr. Clegg said.
"They are an exclusive club, available only to aspirant consumers
with the means to buy high-value hardware and services."
By contrast, he said, "Facebook was founded on a simple
principle: We want to connect the world. And you don't do that by
charging for admission."
Mr. Clegg didn't mention Apple or other hardware companies by
name. A spokesman for Facebook declined to offer further context
for Mr. Clegg's remarks.
The comments come about a week after Apple Chief Executive Tim
Cook gave a speech that was viewed as critical of Facebook.
"It feels a bit crazy that anyone should have to say this. But
if you've built a chaos factory, you can't dodge responsibility for
the chaos. Taking responsibility means having the courage to think
things through," Mr. Cook said in a commencement address at
Stanford University.
He said privacy should be a fundamental concern of the tech
industry, implicitly drawing a distinction between ad-supported
business models like Facebook's versus Apple's, which is dependent
on hardware sales and subscription services.
"If we accept as normal and unavoidable that everything in our
lives can be aggregated, sold, or even leaked in the event of a
hack, then we lose so much more than data. We lose the freedom to
be human," Mr. Cook said.
The sparring between the two companies comes as regulators are
stepping up calls to protect consumers' data privacy from large
tech companies including Facebook, which have built their
businesses upon a model of offering free services to consumers and
collecting reams of user data to sell to advertisers. In the U.S.,
the Justice Department and the Federal Trade Commission have taken
steps in recent weeks that suggest increased oversight of
anticompetitive practices by large tech companies.
Meanwhile, Alphabet Inc.'s Google has faced repeated fines by
the European Union for its business practices, and in February,
German regulators ordered Facebook to stop collecting information
about users from third-party sites without users' consent.
Hardware-focused tech giants have sought to position themselves
as privacy crusaders, with Apple recently launching a $54 million
ad campaign to tout the security of iPhones.
In his speech on Monday, Facebook's Mr. Clegg began his remarks
by saying that the company welcomes regulation, acknowledging that
the "euphoria stage" of enjoying Silicon Valley innovations has now
given way to an era of suspicion about tech, and along with it
higher scrutiny.
"The internet does need competition and it does need regulation.
That's why we want to work with governments and policy makers to
design the sort of smart regulation that fosters competition,
encourages innovation and protects consumers," he said.
Write to Sara Germano at sara.germano@wsj.com
(END) Dow Jones Newswires
June 24, 2019 18:23 ET (22:23 GMT)
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