Since 2022, Germany’s anti-monopoly authority has been scrutinizing Apple’s privacy regulations for apps. On Thursday, the Bundeskartellamt (FCO) revealed initial findings from its investigation, indicating that Apple may be failing to treat third-party app developers in accordance with legal standards.
The FCO expressed concerns that Apple’s actions could be classified as self-preferencing. Since April 2023, Apple has been prohibited from favoring its own services and products in Germany, following the implementation of specific abuse regulations to oversee the market power of large technology companies.
In alignment with the broader Pan-EU Digital Markets Act (DMA), Apple is also restricted from self-preferencing within its iOS platform and several other essential services, including the App Store.
The current investigation centers on Apple’s App Tracking Transparency (ATT) framework, which enables iOS users to prevent third-party applications from tracking their usage for advertising purposes.
The FCO’s primary concern is the disparity in how Apple manages tracking permissions between third-party applications and its own tracking of iOS users.
According to the FCO, “The stringent requirements under the ATT framework apply only to third-party app providers, not to Apple itself,” as stated in a press release. “In the FCO’s initial assessment, this could infringe on the special abuse control regulations for major digital companies (Section 19a(2) of the German Competition Act (GWB)) and the general abuse control provisions outlined in Article 102 TFEU [Treaty on the Functioning of the European Union].”
The FCO further noted that “the consent dialogues for Apple’s own applications and those for third-party applications differ significantly.” It indicated that the phrasing and design of the dialogue for Apple’s apps are structured in a way that is more likely to garner user consent compared to the ATT dialogues for third-party apps.
The FCO has identified three specific issues with the framework that raise competitive concerns.
Firstly, while Apple defines tracking solely in terms of cross-company data processing for advertising, the same stringent ATT regulations do not encompass Apple’s own use of combined user data across its ecosystem—spanning the App Store, Apple ID, and connected devices—for advertising aims.
Secondly, the watchdog points out that users of third-party apps may encounter up to four consecutive consent dialogues under ATT, whereas Apple apps present a maximum of two. Moreover, dialogues associated with Apple’s apps do not mention “Apple’s own processing of user data across services (known as first-party tracking),” according to the FCO’s analysis.
Finally, the FCO believes that the configuration of tracking consent dialogues on iOS is biased. The watchdog asserts that Apple’s dialogues are designed to persuade users to permit data processing, whereas those for third-party applications lead users towards denying consent.
In a statement, Andreas Mundt, President of the FCO, remarked, “Apple manages a vast digital ecosystem that grants it significant access to user data critical for advertising. Personalized advertising holds substantial commercial interest for other firms that wish to provide free apps, many of which compete with Apple’s own services in the App Store. However, the ATT framework considerably hampers competing app developers from obtaining the user data necessary for advertising.”
Apple representative Tom Parker responded via email, defending the company’s practices: “App Tracking Transparency offers users greater control over their privacy by providing a clear and straightforward prompt regarding tracking. This prompt is uniform across all developers, including Apple, and has garnered strong support from consumers, privacy advocates, and data protection authorities globally.”
“We strongly believe that users should determine when and with whom their data is shared, and we will continue to engage constructively with the Federal Cartel Office to ensure users maintain transparency and control over their data,” Apple stated.
The tech giant now has the chance to respond to the FCO’s findings.
Developers have frequently voiced concerns over what they perceive as Apple’s double standards regarding its own applications and services compared to third-party developers. Additionally, Apple’s practices regarding third parties are under examination by the DMA, with the European Commission having issued a preliminary breach finding last summer concerning its App Store operations.
It’s significant to note that Apple is contesting the FCO’s designation, aiming to revoke the watchdog’s power to exercise special abuse authority. The outcome of this appeal awaits a court ruling scheduled for March 18, 2025.
Meanwhile, the special powers remain applicable to Apple, and the FCO’s actions highlight the ongoing scrutiny facing Apple and a select group of other designated tech giants amid significant competitive interventions across Europe.
Compiled by Techarena.au.
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