German Regulator Investigates Apple's Opt-In Privacy Settings

The German competition regulator Bundeskartellamt has launched an investigation of Apple over a privacy setting that requires developers to obtain users' consent before tracking them across mobile apps.

Adreas Mundt, president of the agency, suggested this week that Apple's setting could enable the company to benefit itself while hindering others.

A corporation like Apple which is in a position to unilaterally set rules for its ecosystem, in particular for its app store, should make pro-competitive rules,” Mundt stated. “We have reason to doubt that this is the case when we see that Apple’s rules apply to third parties, but not to Apple itself. This would allow Apple to give preference to its own offers or impede other companies.”

The setting, which rolled out last year, only allows developers to access the “Identifier for Advertisers” -- alphanumeric strings, comparable to serial numbers -- after obtaining users' consent on an app-by-app basis.

Privacy advocates generally supported Apple's decision to roll out the so-called "App Tracking Transparency" setting, but the major ad industry groups argued the move could harm ad-supported businesses.

One critic, an attorney who works at a firm that represents Facebook, went so far as to ask Congress to prohibit Apple from deploying the new setting.

Responding to news of the German investigation, an Apple spokesperson said the company's rules apply “equally to all developers,” including itself.

But that's only because Apple doesn't consider its own ad-serving practices, which rely on first-party data, as equivalent to tracking by ad-tech companies. Apple's privacy policy allows the company to draw on users' App Store searchers, their activity in Apple News and Stocks, downloads and other data to classify users into marketing categories, and then serve people in those categories with targeted ads -- provided the category has at least 5,000 people.

Some outside researchers recently said those ad practices might come as a surprise to users, given Apple's attempts to position itself as privacy-friendly.

Germany isn't the only country to investigate Apple over its opt-in setting.

France's competition regulator also eyed Apple's opt-in approach at the request of advertisers and publishers, which wanted the French government to block the new privacy settings.

Last year, the French regulator declined to block the settings before they took effect, but said it would continue to investigate.

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