Musk Threatens War With Apple, Jeopardizing Vital Relationship
Elon Musk said Apple has cut back its advertising on Twitter, suggesting that the iPhone maker has joined other major brands in rethinking its relationship with the social network.
(Bloomberg) -- Elon Musk’s tumultuous month atop Twitter Inc. has already included firing most of the company’s employees, tinkering with key features and restoring banned accounts. Now he’s embarking on what could be his riskiest gambit yet: a war with Apple Inc.
The billionaire attacked the iPhone maker with a flurry of tweets Monday, saying the company had cut its Twitter advertising and threatened to bump the social network from Apple’s app store. He asked whether Apple hated free speech, criticized its app fees and even pondered whether the tech giant might go after another of his companies, Tesla Inc.
In taking aim at Apple, Musk is challenging a company that’s vital to Twitter’s livelihood. Apple was consistently one of the top advertisers on the social network, which had an entire team of employees dedicated to helping maintain the relationship, according to people familiar with the matter. The ad spending was well above $100 million annually, one of the people said.
“Elon Musk now represents risk, and Apple is not going to take that risk on,” said Lou Paskalis, a senior marketing and media executive who previously helped direct advertising for Bank of America Corp.
Apple also operates an essential gateway for Twitter users: the App Store. If Musk’s company loses access to that, it will be cut off from more than 1.5 billion devices around the world.
But the billionaire has some leverage of his own. In portraying his struggles as a fight for free speech, he can rally his millions of fans. And his disdain for Apple’s app store fees are shared by software developers, lawmakers and regulators around the world, giving him a potential advantage.
Apple didn’t immediately respond to a request for comment. Some Twitter users said Monday that they continue to see Apple advertising in their feeds, but a person familiar with the matter confirmed that the company has pared back the ads.
The Cupertino, California-based company holds meetings with Twitter to discuss various issues -- roughly once a week -- just as it does with other major social networking apps, including Facebook and Instagram. Apple has historically relied heavily on Twitter because it doesn’t advertise on Facebook, according to one of the people with knowledge of its strategy.
Apple joins a number of large companies in scaling back their ads on Twitter since Musk acquired the company for $44 billion last month. The exodus has included General Mills Inc. and Pfizer Inc., and he previously acknowledged that the defections led to a “massive drop” in revenue.
The overall online ad market is in a slump, but marketers are particularly wary about Twitter over fears that it’s becoming more chaotic. Since the takeover, Musk has cut thousands of jobs at Twitter, fueling concerns that the platform won’t be able to combat hate speech and misinformation. A new approach to verifying accounts also opened the door to trolls impersonating major brands, as well as Musk himself.
Musk, 51, is trying to make Twitter less reliant on advertising by steering users toward its Blue subscription service. But ad services generated nearly 90% of its $5.1 billion in revenue last year, with a good chunk coming from Apple.
The barrage of tweets criticizing Apple began with one saying that the company had “mostly stopped advertising on Twitter.” Musk asked: “Do they hate free speech in America?”
He then directed a tweet at Apple Chief Executive Officer Tim Cook: “What’s going on here?” A few minutes later, he claimed that Apple might boot Twitter from its app store “but won’t tell us why.”
Earlier this month, longtime Apple executive Phil Schiller, who oversees the app store, deleted his Twitter account. The timing raised eyebrows. It was shortly after Musk reinstated the account of former President Donald Trump, who had been booted from the platform in the wake of the attack on the US Capitol in January 2021.
Musk had earlier said he would create a content council to review whether to reinstate Trump’s account, but he then made the move based on the results of a Twitter poll instead. “He says the right things, but he does the wrong things and that’s almost worse,” Paskalis said.
Apple’s Cook has continued to use Twitter personally since Musk’s acquisition. He posted a Thanksgiving message last week “wishing everyone a joyful day.”
Musk has previously tweeted that if Twitter is removed from the Apple and Google app stores, he will make an alternative phone that can work with the platform. Fans of the idea -- and its detractors -- have begun calling it the “Tesla phone,” and that term was trending on Twitter Monday.
Musk, who also runs Tesla and SpaceX, has said that his mission at Twitter is maximizing free speech. He frequently uses his personal account, which has more than 119 million followers, to criticize perceived adversaries and the mainstream media.
Musk has said before that Apple charges an exorbitant fees on in-app purchases, and he renewed that line of attack Monday. He posted a meme that suggested he would rather “go to war” than pay the company’s 30% commission.
The meme signals that Musk could be considering taking the path of Epic Games Inc. and sidestepping Apple’s fees. When Epic made such a move, Apple removed the hit game Fortnite, sparking a multiyear legal fight.
But if Musk wanted to start selling the Twitter Blue subscription service through the web -- bypassing Apple’s 30% -- he could already do so. The app store allows services available on multiple platforms to use that approach.
The issue would be if Twitter advertised the workaround within its app or added a button directing users to the web payment option. That move could risk getting Twitter bumped from the app store.
In another tweet, Musk suggested that Apple has made demands on Twitter’s content moderation. He also posted a yes-no survey: “Apple should publish all censorship actions it has taken that affect its customers.”
In controlling the two major mobile app stores, Apple and Google are frequently referred to as a “duopoly,” a term Musk used in his tweets. US Representative Ken Buck, a Republican from Colorado, took up that idea Monday. He quoted one of Musk’s tweets and said the US should end the app store duopoly before the end of the year. “No one should have this kind of market power,” he said.
Apple has strict rules for its app store that limit objectionable content, including discriminatory content related to religion, race and sexual orientation. It also restricts overly realistic violence and pornographic material.
Apple and Google have previously removed social networks, including Parler, from their platforms because of inadequate content moderation. In the case of Parler, the app was ultimately restored to both app stores after the social network followed a series of steps to ensure it was moderating content.
After directing several barbs at Apple, Musk promised more information on free speech suppression in “The Twitter Files,” which will be published -- where else? -- on Twitter.
“The public deserves to know what really happened,” he said.
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