Apple Faces Antitrust Complaint in France Over Privacy Changes in iPhones
October 28 2020 - 10:30AM
Dow Jones News
By Keach Hagey and Patience Haggin
Advertising companies and publishers have filed a complaint
against Apple Inc. with France's competition authority, arguing
that privacy changes the smartphone maker plans to roll out are
anticompetitive.
Starting in early 2021, Apple's operating software will require
apps to get opt-in permission from users to collect their
advertising identifier, a key number used to deliver targeted ads
and check how ad campaigns performed.
The companies behind the complaint, brought through a group of
trade associations, say few users will agree to be tracked, making
it harder for companies from game-makers to news publishers to sell
personalized ads and tough for the middlemen in those
transactions.
The case is one of the first legal challenges to online-privacy
measures on antitrust grounds.
"At the highest level, this is a novel case -- a truly important
case -- because it deals with the use of privacy as a sort of fig
leaf for anticompetitive conduct," said Damien Geradin, the
competition lawyer representing the coalition of industry groups,
including the Interactive Advertising Bureau France. "We think that
this is the sort of thing that will arise increasingly in the
future."
Apple's move has drawn criticism from others, including Facebook
Inc., which said in August the changes would affect its brokering
of ad sales in outside apps.
Apple said "privacy is a fundamental right," adding, "A user's
data belongs to them and they should get to decide whether to share
their data and with whom."
Privacy advocates say consumers should have as much control as
possible over how their data is collected and used. In recent
years, a push toward greater online privacy has resulted in new
laws in Europe and California. The complaint centers on Apple's
move to introduce its own, more "ominous," language asking users to
opt-in, separate from the prompts already required by European
privacy law.
Apple's new software will require apps to ask users whether they
want their behavior to be tracked for the purposes of showing
personalized ads. The complaint alleges that Apple's language will
repel most users and render the advertising identifier useless for
the vast online-ad ecosystem. In a survey by Tap Research Inc., 85%
of respondents said if given the choice they would ask apps not to
track them.
The trade associations also asked French authorities for interim
measures -- similar to an injunction -- to block Apple from making
its changes while it investigates the larger complaint.
Apple initially planned to introduce the changes in September
2020. Following high-profile criticism from Facebook and others
this summer, Apple delayed the change to early next year.
Some publishers have expressed concern that they won't be able
to charge as much to show ads to iPhone users who don't agree to
tracking. Companies that run ads to encourage users to download an
app -- a $57.8 billion global market in 2019, according to
digital-ad analytics firm AppsFlyer -- rely on Apple's identifier
to track how effective their campaigns were.
DMG Media, operator of the Daily Mail and MailOnline, raised
concerns with the Justice Department in August that the ad-tracking
prompt would be anticompetitive, said a person familiar with the
matter.
The prompts asking for users' permission won't apply to Apple's
own digital-ad business, which Arete Research estimated will
generate between $3 billion and $4 billion in 2020 revenue. Apple
personalizes ads shown in the App Store and on Apple News based on
where users go and what users do in Apple's apps. To opt out of
that tracking, users must find an option in the iPhone's
settings.
Apple said its own data collection doesn't count as tracking
because it doesn't share the data with other companies. "These
rules apply equally to all developers -- including Apple," an Apple
spokesman said.
Nicolas Rieul, the chairman of IAB France, said Apple's proposed
changes would have a dramatic impact on the industry in France.
"Particularly at the moment of a global pandemic crisis, it's
not a good time to have another hit," he said.
Write to Keach Hagey at keach.hagey@wsj.com and Patience Haggin
at patience.haggin@wsj.com
(END) Dow Jones Newswires
October 28, 2020 10:15 ET (14:15 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
Apple (NASDAQ:AAPL)
Historical Stock Chart
From Feb 2024 to Mar 2024
Apple (NASDAQ:AAPL)
Historical Stock Chart
From Mar 2023 to Mar 2024