Thursday, August 11, 2022 [Tweets] [Favorites]

French Publishers Make App Store Antitrust Complaint

Florian Mueller:

Well-hidden in a new 90-page U.S. antitrust complaint against Apple (even 251 pages with the exhibits (PDF)), filed on Monday in the Northern District of California, is a challenge to one of the most devious and ruthless schemes Cupertino has ever devised: App Tracking Transparency (ATT).

[…]

At first sight, Société du Figaro et al. v. Apple is just an extension of other U.S. class actions that app developers have previously brought against Apple in the Northern District of California over the 30% app tax. One might be led to think that the only difference is that previous cases--which merely led to a sham settlement the only major beneficiaries of which were Apple and both sides’ lawyers--pursued claims on behalf of U.S.-based app developers, and the Figaro case is now seeking redress on behalf of French legal entities under U.S. federal and California state law because the App Store is a global operation.

[…]

The term I just emphasized--“other policies”--does, however, include ATT. The prayers for relief include a request for “injunctive relief requiring that Apple cease the abusive, unlawful, and anticompetitive practices described [t]herein.”

Ben Thompson:

Apple doesn’t particularly care about or claim ownership of the content of an app on the iPhone, but:

  • Apple insists that every app on the iPhone use its payment system for digital content
  • Apple treats all transactions made through its payment system as Apple data
  • Ergo, all transactions for digital content on the iPhone are Apple data

The end result looks something like this — i.e. strikingly similar to Facebook, but with App Store payments attached[…]

Here’s the key point: when it comes to digital advertising, particularly for the games that make up the vast majority of the app advertising industry, transaction data is all that matters. All of the data that any platform collects, whether that be Meta, Snap, Google, etc. is insignificant compared to whether or not a specific ad led to a specific purchase, not just in direct response to said ad, but also over the lifetime of the consumer’s usage of said app. That is the data that Apple cut off with ATT (by barring developers from linking it to their ad spend), and it is the same data that Apple has declared is their own first party data, and thus not subject to its ban on “tracking.”

Nick Heer:

The actual figures tell a much murkier story. I do not think it is fair to suggest ATT does nothing, but its effect does not seem as pronounced as either its biggest supporters or its biggest naysayers suggest.

[…]

If ATT were so significantly kneecapping revenue, I would think we would see a pronounced skew against North America compared to elsewhere. But that is not the case.

[…]

Perhaps the most favourable evidence for ATT’s effects lies in the earnings reports from Publicis Groupe, which has acquired dozens of name-brand agencies — like Leo Burnett and Saatchi & Saatchi — and also runs a digital ad platform.

[…]

In theory, ATT is a very good option for users. Its biggest problem is that the company which makes it also has an advertising division, and it appears to have engaged in some quiet self-preferencing behaviours. Legal questions aside, it is disappointing to see such an obvious user benefit so easily undermined. These App Store ads give ATT’s critics a clear conflict of interest to point to, look tacky, and create an unpleasant experience. ATT’s reliance on a very specific definition of “tracking” that allows Apple to segment users based on what they read in News and what they buy in third-party apps is far more permissive than I think it ought to be for a company that so loudly trumpets its privacy bonafides.

Nick Heer:

Meta said, quarter after quarter following ATT’s release, that its ability to make money from iPhone users would be crushed, even as it raked in higher ad sales. Finally, earlier this year, it posted some disappointing figures more reflective of inflation and a strong U.S. dollar. But it still blamed Apple for some of that loss.

Previously:

Update (2022-08-12): John Gruber:

In my spitball theory here — which I think Heer shares — App Tracking Transparency is not the cause of Facebook’s troubles, but just an extra kick in the pants as they stumble downhill toward legacy media irrelevance — a decline that was in the making years before “Ask App Not to Track” was in our vernacular.

Patrick McGee:

Basic answer: the apparent lag was one of perception.

When Apple introduced sweeping ‘do not track’ changes 16 months ago, the economy was booming. Covid had caused spending habits to experience a once-in-a-century shift away from services and towards goods.

Nick Heer:

This is the most convincing argument I have seen for the discrepancy between the booming financials of ad tech firms in the face of App Tracking Transparency which should, some analysts say, have destroyed much of their business. What it does not necessarily explain is the often better performance some of these companies saw in areas where the iPhone has a stronger market presence.

Update (2022-09-09): John Gruber:

The two paragraphs above encapsulate a lot of the skepticism I expressed yesterday regarding the economic profoundness of ATT. I think only a fool would argue that ATT has had no effect on the surveillance advertising business. But I think the other extreme — the argument that everything we’re seeing in the financials for Facebook, Snap, Twitter, and YouTube is attributable largely, let alone solely, to Apple’s App Tracking Transparency rollout last year — is nearly as foolish. I think ATT is being scapegoated, and is, at best, one significant factor among many.

Nick Heer:

On Meta, I think the amount of blame to ascribe to ATT remains murky. The amount of noise created by TikTok’s rapid ascendancy and its ability to take younger users and, therefore, ad dollars away from Meta is an astonishing coup. Is ATT really the thing holding back the growth rate of platforms like Facebook and Instagram, or is it more likely that big advertising dollars are following users’ eyeballs?

1 Comment

Under the digital markets act in EU, Apple will have to share that ad data.

I wonder how much money is flowing from apples coffers to European lobbyists at the moment.

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