That Apple is unfairly privileging its own ads business. It's a tough cookie though; the offending behavior is simply Apple's truthful (if arguably hyperbolic) notice and consent popup.

It could work if they demonstrate that Apple does track its user across apps for advertising purposes without showing consent dialogs. I am more than a bit skeptical, but you never know.

Is that illegal though?

Apple isn't a monopoly -- they're a walled garden.

I'm all for regulations that force Apple to open up their hardware so that people can install different software on it, or to disable the walled-garden mode of their software platform akin to how you can install lineageOS or freedroid on android devices but I don't think it's reasonable to mandate that Apple must allow Facebook to do something with their software simply because Apple does it with theirs.

iAds will definitely be privileged. If you read the documentation on what is available to Apple vs. others, you will see Apple's own ad business will definitely benefit from this.

You mean iAd that was discontinued in 2016?

https://en.wikipedia.org/wiki/IAd

Wikipedia said iAd have been discontinued. Did I miss something?

iAds will definitely not be able to track user behavior within apps the way Facebook does.

If there is some documentation you claim shows iAds being privileged, please post a link.