France hits out at Apple over data use for advertising

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France’s antitrust authority has issued a formal grievance against Apple, claiming the iPhone maker has abused its dominant market position to impose conditions on the use of personal data for advertising.

Apple’s practices are likely to have affected “several related markets for advertising services”, a statement on Tuesday from the French competition authority said.

The complaint is the first major governmental act against the US tech giant over its advertising rules. However, Germany, Italy and Poland have opened similar probes.

App Tracking Transparency, Apple’s privacy policy, was implemented in April 2021. It compels developers to ask for user permission if they plan on “tracking” their movements from app to app, a common tactic to build a user’s digital profile and target them with personalised ads.

Such “tracking” techniques rely on capturing the user’s “identifier for advertisers”, or IDFA, a string of digits comparable to a social security number. Apple announced the move in 2020, prompting claims in the $400bn digital ad industry that it was an “IDFA apocalypse”. Facebook for example estimated it had lost as much as $10bn in annual revenue in 2022 on the back of that.

France’s competition authorities, which will open an investigation on the grievance claims, labelled the rules “discriminatory” and “non-transparent”.

Apple on Tuesday disputed the allegations, saying it holds its own advertising business “to a higher standard of privacy than it requires of any other developer”.

The tech group’s ownership of the hardware, operating system and App Store, however, provides it with the mechanism to target its 1bn users in ways that are beyond its rivals. In October 2021, within six months of introducing the privacy changes, Apple’s fledgling advertising business tripled its market share.

Apple has described its ads business as “incredibly fast-growing”, while research group Evercore ISI has estimated the iPhone maker’s ads revenue will jump from $5bn in 2022 to $30bn by 2026.

In a statement, Apple defended its policies, saying that compelling developers to ask for permission before “tracking them” gave users more control.

“Apple, like all developers, is required to comply” with the policy, the company added. It acknowledged that none of the company’s apps use an ATT prompt but said this is because they do not rely on a user’s IDFA to build a profile of them.

Apple has sparked criticism because it can personalise adverts for users from its own “first-party” data, including downloaded music, books and films as well as in-app purchases and subscriptions. Other companies do not have access to that information and some claim Apple takes advantage of its position.

Apple said users have the option to turn off personalised ads, which 80 per cent have done.

“We have previously received strong support from regulators and privacy advocates” on the policy’s goal, Apple said. “We will continue to engage with the [French authorities] constructively to ensure users remain in control of their data.”