Why is Apple paying attention to regulatory agencies for 'ATT,' which made it difficult for third-party user tracking?
In Apple's iPhone and iPad, the advertisement identifier 'IDFA' is assigned to each device, and by using this, the application developer can display the advertisement according to the user's interests. However, Apple has introduced the privacy enhancement framework '
Data and Definitions – Stratechery by Ben Thompson
https://stratechery.com/2022/data-and-definitions/
'Brutal Battle' Expected as Regulators Close in on Apple Around the World --MacRumors
https://www.macrumors.com/2022/06/21/brutal-battle-expected-as-regulators-close-in/
The Federal Cartel Office of Germany has announced that 'Apple has begun reviewing tracking rules and ATTs under competition law.' The Federal Cartel Agency is concerned about ATT as a 'framework that prioritizes Apple itself or interferes with others.'
Federal Cartel Office Secretary Andreas Mundt welcomes a business model that allows users to operate their data carefully and choose how to use it. It unilaterally sets rules for the ecosystem, especially the app store. Companies like Apple that are in a position to be able to do so need to engage in rule-making that encourages competition. '
In addition, 'Apple's rules that apply to third-party developers may not apply to Apple itself, which allows Apple to prioritize its services and disrupt other companies' businesses. There are cases where it can be taken as if it were. ' This is because ATT will show users a notification to get permission to track data when using IDFA for third-party apps, while Apple's genuine app will do the same. He points out that it is anti-competitive to collect user data without doing so. In addition, the Federal Cartel Office states that German law requires all apps to seek user consent for data tracking, even in the absence of Apple's ATT.
The following is the 'Notification for obtaining permission for data tracking' when launching a third-party application that uses IDFA, which has become displayed due to the introduction of ATT.
However, regarding the announcement by the Federal Cartel Agency, John Gruber said, 'I think Apple's criticism of ATT came from a deep misunderstanding about how Apple indirectly benefits from ATT. Apple's privacy and tracking rules also apply to ATT itself, as Apple's genuine apps aren't exempt from ATT and Apple's own apps don't track users between other apps. I'm not displaying notifications. Apple's own app also has a privacy report card on the App Store, 'he said, criticizing some misguided points.
Gruber also said, 'You might want to argue that Apple plans to benefit its search advertising platform by introducing ATT, but if so, Apple will only engage in user tracking. Instead, it could have done more. The Federal Cartel Agency's view completely ignores the idea that targeted advertising is inherently unethical, and Apple has a large platform. I'm looking away from the fact that it's been built but proved to be very beneficial. '
Meanwhile, the Competition and Markets Authority (CMA), which oversees fair market competition in the United Kingdom, is also looking to ATT.
In June 2022, CMA announced that it plans to investigate Google and Apple, saying that 'Google and Apple occupy the mobile browser market.' CMA reports that after a year of research into the mobile ecosystem provided by Apple and Google, they have found that they are duopoly . CMA feared that if it did not immediately intervene in the mobile ecosystems of both companies, it would further strengthen market power and limit incentives for competition and market innovation.
'Apple and Google are anti-competitive in the mobile browser market,' UK regulators report-GIGAZINE
Apple's Chief Privacy Officer, Jane Horvat, appeared at the Data, Technology and Analystics Conference 2022, an annual conference hosted by CMA. In this, Mr. Horvat explained 'the importance of privacy' in the competition with other companies and 'how the pursuit of privacy is a cross-sectoral pursuit'. Horvat also mentions that privacy has been an important consideration since the development stage before the release of health apps and the Apple Watch, as well as ATT.
In response, Professor Damian Gerardin of the University of Tilburg, the Netherlands, mentioned the 'balance' and 'understanding' needed to enforce antitrust law. 'Apple tends to use words like'privacy'and'security' to justify the status quo and resist regulatory intervention when necessary,' he said, referring to market research published by CMA. Did. Professor Gerardin points out that while companies are 'correct' in their attempts to protect the quality of their platforms, they may exceed standards if there is a conflict of interest. 'It is the important role of the regulatory authority to distinguish between legitimate privacy and security claims and excuses or simply exaggerated claims,' said Professor Gerardin.
Professor Gerardin also said that regulators around the world, not just the CMA, are 'trying to enforce unprecedented new regulations' for tech companies, and as a result, between tech companies and regulators. He pointed out that the dispute would grow further. In addition, 'The proceedings between tech companies and regulatory agencies will not go smoothly. I saw the results of the research commissioned by the gatekeeper, which was really disappointing. Digital Markets Act ( DMA) will trigger the proceedings, and I think the accuracy of the Digital Markets Unit (DMU) will also trigger the proceedings, but in reality it will be a pretty cruel battle. In my expectation, the DMA App Regulations on the Store will be very difficult and there will be considerable resistance when it is introduced. '
As mentioned above, ATT has been watched by the Federal Cartel Agency and CMA as regulated, which is because some companies have significantly reduced their profits after the introduction of ATT, while others, including Apple. Is due to the significant increase in revenue.
After the introduction of ATT, Apple's rival advertising companies were reported to have reduced revenue across the board. In particular, Facebook's parent company, Meta, 'decreases annual sales by $ 10 billion,' said the Chief Financial Officer.
Apple's enhanced privacy turns out to reduce developer and advertiser revenue by 15-20%-GIGAZINE
However, Google and Amazon have recorded an increase in sales, and it is reported that Apple has more than tripled its market share six months after the introduction of ATT. These numbers aren't certain because they're estimates from app analysis, but 'Given Apple hasn't revealed the revenue of the advertising business, these numbers are the best we know. It should be, 'points analyst Ben Thompson.
The reason why Amazon and Google increased advertising revenue after introducing ATT is that each holds tracking data of users who use the platform, and by using this, it is excellent as before without depending on Apple's IDFA. This is because we were able to post a variety of targeting advertisements.
On the other hand, Apple's advertising and privacy rules state that 'data collected from genuine Apple apps' is 'linked to data collected by third-party apps and will not be used for targeted advertising.' We shouldn't have been able to launch the same targeted advertising as before. However, Thompson said, 'From another angle, it means that using the data that Apple collects independently for advertising is not tracking for Apple.'
In other words, by Apple's definition, data such as demographic information, download / purchase / subscription information, and browsing behavior in Apple's genuine app (Safari) that Apple collects is used for targeting advertisements on its own advertising platform. What you do is 'not applicable to targeting ads for Apple.'
In this way, Thompson points out that only platforms that were able to post conventional targeted advertising even after the introduction of ATT, which should have blocked targeted advertising, were able to increase profits.
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