The shares of Facebook, Twitter and other online advertising and social networking companies have fallen significantly after Snap reported it has lost a fifth of its market cap.
The reason behind the drop is Apple's new privacy policy, which has "revolutionized the online advertising market," Snap CEO Evan Spiegel has said.
Facebook and Twitter shares have fallen 6% and 5%, respectively, while Alphabet and Pinterest shares have lost 2%, CNBC reports. In addition, online advertising companies that rely on customer data have been hit. Trade Desk and Magnite have fallen more than 5%, while Liveramp shares have lost more than 3%.
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Tech companies have long expressed concern over changes to a privacy policy known as App Tracking Transparency, which asks users via a pop-up window whether they agree to be tracked. Advertisers are finding it increasingly difficult to track the performance of their campaigns. Spiegel said:
"The new Apple-provided measurement solution did not scale as we had expected, making it more difficult for our advertising partners to measure and manage their ad campaigns for iOS."
Spiegel has also warned that due to global logistical issues and labor shortages during the fourth quarter, advertising budgets will shrink and Snap's forecasts will deteriorate.