Wednesday, June 29, 2022

German Antitrust Probe Into App Tracking Transparency

Tim Hardwick:

Germany’s Federal Cartel Office, the Bundeskartellamt, 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.


Apple said the feature was designed to protect users and not to advantage the company. However, the Bundeskartellamt’s preliminary findings indicate that while users can also restrict Apple from using their data for personalized advertising, Apple “is not subject to the new and additional rules of the App Tracking Transparency Framework.”

John Gruber:

Apple’s privacy and tracking rules do apply to itself. Apple’s own apps don’t show the track-you-across-other-apps permission alert not because Apple has exempted itself but because Apple’s own apps don’t track you across other apps.


Apple’s own advertising offerings — Search Ads — have indeed grown significantly post-ATT, but that’s not proof of self-serving.


In this new world where around three out of every four iOS users ask not to be tracked, non-tracking ad platforms benefit — including Apple’s own Search Ads.

This whole discussion is muddied by Apple’s self-serving definition of tracking. Search Ads does use App Transaction Data:

This includes historical information about users’ transactions on the App Store, including apps they’ve downloaded and in-app purchases they’ve made.

This is not considered tracking because Apple defined it to not be tracking. And Apple doesn’t even ask the customer to opt in. But if another company wants to target ads based on app purchases, that does count as tracking. This is because the purchase would have to be detected by a third-party app. The reason Apple doesn’t track you across other apps is because it doesn’t need to—it owns the store so it just gets the data directly from there. It even gets information about purchases that happen within the app because it requires that apps use its In-App Purchase system.

Nick Heer:

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.

For example, a hypothetical third-party app store would get all of the same information that Apple does without it counting as tracking. This is why the definition is so ridiculous. Imagine a third-party app store run by Facebook or Google or an app ad company. By Apple’s definition, that would all be cool because the information gathered from those sites stays within the same company. But the people that like ATT would not be OK with that. Obviously, it’s not more private if Facebook is processing the actual transaction rather than just being aware it.

This thought experiment shows that the ATT definition doesn’t get at the real issue, which is that people don’t like those companies having so much data. But there’s little questioning of the principles behind ATT because it seems to be targeting the right corporate victims.

(It’s also arguably hurting developers—who have more difficulty finding customers—and customers—who in theory don’t find as many apps that they’re interested in and also get the developers’ increased acquisition costs passed on to them—but it’s hard to measure these effects.)

In other marketplaces, a definition like ATT’s wouldn’t do much because any company selling both ads and apps/services would already have the necessary data without having to “track.” The reason ATT “works” is that Apple has a monopoly on app distribution, so no one else gets data by default. Apple’s privileged position means that the effects of ATT will be asymmetric—Apple will benefit and its competitors will be harmed.

Of course, you can look at this whole situation and see it as a good thing for customers, on balance. In theory, it is good for their privacy, though in practice my understanding is that Facebook really cares more about customer segments than individuals. It’s just that they need the individuals’ data in order to derive the segments data. You can also say that Apple has pure motives, and I think they largely do. They’ve created an interlocking that benefits them, but I think they would still do ATT even if for some reason they couldn’t do search ads. But is what’s in the hearts of Apple’s decision makers what determines whether the policy is self-serving? Or is it the policy’s effects, which I think it is hard to argue are not anti-competitive?

Florian Mueller:

This leads to the second unique aspect of the German FCO investigation (the first one was the gatekeeper statute): that country is known for a very strong data privacy movement.

When the French Adlc declined to order interim measures against Apple, it was too early to demonstrate Apple’s self-preferencing. That’s not an issue now, and the German FCO has raised the issue. We may see some really interesting Franco-German dynamics in this context.


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Librarian Scott

Does the 5,000 people meeting the target criteria that Apple uses make it different from the other data brokers? [1]


Everything Apple is doing is to protect its own interests, not those of its customers. See their hard work at stopping right to repair bills. Googel Appleā€™s Cement Overshoes
for a nice rudown.

Privacy is hard to get, it comes after law requirements not before.
Holding data e using data are two different things.
A company is oblige by law to keep track of all the transactions it has with a customer, so holding store transactions data is not a privacy violation is a must.
Apple asks users if they want personalised ads based on previous purchases so also using the data per advertising is not a violation of privacy since it has consent.
Apple doesn't ask nor has permission to sell transactions data to third parties so it does not do it, here too there is no violation of privacy.

Hard to tell if the Grubester missed that slow curve or if he thought that no one would notice.

There is no defence of data collection without meaningful consent, on any theory. Of course Apple are self-interested, and it pains (but doesn't at all surprise, sadly) me to see so much specious rationalisation for it.

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