Interpretation Of Apple'S New Privacy Regulation 2: Its Own Advertising Business Has Benefited Greatly, And Many Countries' Anti-Monopoly Swords Have Been Cut Down One After Another

"In the apple ecosystem, apple is both a referee, a player and a lawmaker."

With the official release of Apple IOS 14.5 on April 27, the new privacy regulation of APP tracking transparency (ATT) was implemented.

It is difficult to obtain IDFA (device advertisement identifier). Only when users click "authorization permission" actively, can the application use IDFA for targeted advertising and attribution. The effect of advertising is limited and affects the 100 billion level advertising market.

The introduction of the new privacy regulations may make apple benefit from the advertising market in disguise: on the one hand, it will increase the business volume of its own Apple search ads; on the other hand, it will bring profits from "Apple tax".

Unlike being restricted by the new privacy rules, advertisers who buy Apple's ad space can receive more data about user behavior and get results almost in real time, according to people familiar with the matter.

As a result, apple, which holds high the banner of privacy protection, is accused of building a "walled garden" by opponents and uses privacy protection as a cover for its anti competitive behavior“ The controversy of "Apple tax" is also continuous, and gradually evolved into the accusation of Apple monopoly. On April 27, a monopoly ticket was issued.

Apple will be fined about $12 million for violating Russia's antitrust law and abusing its dominant position in the app market, the Russian antitrust bureau announced.

The anti-monopoly "drama" against apple is on the way. In early May, Epic Games' anti-monopoly lawsuit around the "Apple tax" will soon open. According to sources, the EU will also launch an antitrust lawsuit against Apple's app store this week.

With the official release of Apple IOS 14.5 on April 27, the new privacy regulation of application tracking transparency privacy function was implemented. Gan Jun

Strong apple

"When Apple was founded, the company's purpose was" this is a personal computer. ". This is your personal data. " At the 2020 global developer conference, Craig federighi, senior vice president of software engineering at Apple, said that Apple has always made privacy a core tenet of the company since Apple II was launched in 1977.

Privacy has always been Apple's core brand strategy. Apple has been trying to tell a good story about privacy years ago.

In 2015, apple made a splash by refusing to help the FBI unlock its iPhone. In recent years, almost every update of IOS system is accompanied by the enhancement of privacy protection function.

As early as IOS 10, Apple has launched the function of "limiting advertisement tracking", which can prevent accurate push based on user behavior; Ios11 adds "intelligent tracking interception" function in Safari browser to prevent the website from tracking users' browsing records; Ios13 adds the login function of "sign in with apple". Users can directly use Apple ID or randomly generated email address to log in to the third-party app or website. At the same time, the access rights of APP location are restricted.

With the continuous strengthening of Apple's voice in the field of privacy, Apple's ecological implementation of privacy related policies is becoming more and more powerful.

In December 2020, Facebook continued to publish "we are fighting apple for the sake of small businesses all over the world" on multiple media, denouncing that Apple's blocking of advertising tracking has strangled the advertising ecology of small and medium-sized enterprises and will cause "devastating consequences" to them“ If there is no personalized advertising, small business advertisers spend an average of $1, which will reduce sales profits by more than 60% It says.

Apple's tough response is that Facebook ignores user privacy and intends to collect as much data as possible between first-party and third-party products in order to develop and use its detailed user profile to profit.

Apple has banned developers from designing alternative features that circumvent anti tracking effects. Recently, the CAID scheme jointly launched by China Advertising Association and China Academy of communications was warned that snapchat would "stop the program after Apple's new policy comes into effect" after it was reported that snapchat tried to bypass the new privacy rules“ In its ecology, apple is not only a referee, but also a player as well as a "legislator". The combination of these roles makes its plan have a great impact on the industry Wang Xinrui, senior partner of Beijing Anli law firm, told the 21st century economic report that the integration of software and hardware of Apple system is more closed than Android system, which on the one hand brings better user experience, on the other hand, it also makes the partners in the ecology relatively weak.

The rebound of developers and advertisers is due to the fact that the interests are damaged due to stronger privacy protection, and there is also helplessness for apple to adjust the rules greatly based on its strong position“ By giving users more control, Apple has enhanced the protection of users' personal information. The general direction is worthy of affirmation. However, Apple's solution should not be regarded as the only one. If it is not consistent with Apple's plan, it must be an invasion of privacy, or allow software and hardware manufacturers to explore different solutions. "

Wang Xinrui also mentioned that in today's fierce competition between Chinese and foreign large-scale technology companies, sometimes they "label" each other with privacy protection or data security, which has led to the shift of focus of some complex issues.

LAN Xu, co-founder and President of mobtech, a data intelligence technology platform, also believes that protecting users' privacy and giving consideration to marketing should be guided by the state or the government, rather than allowing an enterprise to set standards. The enterprise itself is not rational enough.

What can Apple get?

The introduction of new privacy regulations may increase the business volume of AP ⁃ ple search ads, which is the first step for apple to benefit from the advertising market in disguise.

