The German Federal Cartel Office has initiated proceedings against Apple to investigate whether its tracking rules and anti-tracking technology are anti-competitive and self-serving, according to a press release.
In the proceedings announced today, Apple's tracking rules, and in particular the App Tracking Transparency Framework (ATT), will be reviewed under competition law to determine whether they favor Apple itself or represent a hindrance to third-party apps. Andreas Mundt, President of the Federal Cartel Office, commented:
We welcome business models that handle data carefully and give users the choice of how their data is used. A company like Apple, which is able to unilaterally set rules for its ecosystem, especially for its App Store, should set rules that promote competition. We have reason to doubt that this is the case when we see that Apple's rules apply to third parties but not to Apple itself. This would allow Apple to favor its own offerings or hinder other companies. Our approach is largely based on the new powers we received under the stricter abuse control rules for large digital companies introduced last year (Section 19a of the Competition Act - GWB). On this basis, we are conducting or have already concluded proceedings against Google/Alphabet, Meta/Facebook and Amazon.
Apple's App Tracking Transparency Framework, introduced in April 2021 with the release of iOS 14.5 and iPadOS 14.5, requires all apps on iPhone and iPad to obtain the user's consent before tracking their activity in other apps. Apps that want to track a user based on their device's unique advertising identifier can only do so if the user allows it when asked.
Apple's ATT feature: Not the first investigation
Apple said the feature is intended to protect users, not to benefit the company. However, the Federal Cartel Office's preliminary findings show that while users can prohibit Apple from using their data for personalized advertising, Apple "is not subject to the new and additional rules of the App Tracking Transparency Framework." The German competition authority's proceedings follow an earlier one initiated against Apple in June 2021 to investigate allegations of anti-competitive behavior related to the App Store, its products, and other services. Many advertisers are affected by ATT, with Facebook being the most vocal and critical of the new change. Since Apple began beta testing the framework, Facebook has accused Apple of harming small businesses that rely on advertising to keep their doors open.
Study proves opposite
Facebook also claimed that the framework was anti-competitive because it gave Apple the upper hand to run its own mobile advertising business on iOS devices. An October 2021 Financial Times report claimed that ATT has resulted in a "windfall" for Apple's advertising business since its launch. The report claimed that Apple's share of the mobile app advertising market tripled in the six months following the feature's launch. Apple has refuted claims that its ATT system gives it an unfair advantage to the detriment of third parties. Earlier this year, Apple commissioned a study on the impact of ATT, conducted by the marketing department at Columbia Business School. The study concluded that it is unlikely that Apple has gained any significant financial advantage since introducing the privacy feature and that claims to the contrary are speculative and lack evidence. (Photo by Unsplash / David Grandmougin)
