France targets Apple over use of data for advertising

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France’s antitrust authority has issued a formal complaint against Apple, claiming the iPhone maker abused its dominant market position to impose conditions on the use of personal data for advertising.

A statement Tuesday from the French competition authority said Apple’s practices were likely to affect “several related markets for 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 also launched similar investigations.

App Tracking Transparency, Apple’s privacy policy, was implemented in April 2021. This forces developers to ask for a user’s permission if they plan to “track” their movements from app to app, a common tactic for building a digital profile of a user and targeting them with personalized ads.

Such “tracking” techniques rely on capturing a user’s “identifier for advertisers”, or IDFA, a string of digits comparable to a social security number. Apple announced the move in 2020, leading to claims that it was an “IDFA apocalypse” in the $400 billion digital advertising industry. For example, Facebook estimates that it could lose $10 billion in annual revenue by 2022.

France’s competition authority, which will launch an investigation over the complaint’s claims, branded the rules “discriminatory” and “non-transparent”.

Apple on Tuesday disputed the allegations, saying it holds its own advertising business “to a higher standard of privacy than any other developer”.

However, the tech conglomerate’s ownership of hardware, operating systems and app stores gives it the leverage to target its 1 billion users beyond its rivals. In October 2021, within six months of introducing the privacy change, Apple’s new advertising business tripled its market share.

Apple has described its advertising business as “growing incredibly fast”, while research group Evercore ISI has forecast that the iPhone maker’s advertising revenue will grow from $5bn in 2022 to $30bn by 2026.

In a statement, Apple defended its policies, saying that forcing developers to ask permission before “tracking them” gives users more control.

The company said, “Like all developers, Apple is required to comply with the policy”. It acknowledged that none of the company’s apps use the ATT prompt, but said this is because they do not rely on a user’s IDFA to build a profile.

Apple has been criticized because it can personalize ads for users from its own “first-party” data, which includes downloaded music, books and movies, as well as in-app purchases and subscriptions. Other companies do not have access to that information and some claim that Apple takes advantage of its position.

Apple said users have the option to turn off personalized ads, which 80 percent have turned off.

“We’ve received strong support from regulators and privacy advocates before” on the goals of the policy, Apple said. “We will continue to engage constructively with (the French authorities) to ensure that users remain in control of their data.”