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France’s antitrust authority has issued a formal complaint against Apple, alleging that the iPhone maker has abused its dominant position in the market to impose conditions on the use of personal data for advertising.
A statement from France’s competition authority on Tuesday said Apple’s practices likely affected “several markets related to advertising services.”
The complaint is the first major government action against the US tech giant over its advertising rules. However, Germany, Italy and Poland have opened similar investigations.
App Tracking Transparency, Apple’s privacy policy, was implemented in April 2021. It forces developers to ask a user’s permission if they plan to “track” their movements from one app to another, a common tactic for building a digital user profile and targeting them with personalized ads.
These “tracking” technologies rely on capturing a User ID for Advertisers, or IDFA, which is a string of numbers comparable to a Social Security number. Apple announced the move in 2020, leading to claims in the $400 billion digital ad industry that it was the “IDFA apocalypse”. Facebook, for example, estimated that it lost up to $10 billion in annual revenue in 2022 on the back of it.
French competition authorities, who will open an investigation into the grievance claims, have described the rules as “discriminatory” and “non-transparent”.
Apple on Tuesday disputed the allegations, saying it maintains its own advertising business with a “higher level of privacy than any other developer would require.”
However, ownership of the tech stack on the hardware, operating system, and app store provides it with a mechanism to target its 1 billion users in ways that outpace its competitors. In October 2021, within six months of introducing the privacy changes, the fledgling advertising firm Apple had tripled its market share.
Apple has described its advertising business as “incredibly fast-growing,” while research group Evercore ISI has estimated that the iPhone maker’s advertising revenue will jump from $5 billion in 2022 to $30 billion by 2026.
In a statement, Apple defended its policies, saying that forcing developers to ask for permission before being “tracked” gives users more control.
The company added that “Apple, like all developers, is obligated to comply” with this policy. She acknowledged that none of the company’s apps use the ATT prompt, but said that’s because they don’t rely on a user’s IDFA to create a profile on them.
Apple has drawn criticism because it can tailor ads to users from its own “first-party” data, including downloaded music, books, and movies as well as in-app purchases and subscriptions. Other companies do not have access to this information and some claim that Apple is taking advantage of their location.
Apple said users had the option to turn off personalized ads, which 80 percent did.
Apple said, “We have previously received strong support from regulators and privacy advocates” regarding the policy objective. “We will continue to deal with it [French authorities] constructively to ensure that users remain in control of their data.”
