Apple Prepares To Expand Ad Business Amid Allegations Of Stifling Rivals: Report - Apple (NASDAQ:AAPL)

Apple Inc. AAPL is preparing to expand its advertising business even as it rolls out new privacy rules for iPhones that could hurt the ad business of rivals such as Facebook Inc. FB, the Financial Times reported Wednesday.

What Happened: Apple plans to add a second advertising slot in the “suggested” apps section in its App Store search page, according to the report, citing two people familiar with the tech giant’s plans.

The Tim Cook-led company already sells search ads for its App Store that enable developers to pay for the top result.

The new advertising slot, to be rolled out by the end of April, will reportedly allow advertisers to promote their apps across the entire network, rather than in response to specific searches.

Why It Matters: The privacy-related changes are due to become applicable in Apple’s upcoming iOS 14.5 update. The new feature will require apps to obtain permission from users before tracking them and displaying targeted advertisements, according to Apple.

Apple’s new privacy changes will give users more privacy from mobile advertising but is unpopular with app developers, many of which are small businesses.

Facebook had bitterly criticized Apple’s privacy rule changes for months, saying that the changes could impact targeted advertising on its platform. The social media giant is the second-largest recipient of advertisement revenues after Alphabet Inc. GOOG GOOGL.

However, Facebook CEO Mark Zuckerberg said in March that the rule changes could benefit his company if more businesses decide to sell goods directly through Facebook and Instagram.

Apple acquired Quattro Wireless in 2010 as part of efforts to boost its mobile advertising business. Quattro is a competitor to AdMob, which Google acquired for $750 million.

Price Action: Apple shares closed almost 0.3% higher on Wednesday at $133.50.

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