Apple is facing a fresh antitrust investigation in Germany since its own apps are exempt from the App Tracking Transparency (ATT) framework. The company’s policies which require third-party apps to seek user permission before tracking activity, are under the scanner.
What is ATT?
If you aren’t already familiar with Apple’s ATT framework, it is a privacy-centric system allowing users to control how their activity across apps and platforms is tracked. It was introduced with iOS 14.5 and iPadOS 14.5 in April last year. Usually, trackers and cookies in apps and browsers send your activity data, such as search queries, to advertisers. The advertisers then monetize the information by serving you targeted advertisements. That’s how your search for sneakers on Amazon transforms into a Nike advertisement on Instagram. This level of granular tracking is enabled by IDs for Advertisers or IDFA tags, which are unique to every device or user connected to the internet.
However, ATT allows you to reduce tracking, so advertisers only get to target groups of users instead of individuals. Apple allows you to turn off tracking, hiding your activity and data from advertisers.
Businesses dependent on advertising revenue are the worst affected. Larger enterprises, such as Facebook’s parent Meta Inc. were vocal critics of the change. It even ran full-page newspaper advertisements alleging that Apple’s policy would severely affect small businesses.
Later, reports suggested that the ATT had translated into a “windfall” for Apple’s advertising business. The company’s mobile app advertising market tripled in just six months after ATT was introduced.
Under the German Scanner
The German Federal Cartel Office, the Bundeskartellamt, announced an investigation into Apple’s ATT framework. It explains that Apple’s system gives its own apps a competitive advantage over others because of its self-serving nature.
The proceedings will examine the “self-preferencing and/or impediment of other companies.” The Bundeskartllamt President Andreas Mundt commented onm the investigation.
“We welcome business models which use data carefully and give users choice as to how their data are used. A corporation like Apple which is in a position to unilaterally set rules for its ecosystem, in particular for its app store, should make pro-competitive rules. 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 preference its own offers or impede other companies. Our proceeding is largely based on the new competencies we received as part of the stricter abuse control rules regarding large digital companies which were introduced last year (Section 19a German Competition Act – GWB). On this basis, we are conducting or have already concluded proceedings against Google/Alphabet, Meta/Facebook and Amazon.”
Apple has shrugged off allegations that the ATT has benefited its businesses. Earlier this year, it even commissioned a Columbia Business School study, concluding that the App Tracking Transparency policy did not financially benefit the iPhone maker. The findings added that allegations suggesting otherwise were unsubstantiated by evidence.