Italy’s Competition Authority (AGCM) has imposed a €98.6 million ($116 million) fine on Apple for its App Tracking Transparency (ATT) policy, which has been deemed to create unfair conditions for third-party app developers. The focus of this penalty stems from Apple’s policy that mandates app developers to display a consent prompt prior to tracking user data across different apps. According to the AGCM, this requirement, initiated in April 2021, breaches Article 102 of the Treaty on the Functioning of the European Union (TFEU) by creating an unnecessary “double consent” situation. Developers must show their consent prompts to comply with EU privacy regulations, notably the GDPR, leading to duplicated efforts.
The authority claimed that Apple’s policy abuses its dominant position in the market by imposing privacy rules that are deemed restrictive and imposed unilaterally. Although the AGCM does not question Apple’s intent to enhance privacy, it criticizes the methods employed for being overly burdensome. The Italian Data Protection Authority suggested that similar privacy security could have been achieved with less restrictive measures. As a consequence, AGCM labeled the practice as “exploitative abuse” since it caused a decline in advertising revenue for developers while Apple’s advertising division benefited under more lenient terms. Apple has been directed to cease its anticompetitive conduct and submit a compliance report within 90 days.
Apple’s legal challenges are not limited to Italy. The company faced a substantial €150 million ($162 million) fine from France earlier this year related to similar GDPR violations associated with the ATT policy. Concurrently, Apple is confronting legal challenges from X Corp. and X.AI LLC, which allege that the exclusive integration of ChatGPT violates competition laws. Furthermore, the European Union fined Apple €500 million ($588 million) for breaches of digital competition law earlier this year.
The ATT policy, while criticized, has its proponents. A working paper from the National Bureau of Economic Research suggested that the policy helped reduce financial fraud, demonstrating a correlation between an increase in consumers opting out of data tracking and a reduction in complaints to the Consumer Financial Protection Bureau. However, the latest decision from Italy highlights the balance Apple must strike between enhancing privacy and maintaining fair competition among app developers. More details on this development can be found here.