A major privacy feature Apple launched last year, called App Tracking transparency, which requires third party apps to request permission from iOS users to track their digital activity for ad targeting, is facing another antitrust investigation in Europe.
A year ago, France's antitrust regulator said it would be watching how Apple operates the feature. The feature was probed at the end of last year.
In a deep dive mobile market study published last week, the UK's Competition and Markets Authority raised concerns about Apple's implementation of ATT. The UK watchdog has so far deferred intervention over the feature as it waits for the government to act on a major competition reform targeting tech giants' market power.
Germany is ahead of the curve as its ex ante digital competition reboot came into force at the start of 2021, targeting tech giants that are judged to have so-called "paramount significance for competition across markets"
The FCO confirmed in a first decision in January that Google met the bar.
There are more than one assessment ongoing. After opening a market power procedure last summer, Apple's business is still being considered. The regulator says it is taking action against conduct that can possibly be classified as meeting the definition for the ex ante powers to apply.
It looks like the FCO is leaning towards a view that Apple will be in scope of the beefed up regime, as well as trying to maximize future enforcement by opening a probe of Apple's tracking rules now that's based on the updated law If it waited for the market power procedure to finish before probing ATT, it would save time.
The FCO notes that the possibilities for Apple to combine data across services and users' options regarding the processing of their data by Apple can be relevant.
The president of the regulatory body commented on the statement.
“We welcome business models which use data carefully and give users choice as to how their data are used. A corporation like Apple which is in a position to unilaterally set rules for its ecosystem, in particular for its app store, should make pro-competitive rules. We have reason to doubt that this is the case when we see that Apple’s rules apply to third parties but not to Apple itself. This would allow Apple to preference its own offers or impede other companies. Our proceeding is largely based on the new competencies we received as part of the stricter abuse control rules regarding large digital companies which were introduced last year (Section 19a German Competition Act — GWB). On this basis, we are conducting or have already concluded proceedings against Google/Alphabet, Meta/Facebook and Amazon.”
A statement was sent by Apple after it was contacted.
“Apple believes in thriving and competitive markets, and through the App Store, we’ve helped millions of developers turn their brightest ideas into apps that change the world. In Germany alone, the iOS app economy supports hundreds of thousands of jobs and has given developers of all sizes the same opportunity to share their passion and creativity with users, while creating a secure and trusted place for customers to download the apps they love.
“Privacy has always been at the center of our products and features. At Apple, we believe that a user’s data belongs to them and they should get to decide whether to share their data and with whom. We have long believed in the power of advertising to connect businesses with customers — and that you can have great advertising with great privacy. App Tracking Transparency (ATT) simply gives users the choice whether or not they want to allow apps to track them or share their information with data brokers. ATT does not prevent companies from advertising or restrict their use of the first-party data they obtain from users with their consent.
“These rules apply equally to all developers — including Apple — and we have received strong support from regulators and privacy advocates for this feature. Apple holds itself to a higher privacy standard than almost any other company by providing users with an affirmative choice as to whether or not they would like personalized ads at all.
“We will continue to engage constructively with the FCO to address any of their questions and discuss how our approach promotes competition and choice, while protecting users’ privacy and security.”
Apple requiring app developers to ask users for consent to track them, which has been acknowledged by several competition watchdogs as a privacy benefit for users, appears to be the focus of European regulators.
Apple argues that the comparison is unfair since it uses first party data for ads and uses third party data to target ads.
European antitrust regulators may take a different view, given their focus on competition, and they may force Apple to make changes to how it implements ATT in these markets.
It is clear that there are privacy benefits associated with the introduction of ATT as it enhances users' privacy and control over their personal data.
Apple's current implementation of ATT is likely to result in harm to competition, make it harder for app developers to find customers and to monetise their apps, and ultimately harm consumers.
Changes to European Union competition law aimed at setting rules of the road for how so called Internet gatekeepers must do business are hanging over tech giants in the region.
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