French antitrust watchdog strikes Apple’s app tracking system

France’s Competition Authority suspects Apple of abusing a dominant market position and being non-transparent in how it tracks iOS users, according to a statement of objections sent to the company on Tuesday (25 July).

In 2020, French trade associations representing the media, internet advertising agencies, advertising agencies, technical intermediaries, publishers and mobile marketing agencies filed an antitrust complaint against the multinational technology company over its data privacy tool, App Tracking Transparency (ATT).

In the initial complaint, they asked the app be blocked over a feared breach of the EU’s antitrust rules, something the French watchdog rejected in March 2021.

But following a preliminary investigation, the French authority found that Apple, which is facing a similar probe in Germany, may have a case to answer after all.

On Tuesday, it issued a statement of objection against the likelihood of Apple’s operating system market practices having “effects on several related markets of advertising services and consumer services.”

The authority will now receive observations from both parties in order to rule if there was an abuse of power regarding ATT allowing an easy opt-out from third-party tracking while opting out from the iPhone maker’s own apps was much more complicated.

Currently, ATT mandates third-party apps to prompt iOS users to allow them to be tracked and for their data to be used for the purpose of ad targeting. Advertisers were quick to accuse Apple of not playing fair as with its native iOS apps, the same prompt was not automatically triggered.

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“We are currently witnessing an intertwining of competition law and data protection law,” attorney-at-law Christoph Callewaert told EURACTIV. 

Callewaert noted that in a landmark decision on 4 July, the Court of Justice of the European Union decided that “a national antitrust watchdog may find a violation of the GDPR as part of its assessment of abuse of a dominant position.”

In other words, competition authorities are now also empowered to consider data protection violations in their antitrust probes, given the important economic value data has in the digital economy.

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Back to the French case

The statement of objections is the first procedural step in antitrust investigations whereby the authority sets out a series of alleged violations that the investigated company can contest.

In 2021, the French competition watchdog decided, in coordination with the French regulatory authority for data protection (CNIL), not to mandate precautionary measures towards Apple’s ATT partly because it did not infringe the EU data protection and privacy rules.

However, the authority kept the case open over potential abuses of dominant position.

Callewaert notes that while the ATT does not per se breach EU privacy rules for third-party apps, the French antitrust watchdog could rule on a “violation of data protection by Apple regarding its own applications,” which could constitute “an abuse of dominant position.”

Apple fights back against German competition control regime

The German competition authority on Wednesday (April 5) added Apple to its ‘special watch’ list, joining the other Big Tech companies. However, the iPhone maker already announced it will legally challenge the decision.

Data privacy

Contacted by EURACTIV, an Apple spokesperson stated that “Apple holds its advertising business to a higher standard of privacy”, explaining that it received strong support from regulators, including from the French privacy watchdog.

Even so, Apple’s strategy to respect data privacy rules was tarnished in December 2022 when the French data privacy authority issued an €8 million fine to the company for not collecting “the consent of iPhone’s French users” before depositing ad identifiers on their terminals.

According to the French data regulator, the advertising settings were “pre-checked by default”, and users had “to perform a large number of actions in order to deactivate” the setting.

Similarly, the complainants argue that Apple introduced an opt-out mechanism for third-party advertisers but not for Apple’s own apps.

EU Commission halves charges against Apple in competition probe

The European Commission has issued a rare revision of its initial findings in a competition inquiry looking at Apple’s App Store practices, dropping half of the original charges. 

[Edited by Luca Bertuzzi/Benjamin Fox]

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