French antitrust complaint alleges Apple allows itself to run personalized ads on iOS without getting user consent

With the release of iOS 14.5, Apple’s new App Tracking Transparency policies require developers to get explicit consent before being able to share user data with third-party advertising networks. A new French complaint alleges that Apple’s own advertising network is not held to the same standard, as first reported by Bloomberg.

Specifically, the complaint says Apple itself is allowed to use data from across Apple’s apps to serve targeted ads, by default. Apple’s system does not technically fall under App Tracking Transparency (ATT) rules because there is no third-party data sharing, but it is viewed by the complainants as unfair treatment nonetheless.

The essence of the complaint argues that if Apple truly cares about privacy, it should be up-front and transparent about its own ad policies just as much as it enforces App Store ad networks to do the same. However, the Personalized Ads system setting for Apple Advertising is enabled by default, and this fact is not clearly disclosed to users.

This can be interpreted as Apple giving its own ad network an unfair advantage, with lower barriers to entry for collecting user data that can then be aggregated to deliver higher-value ad campaigns.

Users are “insufficiently informed about the use and the processing of its personal data,” the association wrote in the complaint to the French regulator CNIL, which was obtained by Bloomberg News.

“Apple keeps the right to choose who is a “partner” and who is a “third party” in an arbitrary manner, a quality which may change over time, without the user being informed of such a change.”

For its part, Apple says that its personalized ads are designed to be privacy preserving and its generated user demographics cannot identify individuals.

Apple personalized ads defaulting to enabled is also the subject of a separate complaint, which believes the on-by-default policy is in breach of GDPR.

As far as ATT is concerned, a group of apps from the same developer is allowed to share data between them. ATT dialogs are required only if the developer then wants to send that data off to a third party, such as an ad network. For instance, Facebook is allowed to share user data among Messenger, Instagram, and the Facebook app without requiring user permission. In Apple’s case, it is both the developer of the apps and the ad network provider.

But smaller developers do not have the resources to run their own advertising platforms and have to rely on third-party ad networks for monetization. This is where the ATT dialogs will be required. These ad networks are worried many users will not allow ad tracking when asked, which could then damage the amount of revenue they can generate.

The frustrated complainants would like Apple to treat its ad network as a “third-party,” so it is subject to the same rules as the smaller players.

This is just the latest in a long line of lawsuits and legal battles in the wake of the App Tracking Transparency rules being announced. ATT will go into effect sometime in the next few months, likely alongside the public release of iOS 14.5. While the forthcoming changes are undoubtedly better for user privacy and awareness, the business impacts remain unclear.

Some fear it will further cement Apple’s monopoly power. Facebook CEO Mark Zuckerberg has said that Apple has an “incentive to interfere” with its business. In general, advertising providers are panicking that they will no longer be able to make the same amount of revenue with the expectation that many users will not agree to personalization and data sharing, when explicitly asked.