UPDATED 21:03 EDT / MAY 11 2023

POLICY

Italy’s antitrust watchdog begins probe into Apple’s app market dominance

Italy’s antitrust watchdog announced today that it has launched an investigation into Apple Inc. for what it believes could be the iPhone maker’s abuse of its dominant position in the app market, a probe that follows similar European antitrust probes into American big tech.

The watchdog, Italy’s Autorità Garante della Concorrenza e del Mercato, or AGCM, said in a press release that Apple may have created an unfair advantage for itself by applying a strict privacy policy for third-party app developers regarding the tracking of iOS users. Such apps must agree to permit pop-ups for their ads. Apple, it went on, is not subject to the same requirements regarding its own ads.

The new rules were applied about two years when Apple introduced its App Tracking Transparency, or ATT, policy. It soon led to an outcry from numerous companies whose revenue was severely affected. Meta Platforms Inc., then Facebook Inc., spearheaded the outrage since it relied heavily on targeted advertising. Over time, Meta said it lost about $10 billion in revenue as a result.

“Starting from April 2021, Apple has adopted a privacy policy, for third-party app developers only, more restrictive than the one the company applies to itself,” explained the AGCM. “The different treatment is mainly based on the characteristics of the prompt that appears to users to acquire consent to the tracking of their ‘navigation’ data on the web and on the tools adopted to measure the effectiveness of advertising campaigns.”

The watchdog explained that Apple disadvantages third-party apps by making the “quality and detail” of their advertising campaign data less useful than the system Apple uses for its own ad campaigns. It said third-party developers must use the SkadNetwork interface to understand the effectiveness of their ads, while Apple’s own system, Apple Ads Attribution, is claimed to be a better system. Former Meta Chief Operating Officer Sheryl Sandberg said just that in 2021, explaining that ATT had made measuring outcomes of advertising campaigns “more difficult.”

“Apple’s alleged discriminatory conduct may cause a drop in advertising revenue from third-party advertisers to the benefit of its commercial division,” said the AGCM, which could be music to the ears of Meta and many more companies. This follows a probe into Apple’s alleged anticompetitive behavior by the U.K.’s Competition and Markets Authority. The antitrust watchdogs of Germany and Poland have also been snapping at Apple’s heels in regard to abusing its position in the app market.

In a statement, Apple said it will “engage constructively” with the Italian watchdog. The company added that the same rules “apply equally to all developers.”

Photo: Alexander Schimmeck/Unsplash

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