Editor's note: Apple and Facebook are among NPR's financial supporters.
Starting Monday, iPhone and iPad users will have a simple but powerful new way to control how their data is used.
With Apple's latest software update, iOS 14.5, iPhone and iPad users will now encounter pop-ups in the apps they use, asking whether the user wants to allow the app "to track your activity across other companies' apps and websites." The user can then select whether or not to allow the app to track them and share their data.
That little pop-up could create big trouble for companies that make their money through targeted advertising – including Facebook.
Apple released a video explaining how the new features work, and how users' data is collected and sold: "Some apps have trackers embedded in them that have more data than they need – sharing it with third parties like advertisers and data brokers. They collect thousands of pieces of information about you to create a digital profile that they sell to others."
Apple says the average app has six trackers harvesting data.
The video goes on to explain that third parties use these profiles to target ads – and also "to predict and influence your behaviors and decisions. This has been happening without your knowledge or permission."
"Maybe you're okay giving an app your email or location," the Apple ad says. "And if you're not, well, that's what the prompt is for."
Previously, people had to go into their phone's settings and proactively turn off ad personalization.
Targeted advertising is central to the business models of companies including Facebook and Google – but Google has a deal with Apple to make it the default search engine on Apple products. (That deal is part of an antitrust case the Justice Department filed against Google last year.)
Facebook's revenue could take a 7% hit due to the new privacy controls, according to mobile expert Eric Seufert. He and economist Julian Runge say Apple's new framework, called AppTrackingTransparency, "may be the most economically impactful and brazen change to privacy policy in years."
Facebook has fought hard against the new framework, taking out full-page ads in newspapers, as well as TV and radio spots. The company has focused on the stories of small business owners whom it says will be hurt by the obstacles to targeting potential customers with ads.
But Facebook CEO Mark Zuckerberg recently said that this company could be poised to benefit from the change.
"It's possible that we may even be in a stronger position if Apple's changes encourage more businesses to conduct more commerce on our platforms by making it harder for them to use their data in order to find the customers that would want to use their products outside of our platforms," Zuckerberg said last month on the audio chat app Clubhouse, according to The Associated Press.
The Electronic Frontier Foundation lauded the new privacy controls: "Requiring trackers to request your consent before stalking you across the Internet should be an obvious baseline," though it noted the changes only extend to third-party data sharing, and do not limit data collection by the app itself.
Whether Apple's new privacy pop-ups make a big impact will depend on how well users understand what they mean, says Jennifer King, Privacy and Data Policy Fellow at the Stanford Institute for Human-Centered Artificial Intelligence.
"It's very hard to know right now if iOS users will understand what this screen is asking them to do and whether they will ask their apps not to track in large enough numbers to have any real effect on revenue," King wrote in an email to NPR.
She says the changes will also shed light on whether companies really need such invasive tools in order to target ads.
"It's basically a real-time experiment that regulators, in particular EU regulators, will be watching closely—and if the companies survive it, it lends credence to the argument that regulation in this area will not doom online advertisers in the ways they've been claiming it will," King says.