Apple’s new privacy feature backed by French competition watchdog

France’s competition authority has handed Apple a big win — for now. 

The watchdog said Wednesday that the iPhone maker can proceed with the rollout of a new privacy feature, despite opposition from the French online advertising ecosystem. But the regulator, the Autorité de la concurrence, will keep investigating to assess whether the U.S. tech giant is favoring its own services at the detriment of its rivals.

“For us to intervene, there must be an anti-competitive practice, and in this instance, we considered it wasn’t proven,” Isabelle de Silva, head of the competition authority, told reporters.

At the heart of the issue is Apple’s App Tracking Transparency, the new privacy feature the company plans to roll out in the spring when it updates its operating system iOS 14. The feature would ask users for consent to be tracked online for targeted-ad purposes, via a pop-up.

The French case shows the increasing intricacies between privacy and competition on both sides of the Atlantic. In the U.S., state antitrust prosecutors said this week that Google’s plan to remove advertisers’ ability to track users across the web in its Chrome browser will entrench the search giant’s power over the ad buying market.

De Silva’s comments on Wednesday also show that Apple’s privacy push, described by rivals as a mere communications stunt that does not reflect reality, is supported by regulators, including the data protection authority CNIL.

In October 2020, four leading organizations from the French online advertising ecosystem, including the French branch of the Interactive Advertising Bureau (IAB France) and Mobile Marketing Association France (MMAF), filed a complaint against the U.S. tech giant with the competition authority. 

They asked the regulator to freeze the new feature’s rollout to leave time for negotiations, arguing that the feature is anti-competitive because Apple itself collects users’ consent by default to engage in targeted advertising. Describing the tech company as a gatekeeper, they also said that Apple’s unilateral decision to roll out this feature is an abuse of its dominant position.

In Wednesday’s decision, the competition authority sided with Apple in the short term. “At the stage of interim measures, we haven’t found any clear evidence of such discrimination,” de Silva said. However, the watchdog will continue investigating to assess whether the new privacy feature amounts to self-preferencing.

“While the associations are disappointed that the [competition authority] rejected their request for interim measures, they are pleased that the [competition authority] will pursue an in-depth investigation of Apple’s conduct, which disrupts competition in the mobile advertising ecosystem,” said the four organizations who filed the complaint.

‘Privacy champion’

In the past few years, Apple has branded itself as a privacy champion, leading to a public feud with fellow Silicon Valley giant Facebook, which relies heavily on personal data for revenues. The social media giant argued that Apple’s privacy changes will prompt app developers to move to subscription-based models that are subjected to a commission paid to the iPhone maker.

“The truth is, these moves are part of Apple’s strategy to expand their fees and services business,” Facebook wrote in December. 

Last week, startup lobby France Digitale filed a complaint against Apple with the CNIL arguing that the company does not respect data protection rules. If the CNIL finds that the U.S. tech giant does collect consent illegally, that could help the advertisers’ case in the longer run by potentially proving the company does favor its own products over others’.

For now however, the competition authority seems convinced by the company’s privacy moves. “Apple presents itself as a privacy champion, and de facto has taken a certain number of measures to protect privacy of its users, at least more than other actors,” said de Silva. 

The regulator noted that Apple’s App Tracking Transparency tool was another step in the company’s recent privacy push — as third-party tracking was already limited on its web browser Safari. The watchdog also said that the iPhone maker’s move “does not appear to lack necessity, objectivity and proportionality.” 

“We’re grateful to the French competition authority for recognizing that App Tracking Transparency in iOS 14 is in the best interest of French iOS users,” Apple said in a statement. “We look forward to further engagement with the [regulator] on this critical matter of user privacy and competition.”

More to come

The Autorité hasn’t frozen Apple’s privacy update, but that doesn’t mean the tech giant is out of trouble, as the investigation remains open, with a particular focus on the company’s alleged self-preferencing practices.

In Wednesday’s decision, the watchdog did not think the introduction of the new feature per se was anticompetitive. The tool is part of the “margin of appreciation of any company to determine its technical or commercial strategy,” the competition authority said.

This “room for maneuver also exists for … structuring platforms,” de Silva told journalists, referring to the French way of describing gatekeepers, the largest platforms targeted by the EU’s digital rulebook currently under discussion in Brussels, called the Digital Markets Act. 

The European Commission put forward the Digital Markets Act in December. Experts expect Apple, as well as Google, Amazon and Facebook, to fall into the new rules’ scope.

However, there is growing skepticism that the DMA could be the one-size-fits-all solution to all the issues in digital markets.

De Silva didn’t “necessarily [see] a link” between the practices forbidden as part of the DMA and the Apple case. “We cannot expect the DMA to solve all the competition issues” with the platforms, she said.

“The DMA, we’ll see what comes out of it,” Damien Géradin, a lawyer who represents the four online advertising groups in their stand-off against Apple, said ahead of the decision. “It’s going to be another two years at least [before the DMA text is voted on]. This is really the example where, in the meantime, competition authorities have a role to play,” he added.

Regarding users’ consent, the Autorité found no evidence in its preliminary investigation that Apple is “applying a more stringent treatment” to third-party apps than for itself when it collects consent. The investigation “will, however, ensure that this treatment does not constitute an anti-competitive practice,” according to the statement.

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