Snap faces legal action against investors after Apple’s privacy update on ad revenue – .

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Snap faces legal action against investors after Apple’s privacy update on ad revenue – .


Image de l'article intitulé Snap Faces Investor Lawsuit After Apple's Privacy Updates Tank

photo: Denis charlet (Getty Images)

Snap is facing a lawsuit from one of its shareholders for allegedly exaggerating how well it could adapt to the privacy updates Apple rolled out earlier this year, Reuters reports.

In a class action lawsuit filed in Federal Court this week, Snap investor Kellie Black accused the social media company of downplaying how much Apple’s new privacy policy would reduce ad revenue. Since its debut in April, Apple Transparency of application monitoring The feature, which allows iOS users to grant or deny apps permission to track their activity, has pissed off more than a few social media companies whose business models rely on this type of tracking for targeted advertising.

According to an estimation, the iOS feature cost Snap, Facebook, Twitter and YouTube up to $ 9.85 billion in lost revenue in the second half of 2021.

Snap, whose profits come largely from selling digital ads on its popular photo and video app, has been among the hardest hit. Company actions tumbled by around 25% last month following an unimpressive third-quarter earnings report, which he attributed in part to fallout from Apple’s privacy updates.

The lawsuit, which was filed in the U.S. District Court for the Central District of California, accuses Snap of violating federal securities laws. As quoted in the file, Snap’s commercial director Jeremi Gorman expressed confidence in investors back in february on adapting Snap’s business model to Apple’s upcoming policy change.

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“Overall, we feel really well prepared for these changes”, sit during a call for earnings, although she also warned that “changes in this ecosystem are generally disruptive and the outcome is uncertain.”

In another earnings call in July, Gorman showcased several new privacy-focused features for advertisers that Snap released in preparation for Apple’s privacy update, such as Advanced Conversions, which uses the cryptographic technology to measure conversion data without identifying individual users.

Black, the investor behind the lawsuit, claims that Gorman made several “materially false and / or misleading” statements during this call to paint a clearer picture of the effects of Apple’s new policy when in reality the damage was already beginning to manifest. The lawsuit argues that “Snap overestimated its ability to scale its advertising with Apple’s privacy changes” and “was aware of, but downplayed, the risks of the impact of Apple’s privacy changes on business. advertising company ”.

According to the filing, Snap shareholders “suffered significant loss and damage” as a result of falling stock prices as well as Snap’s “reprehensible acts and omissions”. Black is seeking to “recover compensable damages” caused by Snap’s alleged violation of federal securities laws, although the record does not name a specific dollar amount.

Apple’s privacy updates have also dealt a blow to other businesses that depend on online advertising for profit. Meta-owned Facebook vice president of product marketing Graham Mudd said in September that the company “expected platform changes, including recent iOS updates, to have a bigger impact in the third quarter compared to the second quarter.” Previously, Facebook had engaged in a full-fledged public relations campaign against Apple throughout 2020 and early this year in an attempt to convince users that having more control over their data is actually a bad thing.

Correction: A previous version of this article made a bad kind of Jeremi Gorman. We regret the error.

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