Apple is of course still performing data collection for targeted iAds, but that's the reason they don't call it "tracking."
If you go to Settings > Privacy > Apple Advertising on iOS it tells you so:
"The Apple advertising platform does not track you. It is designed to protect your privacy and does not follow you across apps and websites owned by other companies. You have control over how Apple uses your information."
Note that I'm not necessarily agreeing that what Apple does doesn't fall under the description of "tracking." Just pointing out why Apple calls what Facebook does "tracking" but not their own iAds.
My first question would be... why? What's their motivation?
Facebook has to track users to make money, it's their entire business model.
The same is not true of Apple, who make almost all their profits from hardware sales and are worth over $2 trillion.
Going out of their way to get a third party to secretly spy on users on their behalf sounds like far more effort and risk than it's worth to me. It's not like they're desperate for extra cash.
And it's not like it'd be impossible to find out if it was indeed the case. iOS gets reverse engineered all the time. I can see all the traffic my iPhone sends through my DNS logs. If this hypothetical third party was embedded in iOS spying on user activity, it'd be spotted quite easily and quickly.
So I ask again, why would Apple do that? Aside from being a total PR nightmare it'd be straight up illegal.
I trust Apple because I don't see what reason they have to lie when they've built a multi-trillion dollar business without tracking their users already.
So it's a matter of making a call between using vendors we know for a fact are tracking you, some of which have lied about it (see, hard to keep these things secret), or one that at least claims not to and has a lot to lose if caught out.
It seems unlikely Apple is going to outright lie about something like that considering it could open them up to serious legal liability (CCPA, GDPR, etc).
It would of course be good for Apple to call their own behavior "tracking" as well, because that's what it is; that is the most accurate word for what is happening. "Personalized ads" do not accurately reflect what is happening because ads can be personalized in lots of different ways, only some of which involve user tracking.
But I don't think that has anything to do with Facebook's argument. Facebook's argument here isn't "everyone wants to exploit users, but only Apple is getting to do it", their argument is that users like tracking, that the tracking Facebook does is not exploitative. Well if that's the case, then if you show users a dialog that asks them whether or not they want to be tracked and there's a "yes" button and a "no" button, then users who do want to be tracked will click "yes."
When I say that the options are shown on equal terms, I mean that neither option is privileged for Facebook. It's exactly the same amount of work for a user to opt into Facebook tracking as it is for them to opt out if it. That means that Facebook can't blame application defaults for consumer behavior, consumers are actually making a real choice here.
It’s not possible to de-personalize Facebook, its whole knowledge graph is built around identities. Permission to use that data can be managed internally but it’s always gathered and processed initially as personalized.
Apple doesn't mind if users turn off the data feed to Facebook, but obviously they don't want users disabling the same data feed to their advertising network.