Apple was hit with a $115 million fine Monday after Italy’s competition authority alleged the tech giant was abusing its dominant position to harm third-party developers in its App Store.
In a press release, the Italian Competition Authority said that an “App Tracking Transparency” (ATT) privacy policy that Apple introduced in 2021 forced third-party developers to seek consent twice for the same data collection.
Requiring such “double consent” was “extremely burdensome” and “harmful” to some developers—especially the smallest developers, the regulator said. Many developers struggled to earn ad revenue after the policy was introduced, as users increasingly declined to opt into personalized ads.
Meanwhile, Apple may have benefited from the ATT restricting developers’ ad revenues, either “in the form of higher commissions collected from developers through the App Store and, indirectly, in terms of the growth of its own advertising service.” Since ATT was adopted, “revenues from App Store services increased,” the regulator said, as developers paid higher commissions and “likewise, Apple’s advertising division, which is not subject to the same stringent rules, ultimately benefited from increased revenues and higher volumes of intermediated ads.”
Without intervention, Apple would continue requiring third-party developers to provide an additional consent screen, which was “found to be disproportionate to the achievement of the company’s stated data protection objectives,” the press release said.
“Apple should have ensured the same level of privacy protection for users by allowing developers to obtain consent to profiling in a single step,” the regulator concluded.
The Italian Competition Authority emphasized that it takes no issue with Apple introducing safeguards that go “beyond what is strictly necessary” to protect “user privacy within the iOS system.” But in this case, it appeared that Apple was not only “capable” of abusing its dominant position as an app distributor to harm “developers whose business model relies on the sale of advertising space, as well as advertisers and advertising intermediation platforms.” It also seemed to be actively harming markets, with the threat continuing as long as the 2021 policy remained “ongoing.”
“Although the fact that the conduct may harm competition is in itself sufficient to establish the Abuse,” the regulator noted, “the investigation found that the conduct did indeed produce effects, in terms of reduced revenues for developers and advertising platforms and increased costs for advertisers.”
Responding to the fine, Apple sent a statement to Ars, confirming that the company plans to appeal and defending ATT as offering iOS users critical privacy protections.
“At Apple, we believe privacy is a fundamental human right, and we created App Tracking Transparency to give users a simple way to control whether companies can track their activity across other apps and websites,” Apple said. “These rules apply equally to all developers, including Apple, and have been embraced by our customers and praised by privacy advocates and data protection authorities around the world, including the Garante. We strongly disagree with the ICA’s decision, which disregards the important privacy protections ATT provides in favor of ad tech companies and data brokers who want unfettered access to users’ personal data. We will continue to defend strong privacy protections for our users as we appeal.”
Uber and Lyft to test Baidu robotaxis in London next year, joining Waymo