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New Delhi: Italy’s competition watchdog has fined Apple €98.6 million in relation to the implementation of its App Tracking Transparency (ATT) feature, another significant regulation loss to the iPhone manufacturer in Europe. The Italian Competition Authority (AGCM) alleged that Apple misused its dominance in the market through the implementation of regulations that complicated the lives of the app developers and advertisers despite the company presenting the act as a privacy upgrade.
The ruling applies to such changes made by Apple, which launched iOS 14.5 in April 2021, and now apps must obtain explicit user consent before tracking the activity of other apps and websites. Though the regulator recognised the intention of Apple to enhance the privacy of users, it decided that the design and effect of ATT were excessive and were unjustified to disturb market competition in digital advertising.
The core of the judgement includes the fact that Apple forces apps to include a system-level pop-up enquiring of users whether they should permit tracking or not. By choosing the option of Ask App Not to Track, developers will not have access to an advertising identifier on Apple, which is one of the main tools to customise ads and earn money.
This framework, AGCM reported, put third-party developers under a disadvantage, especially those that use advertising to make apps free or affordable. The authority states that the privacy safeguards would have been attained by Apple by making less restrictive measures that did not manipulate the market.
Another issue identified by Italian regulators was a matter of the so-called “double consent”. In the regulation, there is already a requirement for apps to ask users to process their data under the General Data Protection Regulation (GDPR). The ATT prompt adopted by Apple is an additional consent grant, but the AGCM reported that it introduces an unnecessary friction and further diminishes the capacity of developers to finance their services via adverts.
The regulator claimed that this additional move places the competitive issue on the side of Apple, as third-party advertisements become less productive, and the domination of Apple in its ecosystem becomes even greater.
ATT officially extends to Apple apps themselves, but the services of the company do not have tracking prompts. According to Apple, that is the reason that it does not follow users on third-party applications and websites. Nevertheless, this arrangement would still indirectly favour Apple, the AGCM said, because it would direct the flow of advertisers and developers to its tools and services.
The powers determined that this relationship poses a threat of strengthening the monopoly of Apple instead of a balanced field.
Apple has indicated that it will use an appeal over the fine. The company asserts that App Tracking Transparency will provide users with clear and meaningful control over their data and a significant milestone on privacy.
The decision is timed when Apple is under increasing scrutiny by regulators in Europe. In January this year, the company cautioned that the pressure exerted by national authorities and the European Commission may ultimately compel it to pull ATT out of the EU, casting new doubts on privacy-orientated features to be maintained under the competition regulations in Europe.
