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Apple’s App Tracking Transparency – selfless or selfish?

51Degrees

5/6/2021 5:00 PM

Apple Privacy iOS Opinion

The release of ATT in iOS 14.5 has caused a stir in the industry

In case you haven’t heard, Apple hosted an event on 20 April 2021, where they announced some pretty big changes within iOS 14.5. Seeing as we dabble in the realm of privacy, it’s only natural for us to want to dissect the event further. Let’s focus specifically on Apple’s App Tracking Transparency feature.

App Tracking Transparency

Apple announced the release of iOS 14.5, and along with it comes a host of new features. One of the most anticipated, yet controversial features is App Tracking Transparency (ATT). This feature allows users to turn off ad tracking within the apps they use. Unless you give explicit permission to an app, it can't use your data for targeted ads.

Apple’s new tool is designed to give users more transparency and control over the apps that want to track them. Sometimes, this type of feature can be difficult to find, but in this case, it’s easy to adjust your ATT settings. All you need to do is go to Settings > Privacy > Tracking.

settings
How to adjust your ATT settings.

While this feature was supposed to be enabled by default in iOS 14.5, there were reports that not every user could update their preferences as the option was disabled. It seems that Apple have since clarified this issue.

Many apps use the data collected from tracking to inform targeted advertising. Often, these apps may send data to third-party vendors, including Facebook and Google.

It’s important to clarify that with ATT, you will still get the same number of adverts. They simply will not be personalized to you.

This has got Facebook worried that the changes will hit their $80bn-a-year business model, which is built upon advertising. They began warning businesses who use their platform that they may be negatively affected by the changes if they don’t take immediate action.

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What’s in it for Apple?

Apple has long made privacy a key selling point of the iPhone to further its premium position in the market. However, there is a second side to every coin - the major reason for these changes is not only about privacy.

Previously, apps could sell the data they collected to third parties. However, the new iOS update means this can no longer happen. Apple has been accused of abusing their market power by excluding competitors - all while collecting large amounts of user data themselves. These changes to the competition may lead to apps beginning to charge consumers to improve their revenue.

It was also announced a few days ago that Apple have increased their own revenue opportunities by adding a second paid advertising slot to the app store.

Considering Apple takes a 15-30% commission on all app purchases and subscriptions made through the app store, can the implementation of ATT be truly altruistic?

It's also interesting to note that Apple made $10billion in 2020 from selling data on their users to Google. Can they really preach privacy when they earn 17.4% of their net annual income from Google?

Metric Amount
Data sales by Apple to Google $8-12billion
Apple net income - 2020 $57.4billion
Google payment as % of net annual income 17.4%

Source: Apple Consolidated Financial Statement FY2020

It seems that Apple is the only beneficiary of the change. And for now, this only affects iPhone users. But we can expect Google’s operating system to follow suit in some form. As Google is in the process of building 'privacy-first' advertising for desktop, similar changes for mobile apps may be on the horizon…