Hardly a week goes by when Apple is not subject to a new antitrust scrutiny or penalty in one jurisdiction or the other. In keeping with this fairly predictable pattern, the Cupertino giant has just been penalized with a hefty fine by Italy’s AGCM for distorting competition with its App Tracking Transparency (ATT) rules.
Italy’s AGCM: Apple’s App Tracking Transparency (ATT) rules are “restrictive” in nature and “unilateral”
Under the ATT framework, Apple attaches an anonymized identifier – bereft of personal details – to each device. Third-party app developers can then seek consent from users to track their activity using this identifier.
Now, Italy’s competition authority, the AUTORITÀ GARANTE DELLA CONCORRENZA E DEL MERCATO (AGCM), has concluded a “complex investigation in coordination with the European Commission, other national competition authorities and the Italian Data Protection Authority,” finding that Apple’s App Tracking Transparency (ATT) rules are “disproportionate,” and “harmful” to app developers and advertisers, owing to their “excessively burdensome” nature.
The AGCM took particular umbrage with the double prompt issue, where iPhone and iPad users in the EU are made to consent to both the ATT- and GDPR-related prompts. The authority noted that Apple could have designed its ATT prompts in such a manner so as to preclude “the unilateral imposition of additional burdens on third-party developers.”
The AGCM also pointed out that Apple’s own apps were exempt from the explicit consent requirement under its ATT rules, which could incur financial benefits for the Cupertino giant. Of course, Apple has repeatedly stated that it does not misuse the anonymized device identifier to display personalized ads on its bespoke apps and platforms.
As such, the AGCM has now imposed a fine of 98.6 million euros ($116 million) on Apple. For its part, Apple has vowed to appeal this decision.
Meanwhile, as we noted recently, Poland’s anti-monopoly watchdog, the UOKiK, has also initiated a formal investigation against Apple for supposedly subverting its own ATT rules to deliver personalized ads on its bespoke platforms, including the App Store.
The Polish antitrust watchdog contends that if Apple’s bespoke apps and platforms, including the App Store, are not subject to the ATT framework, the Cupertino giant can theoretically use the anonymized identifier to display personalized ads to users, that too without the hassle of seeking outright consent. Do note that the German and Romanian authorities are also looking into the potential for abuse with Apple’s ATT rules.
Apple’s other antitrust headaches in the EU
Apple was recently classified as a “gatekeeper” for surpassing the minimum user thresholds delineated within the EU’s Digital Markets Act (DMA) and for retaining a monopoly over its App Store.
Do note that the EU’s “gatekeeper” designation applies to entities that possess enough market dominance and heft to block competition.
The designation requires an expansive qualifying criteria:
- A market capitalization of 75 billion euros ($79 billion) or EU-derived revenues of at least 7.5 billion euros in each of the last 3 business years.
- 45 million monthly active end users and over 10,000 yearly active business users in the last financial year.
- The candidate entity fulfilled the second criterion in each of the last 3 financial years.
The EU has also bestowed a gatekeeper status on Apple’s iOS and iPadOS. Under the ensuing remedies, the EU has forced Apple to allow third-party app stores on its devices.
Also, under concerted pressure, Apple modified the terms for app developers in the EU in March 2024, allowing those who enrolled in the modified program to pay a lower percentage of their overall app-derived revenue to Apple.
What’s more, as per DMA rules, an entity must inform the EU as soon as it meets the qualifying criteria for a “gatekeeper” designation. Accordingly, as per a recent report from Reuters, Apple has informed the EU that its Maps and Ads services have hit the required threshold for a formal determination.
The EU now has 45 days to decide whether to impose additional antitrust remedial measures on these two services. If the designation status is approved, Apple will have 6 months to take appropriate antitrust remedial measures.
Apple is also on the hook for hundreds of millions of dollars in an ongoing antitrust case in a Dutch court, where two Dutch consumer foundations – Right to Consumer Justice and App Store Claims – have accused the tech giant of abusing its dominant position to charge third-party app developers excessive fees, to the tune of 30 percent.
Switzerland, which is not part of the EU, has also opened an antitrust investigation against Apple Pay via its Secretariat of the Swiss Competition Commission. The preliminary investigation is seeking answers to the following questions:
- Whether “other providers of mobile payment apps can effectively compete with Apple Pay for contactless payments with iOS devices in shops.”
- “Whether the terms and conditions for granting access – which differ from those applicable in the EEA – comply with Swiss antitrust law.”
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