Snap faces an investor lawsuit after Apple’s privacy updates Tank Advertising Revenue

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Snap is facing a lawsuit from one of its shareholders for allegedly exaggerating how much it could accommodate the privacy updates that Apple introduced earlier this year, Reuters reports.

In a class action lawsuit filed in federal court this week,, Snap investor Kellie Black has accused social media company of downplaying Apple’s new privacy policy advertising revenue. Since Apple’s debut in April Transparency of application tracking The feature, which allows iOS users to give or deny apps permission to track their activity, has angered more than a few social media companies whose business models rely on this type of tracking for targeted advertising.

According to one estimate, the iOS feature cost Snap, Facebook, Twitter and YouTube as much as $ 9.85 billion in lost revenue in the second half of 2021.

Snap, whose profit mainly comes from the sale of digital advertising on the popular photo and video application, was among the hardest hit. Company shares steep by approximately 25% last month after a unimpressive earnings report for the third quarter, which she attributed in part to the aftermath of Apple’s privacy updates.

In the lawsuit, which was filed with the U.S. District Court for the Central District of California, Snap is accused of violating federal securities laws. According to the submission, Snap’s chief business officer, Jeremi Gorman, expressed confidence in investors back in February on adapting Snap’s business model to Apple’s then-coming policy change.

“Overall, we feel very well prepared for these changes,” he said during the earnings talks, although he also warned that “changes in this ecosystem are usually disruptive and the outcome is uncertain.”

During the second earnings call in July, Gorman outlined several new privacy-focused features for advertisers that Snap launched in preparation for Apple’s privacy update, such as advanced conversions, which uses 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 in order to paint a brighter picture of the effects of Apple’s new policy when, in reality, the damage had already begun to show. The lawsuit alleges that “Snap overestimated its ability to transmit its advertising with Apple’s privacy changes” and “knew, but mitigated, the risks of the impact that Apple’s privacy changes had on the company’s advertising business.”

According to the submission, Snap’s shareholders “suffered significant losses and damages” due to the sharp drop in share prices, as well as Snap’s “wrong actions and omissions”. Black is seeking to “compensate for the damages caused” by Snap’s alleged violation of federal securities laws, although the report does not specify the exact amount in dollars.

Apple’s privacy updates have also dealt a blow to other companies that depend on online advertising to make a profit. Graham Mudd, vice president of product marketing at Facebook owned by Meta, said in September that the company “expects increased negative winds due to platform changes, especially recent iOS updates, to have a greater impact in the third quarter compared to the second quarter”. Earlier, Facebook joined full PR campaign against Apple during 2020 and earlier this year to try to convince users that greater control over their data is actually a bad thing.

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Naveen Kumar

Friendly communicator. Music maven. Explorer. Pop culture trailblazer. Social media practitioner.

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