Apple store glass building in Munich. Germany showing antitrust probe on app tracking

Apple’s “App Tracking Transparency” Privacy Framework Faces New Antitrust Probe in Germany

While Apple’s App Tracking Transparency (ATT) framework was broadly seen as a privacy win for consumers, it has been bitterly contested by commercial interests. These companies are not without at least some amount of legitimate concerns, particularly as viewed through the lens of other anti-competition against Apple, and another country in Europe has joined the debate in opening an antitrust probe into ATT.

This follows a probe initiated by Poland in late 2021, and the expression of concerns along similar lines by both France and the United Kingdom (who each pledged ongoing scrutiny of the feature). The primary concern is that Apple offers its own products that compete directly with certain ad-supported services, and the way it structures its rules tilt the playing field in its own favor.

Apple antitrust probes encompass ATT as Cupertino approaches two decades of legal scrutiny

Apple has been the subject of a broad assortment of probes, investigations and legal actions involving its online services, largely owed to its unique “walled garden” approach to managing its ecosystem. These actions date back as far as 2005, when the company began facing class action lawsuits over its alleged monopoly status in the world of digital music downloads. The first iteration of the iPhone was also quickly taken to court in its launch year over the company’s initial policy of banning third-party apps entirely.

This would create a pattern for the company that continues to persist almost two decades later. There are still monopoly complaints about Apple’s pricing and app policing policies working through legal systems around the world, but the current antitrust probes focus on uneven application of the company’s app tracking policies. As the steward of one of essentially two commercial options for mobile operating systems in most of the world, the company is subject to special rules about how it plays ball in its own backyard.

The antitrust probe in Germany is being handled by the Federal Cartel Office (FCO) and will examine whether the app tracking rules create unfair competition barriers for other app developers that list their products on Apple’s App Store, or if the company self-preferences its own apps. First implemented with the release of iOS 14.5, ATT requires third-party developers that implement personalized advertising to disclose this during app downloads and to obtain affirmative consent from the end user. The move is estimated to have had a severe impact on the Apple advertising market, with studies indicating that about 60% to 80% of users are opting out of tracking (and some advertisers reporting as much as a 20% loss of revenue). Apple does not apply these rules to its own first-party apps, however, under the argument that it does not let the handful that do engage in app tracking (primarily Apple News and the App Store) pass personal data outside of the company’s ecosystem.

Germany’s FCO has stronger rules for large tech companies than most other countries in the region. The agency passed new rules specifically aimed at tech giants in 2021 and has since been individually reviewing companies to determine if they should be governed by the terms; rival mobile OS producer Google was named as one such company in January of this year, but Apple is still being reviewed.

Apple’s internal app tracking in question

For its part, Apple claims that it holds itself to its own app tracking rules in cases where third-party data collection is involved; the company just doesn’t have an app that does that yet. However, the FCO has expressed concern that Apple’s first-party apps are “using and combining” data from outside sources for targeted advertising. Apple insists that its first-party personalized advertising is entirely contextual based on user actions within that app, for example searches made in the App Store or topics the user focuses on in Apple News.

An investigation into this same issue in France last year concluded that Apple was not abusing its market position and did not require an antitrust probe, but that national regulators would need to keep an eye on ATT going forward to ensure that remained the case. The UK Competition and Markets Authority recently expressed concerns about Apple’s app tracking practices in a study, but has stopped short of an antitrust probe as the country sits in the midst of a legal reform that would grant regulators similar powers to those the FCO holds in cases that involve big tech companies.

Germany has opened an #antitrust probe into Apple's #AppTracking Transparency framework. This follows a probe initiated by Poland in late 2021, and the expression of concerns along similar lines by both France and the UK. #privacy #respectdataClick to Tweet

Apple currently faces additional antitrust probes from the European Commission over its music streaming service and Apple Pay, the US Department of Justice over its general practices in third-party app publishing and mandatory fees, India’s Competition Commission over its app store fees, Italy over its cloud computing products, and the Netherlands over its near-field communication payment system.

 

Senior Correspondent at CPO Magazine