German Regulator Probes Apple Ad-Tracking Rules

Germany’s antitrust regulator has opened a probe into Apple’s ad-tracking rules for third-party mobile apps.

In question is whether the rules, which require users to consent to be tracked, give Apple’s own offerings preferential treatment or undermine rivals.

The investigation, opened by the Federal Cartel Office on Tuesday, said it was concerned whether the rules were “self-preferencing” and anti-competitive given that Apple could “unilaterally set rules for its ecosystem”.

The rules were implemented in an iOS update in April 2021 and force third-party apps to ask users for permission to implement tracking to serve personalised ads.

Revenue impact

The rules have had a significant impact on ad-dependent businesses, including the biggest internet companies.

In February shares in Facebook parent Meta plunged more than 20 percent on weaker-than-expected results, which it blamed in part on Apple’s privacy changes.

Shares in Snapchat maker Snap plunged on similar concerns last October.

In April a group of Germany’s largest media, tech and advertising companies and industry bodies representing Facebook and publishing giant Axel Springer filed a complaint about the privacy rules.

They predicted a 60 percent fall in advertising revenues for app developers.

The FCO said it was looking at whether and how Apple might be benefiting from the rule change.

‘Self-preferencing’

“All apps have to ask for their users’ consent to track their data,” the agency said in a statement “Apple’s rules now also make tracking conditional on the users’ consent to the use and combination of their data. These rules apparently do not affect Apple when using and combining user data from its own ecosystem.”

FCO head Andreas Mundt said the agency is investigating whether “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.”

The FCO said it was able to open the probe because of new regulations that came into force last year that allow it to ban companies that have particular market weight from carrying out practices that harm market competition.

The office has used the rules to open proceedings against Facebook, Amazon and Google.

Privacy rules

Apple said on Tuesday that the rules apply equally to all developers, including Apple. It added it had received support from regulators and privacy advocates for the changes.

“ATT (App Tracking Transparency) simply gives users the choice whether or not they want to allow apps to track them or share their information with data brokers. ATT does not prevent companies from advertising or restrict their use of the first-party data they obtain from users with their consent,” it said.

The company said it plans to continue to engage constructively with the FCO to address questions and “discuss how our approach promotes competition and choice, while protecting users’ privacy and security”.

The French competition regulator last year opened a probe into whether Apple was acting as a gatekeeper for third-part apps but concluded the company was not abusing its dominant position.

Last year RBC analyst Brad Erickson joined some other industry watchers in speculating that the privacy changes could be preparing the way for Apple to launch its own advertising platform in competition with Facebook and Google.