Apple iPad Pro Apple in a store counter showing antitrust arguments using privacy and security

EU Tech Chief Shoots Down One of Apple’s Strongest Arguments: “Privacy and Security” Cannot be Used as Defenses Against Antitrust Charges

As Apple fends off a variety of lawsuits and antitrust probes around the world, one of the chief arguments it has put forward for its “walled garden” practices is that they are essential for high levels of privacy and security. Margrethe Vestager, Executive Vice President of the European Commission, is having none of it.

Vestager warned Apple that its antitrust issues cannot be dispelled simply by invoking privacy and security concerns. She has previously proposed rules that would require Apple to allow sideloading and third-party app stores on its devices, and has pointedly said that she believes privacy and security would not be compromised if this were the case.

Apple maintains iPhone privacy and security would be ruined by free third-party access

Though Apple faces a variety of antitrust issues that it has invoked privacy and security in defense of, these particular comments stem from Apple CEO Tim Cook’s criticism of the proposed Digital Markets Act (DMA) last month. Vestager is a driving force behind the DMA, which is focused on limiting the power of tech giants. Under the DMA companies such as Apple, Amazon and Facebook would be designated as “gatekeepers” and subject to special rules accompanied by harsher fines than current General Data Protection Regulation (GDPR) terms offer. Submitted by the European Commission, the DMA needs to be approved by the Parliament and the Council of the European Union before a potential implementation in 2023.

Among the DMA terms are a proposed guarantee that gatekeeper platforms allow third-party app stores, something that Apple currently forbids in the name of protecting privacy and security. The DMA would also allow “sideloading,” a practice that some apps that have been banned from the App Store make use of. Epic Games, which is currently in a legal battle with Apple over this very issue, offers its popular game Fortnite on iOS devices in this way after it was banned for implementing a third-party payment system to get around Apple’s mandatory 30% transaction fee on every sale.

Vestager told reporters that she believes privacy and security is a matter of paramount importance to users, but that it would not be compromised by allowing third-party access to Apple’s platforms in this way. She explained that customers would be reasonably expected to seek the same level of privacy and security from these alternatives. However, she also specified that Apple’s new privacy changes for consumers (the App Tracking Transparency framework) were not being examined as part of any antitrust considerations. For his part, Cook has said that the App Tracking Transparency program would be rendered ineffective if sideloading was allowed.

In late June Apple issued a 16-page report arguing against sideloading, thought to be in response to similar proposed legislation in the United States that would force it to allow third-party app stores. One of the arguments the company made was that iOS was a special case given that iPhones contain more sensitive personal information than the average computer. It also claims that the App Store review process is necessary to keep malware off the platform.

Apple navigating multiple antitrust challenges

In a separate case, the EU Commission is probing Apple over allegations that its own Apple Music service has an unfair advantage over similar streaming services on the platform. Vestager is also involved with this case, in which a preliminary judgement was issued against Apple in late April. The case revolves around Apple’s mandatory fees for developers and forbidding the use of in-app purchases made outside of its framework, the two points that nearly all of Cupertino’s antitrust woes come back to.

Some cases have focused on portraying the Apple ecosystem as being so large that app developers should have a right of access to it without being subject to the company’s arbitrary terms. iOS is one of the two viable mobile operating systems in most of the world, and while its market share is secondary to Android it is nevertheless very substantial and also regarded as much more lucrative on a per-user basis. Some app developers argue that being cut off from Apple means that they cannot viably do business in the mobile marketplace.

Among the DMA terms are a proposed guarantee that gatekeeper platforms allow third-party app stores, something that Apple currently forbids in the name of protecting #privacy and #security. #respectdataClick to Tweet

In addition to its antitrust probes in the EU and US and its legal battle with Epic Games, Apple is also dealing with lawsuits from Spotify and a number of smaller publishers and app developers that are predicated along these lines. The EU is also probing digital wallet Apple Pay out of antitrust concerns, under claims that Apple restricts key functionality from competing digital payment services.

 

Senior Correspondent at CPO Magazine