Apparent Conflicts of Interest in App Tracking Transparency Rules Targeted by German Antitrust Probe

Natasha Lomas, TechCrunch:

A major privacy feature Apple launched last year, called App Tracking Transparency (ATT) — which requires third-party apps to request permission from iOS users to track their digital activity for ad targeting — is facing another antitrust probe in Europe: Germany’s Federal Cartel Office (FCO) has just announced it’s investigating the framework over concerns that Apple could be breaching competition rules by self-preferencing or creating unfair barriers for other companies.

Last year, France’s antitrust regulator declined to preemptively block Apple from implementing ATT — but said it would be watching how Apple operates in the feature. Poland also opened a probe of the feature at the end of last year.

Germany’s Federal Cartel Office, or Bundeskartellamt, published a version of its press release (PDF) in English.

Shoshana Wodinsky, Gizmodo:

The Bundeskartellamt’s investigation is primarily focused on Apple’s App Tracking Transparency Framework (or ATT, for short). For those unfamiliar, ATT is the set of rules that Apple rolled out as part of iOS 14 that require third-party app developers to ask for permission to track the users that download their apps — and when those users say no, ATT is what shuts off these apps’ access to a slew of valuable user data. You might recognize it from the small window that pops up and asks you whether you want to give an app access to your personal information, and you can respond with “Ask app not to track” or “Allow.”

It appears German authorities are not taking issue with App Tracking Transparency in a general sense but, rather, the conditions Apple has set for whether an app must request permission to track users. Apple says developers must get consent for apps that “[collect] data about end users and [share] it with other companies for purposes of tracking across apps and web sites”. Apple does the former, but it is everything after the “and” it does not do — and German regulators are investigating whether that gives it an advantage.

On its face, this investigation seems ridiculous. The App Tracking Transparency framework is merely intervening in third party apps to confirm whether the user is okay with being tracked in plain language. That sounds fine with me. The digital advertising industry is built on data collected illegitimately, with little consent, and with virtually no regulations. It is long past time for those behaviours to be reeled in.

Apple, as platform owner, gets access to a whole lot more ad targeting information than most individual apps, and because it is all first-party information not shared with anyone else, Apple does not need to ask permission for its ad network to use it. This appears okay: users have agreed to a business relationship with Apple, so of course it gets to use information it knows about users to target ads, and none of this is going to anyone else, so it is not creepy.

However, this advantage is difficult to replicate by any individual app or service. Only other gigantic companies, like Amazon and Facebook, can draw upon a trove of first-party data for ad targeting purposes. I have been arguing for the past year how it looks really bad for Apple to be setting privacy rules on its platform that restrict third-party advertisers while running its own ad network.

The solution here is not to empower others to more easily track users. If Apple is found to be illegally self-preferencing, I would hope it is resolved by allowing the continued operation of App Tracking Transparency while requiring Apple to reduce its first-party advantage.

This gives me a good reason to share my favourite Norm Macdonald joke (contains NSFW language, if that is a concern).