Facebook's Clegg Fires Back at Apple's Cook

Date : 06/24/2019 @ 11:38PM
Source : Dow Jones News
Stock : Facebook, Inc. (FB)
Quote : 198.36  -2.42 (-1.21%) @ 5:00AM

Facebook's Clegg Fires Back at Apple's Cook

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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)

Copyright (c) 2019 Dow Jones & Company, Inc.

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