Watchdog ponders why Apple doesn’t apply its strict app tracking rules to itself – Source: go.theregister.com

Apple is feeling the heat over its acclaimed iPhone privacy policy after a German regulator’s review of iOS tracking consent alleged that the tech giant exempted itself from the rules it enforces on third-party developers.

In a preliminary legal assessment of Apple’s App Tracking Transparency framework (ATTF), Germany’s competition watchdog said the “strict requirements under the ATTF only apply to third-party app providers, not to Apple itself.”

It is a common tactic to track users across devices – sometimes by a free app dev trying to get paid a premium for “profiled” ads, sometimes by a technical vendor selling services to the ad industry or a content provider that traditionally would have run print ads, like a newspaper. Whether or not users know it is happening and agree to it is probably a better question.

Since 2021, when Apple set up the iOS ATTF, app devs have had to ask ‌iPhone‌ and ‌iPad‌ users for their consent before applications could track their activity across other apps such as Facebook. Facebook owner Meta had a problem with this, especially when a 2022 ATTF update began to preclude advertisers from using data across their own platforms. This practice is known as “first-party” tracking as opposed to “third-party” tracking.

As one programmatic ad news outlet pointed out, Facebook was actually hit the hardest by the 2022 first-party rules because its software development kit (SDK) “plugged into so many outside apps and … its attribution pixels [were] littered liberally across the web.” This meant that when an iPhone user with the latest ATTF update was on Instagram, data could not be collected on what the user was doing on Facebook, and vice versa.

Meta was so worried about this that it chalked up a $10 billion hole in potential ad sales to the move, with CFO Dave Wehner saying in a February 2022 earnings call [PDF] discussing its full-year 2021 results: “We believe the impact of iOS overall as a headwind on our business in 2022 is on the order of $10 billion.”

Judging by what the Bundeskartellamt said of its preliminary findings, though, Apple’s “comprehensive digital ecosystem” appears to suffer less degradation in cross-tracking.

The Federal Cartel Office claims that Apple’s ATTF defines “tracking” in a way that only covers data processing for advertising purposes across companies – but that these “strict … rules do not cover Apple’s own practice of combining user data across its ecosystem – from its App Store, Apple ID and connected devices – and using them for advertising purposes.”

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Additionally, it says the consent dialogues for Apple’s apps differ “substantially” from those of third-party apps. The current design, particularly the wording of the dialogue for Apple’s own apps, makes it “more likely that users will consent than that of the ATTF dialogue for third-party apps.”

It also claims that people using third-party apps will see up to four consecutive consent prompts, while Apple apps receive only a “maximum of two,” which do not properly explain that Apple’s processing of user data across services constitutes first-party tracking.

Apple has been under extra scrutiny in Germany since April 2023, when the regulator determined that Apple had “cross-market significance for competition,” meaning it is now subject to “extended abuse control.” Apple appealed to the Federal Court of Justice over this on January 28. The court’s decision will be delivered on March 18.

Andreas Mundt, President of the Federal Cartel Office, said: “Apple operates a comprehensive digital ecosystem, which, through its many services and connected devices, the App Store and Apple ID, provides Apple with extensive access to user data relevant for advertising. Apple uses some of these data to offer advertising space for personalized advertising in its App Store, generating significant revenues.”

He said advertising was also of “great commercial significance for other companies wishing to offer free apps, some of which compete with Apple’s own services, in the App Store.” Those providers do not have a “wealth of broad and deep user data to draw on” like Apple does, he added.

“For us, it is key that users can make a free and informed decision about whether or not their data may be used for personalized advertising at all. The question at hand is whether Apple is allowed to apply stricter criteria to other providers than to itself when it comes to requesting such user consent. In our preliminary view, doing so may amount to unequal treatment and self-preferencing, which are prohibited under competition law.”

Apple had not responded to a request for comment at the time of publication. ®