Bundeskartellamt Raises Concerns Over Apple's iPhone Tracking Protocol

The Bundeskartellamt, Germany's federal competition authority, has expressed significant concerns regarding Apple's App Tracking Transparency (ATT) framework. This system requires iOS applications to obtain user consent before tracking them for advertising purposes, a move that has sparked debates about its implications for competition.

Since its implementation in 2021, the ATT framework has compelled app developers to seek permission from users before engaging in cross-application tracking for marketing efforts. Many users, however, tend to decline these requests, limiting the ability of other advertisers to effectively target their audience. In 2022, the Bundeskartellamt had already indicated a preliminary suspicion that Apple might be infringing competition laws, and it has recently formalized these concerns in an official communication to Apple.

The core issue identified by the competition authority is that the stringent requirements of the ATT framework seem to apply exclusively to third-party app developers, while Apple itself benefits from a more lenient standard. According to the authority, this discrepancy could constitute a violation of the abuse provisions for large digital companies under German law, as well as the general abuse regulations outlined in EU law.

Andreas Mundt, the head of the Bundeskartellamt, emphasized that Apple operates a comprehensive digital ecosystem, including services, devices, the App Store, and the Apple ID, which grants it extensive access to valuable advertising data from its users. While Apple utilizes some of this data to generate substantial revenue through personalized ads in the App Store, competing companies lack access to the same depth of consumer data due to the restrictions imposed by the ATT framework.

The Bundeskartellamt has noted that the ATT framework only categorizes tracking by third-party applications as cross-company data processing for advertising purposes. In contrast, Apple's own practices of aggregating user data from its ecosystem--including the App Store, Apple ID, and connected devices--are not regarded in the same light. Users do have the option to disable personalized advertising through their settings, yet the process appears to be less user-friendly when compared to the actions required for third-party tracking.

Furthermore, the authority pointed out that Apple's consent requests under the ATT framework are more cumbersome than those for its own advertising initiatives. Users face as many as four consecutive prompts for consent regarding third-party apps, while Apple's own applications typically present a maximum of two prompts. The Bundeskartellamt believes that the current design of these consent requests may inadvertently encourage users to permit data processing by Apple while steering them towards rejecting similar requests from third-party developers.

As the investigation continues, Apple has been given the opportunity to respond to these allegations. The Bundeskartellamt has confirmed that it is collaborating closely with the European Commission and other national competition authorities, as multiple related investigations are underway across Europe.