What’s Up With Apple: Justice Dept. Investigation, Facebook Revenue, and More

By Paul Ausick Published Oct 26, 7:41AM EDT

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What’s Up With Apple: Justice Dept. Investigation, Facebook Revenue, and More — © alexsl / Getty Images

When social media behemoth Facebook reported third-quarter results Monday afternoon, revenue growth was slower than analysts expected and Facebook even lowered its revenue outlook for the fourth quarter. Facebook blamed Apple Inc. (NASDAQ: AAPL | AAPL Price Prediction) and its App Tracking Transparency (ATT) feature for the slowdown. Snap said the same thing last week.

Wary investors cost Facebook stock 5% following Snap’s report and subsequent 20% share-price drop. Facebook missed the consensus revenue estimate by more than $500 million (about 1.8% below the projection) and the stock rose by 3%. Chief Operating Officer Sheryl Sandberg said that Facebook and its advertisers “will continue to feel the effect of [ATT] in future quarters.” Facebook applied a balm by announcing a $50 billion share buyback program.

Tuesday morning, after CEO Mark Zuckerberg defended Facebook’s actions to stop the flow of misinformation and hate speech (“I’m proud of our record navigating the complex trade-offs involved in operating services at a global scale.”), the Associated Press (AP) published a report that Apple threatened in 2019 to pull Facebook and Instagram from the App Store because Apple was concerned that “the platform [was] being used as a tool to trade and sell maids in the Mideast.” The AP’s story was based on documents disclosed to the U.S. Securities and Exchange Commission and given to Congress by Facebook whistle-blower Frances Haugen’s attorney.

According to the AP, in the disclosed documents, “Facebook acknowledged … that it was ‘under-enforcing on confirmed abusive activity’ that saw Filipina maids complaining on the social media site of being abused. Apple relented and Facebook and Instagram remained in the app store.”
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A U.S. Department of Justice antitrust investigation into Apple’s control over the iPhone ecosystem is speeding up. According to a report at The Information, the Justice Department has subpoenaed the company’s business partners and assigned more people to the investigation. The ruling in Epic Games’ suit against Apple is unlikely to stall the Justice Department’s investigation, according to a report in MacRumors, and the probe eventually may result in no complaint.

Briefly Noted:

On Monday, Apple released its latest Mac operating system, macOS Monterey, which the company said, “delivers groundbreaking new features that help users connect in new ways, accomplish more, and work seamlessly across their Apple devices.”

Apple also released watchOS 8.1 to developers, according to a report at 9to5Mac. The release is an update to watchOS 8, released last month when Apple announced its new Watch Series 7. Among the changes is one to allow watch owners to retrieve their COVID-19 vaccination verification from Apple Wallet.
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About the Author Paul Ausick →

Paul Ausick has been writing for a673b.bigscoots-temp.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.

He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.