According to CIRP, an American market research company, in the first quarter of 2020, IOS accounted for 44% of the U.S. market. But what doesn't match Apple's rapidly expanding IOS ecosystem is that Apple doesn't get too much cake in the mobile Internet advertising market.

In 2010, Apple announced to enter the advertising field and launched the IAD mobile advertising platform, but the effect was mediocre, and it was closed in 2016. In the same year, Apple launched the search advertising business Apple search ads, which promoted the app on the top of the search results in the app store.

According to appsflyer data, in the first half of 2020, the proportion of users turning on "restricted advertising tracking" was 23%, and in the second half of 2020, it rose to 32%, an increase of 40%.

According to Dr. Wang Wei, general manager of Greater China of apps ⁃ flyer, a mobile attribution and marketing analysis platform, it is the shrinking IDFA user base that has led to a 30% rise in the purchase price of IOS in the past six months. On the one hand, there are fewer potential users to reach. On the other hand, many advertisers take advantage of the ineffective policy to increase investment, resulting in an increase in the demand side, but a decrease in the supply side of users, leading to the rise of marketing costs in the whole industry.

This also affects another set of data - the installation share of AP ⁃ ple search ads jumped by 34% in the second half of the year, maintaining a strong growth trend in the global IOS list.

"Advertising in the apple system may be a choice or inclination of advertisers." Ge Mengying, data compliance officer of talkingdata, a third-party data intelligence service provider, said the new privacy rules may bring business benefits to apple.

Data is becoming more and more important in Apple's own business. Apple's privacy policy is clear. Apple will collect users' device information, devices, app store search, APP news and stock market to provide advertising services to users.

More news came that Apple was developing its advertising business. According to foreign media reported on April 27, unlike the restrictions imposed by the new privacy regulations, advertisers who buy Apple's advertising space can receive more data about user behavior, know what versions of ads users see and what search keywords the ads appear on, and get results almost in real time.

Apple is planning to expand its advertising products and is testing a new advertising space, according to people familiar with the matter. The advertising space will be in the "suggestions" category of the app store, mainly based on the user's interest and audience data.

On the other hand, Apple has benefited from the "Apple tax" after the effect advertising has been shifted to paid services due to the tightening of IDFA“ Apple tax "refers to the apple store service fee, that is, the app charges users subscription fees or introduces in app purchase services, and the relevant fees will be charged with" Apple tax "of 15% - 30%“ After the implementation of the new privacy regulations and the alternative of IDFA is rejected, it is expected that some app developers will be unable to precisely market as before, resulting in reduced advertising revenue, and thus turn more to paid services. " Wang qiongfei, co-founder of Zhejiang Kenting law firm, told reporters of the 21st century economic report that Apple will make more profits from the Commission purchased in the application, and the "Apple tax" revenue will become more and more abundant.

Apple's data ambitions

Apple, which holds high the banner of privacy protection, is not plain sailing.

Opponents believe that Apple's move is intended to speed up the creation of private traffic, build a "walled garden", and use the protection of privacy as a cover for its anti competitive behavior.

On April 26, an alliance of German media advertising companies accused apple of abusing its dominant market position and violating antitrust laws before the new privacy rules took effect.

The complaint was filed by Zaw, the German Advertising Federation, on behalf of a number of industry associations, including Facebook and Axel Springer. In Zaw's view, Apple has effectively eliminated all competitors through unilateral measures, making it impossible for competitors to obtain advertising related data in Apple ecology, which will harm the interests of consumers, media content providers and competitors. At the same time, Apple has excluded its own data advertising service and collected a lot of user data.

In this regard, a spokesman for the German Federal Cartel Office confirmed to the media that it is currently under investigation.

Earlier, France digital, a French start-up lobby group, complained to cnil, the French privacy regulator, in March that Apple's IOS 14 system may have violated EU regulations.

France digitale points out that Apple requires third-party apps to consult iPhone users for permission to access IDFA and send targeted ads, but by default allows its own apps to use personal data for targeted ads without asking for user consent. Apple responded that the statement was "clearly wrong.".

In addition, in October 2020, the French Competition Authority received complaints from online advertisers that Apple was suspected of abusing its dominant market position in the implementation of ATT function. Online advertisers have requested an emergency temporary measure to suspend Apple's att function.

In March this year, the French competition authority, after preliminary examination, considered that the move was not an abuse, so it refused the request, but decided to continue to investigate whether Apple was anti competitive.

In the preliminary decision on Apple's IOS app tracking measures, the French competition authority believes that although network operators can formulate rules for the use and maintenance of digital platforms based on commercial freedom, such rules still need to be subject to the constraints of competition law. The implementation of the rules should meet the requirements of objectivity, transparency and non discrimination, and should not have the purpose or effect of restricting competition, We should not destroy and distort the existing effective competition, otherwise it will affect the active market and eventually damage the interests of consumers.

Monopoly disputes continue

The controversy of "Apple tax" also continues, and gradually evolved into the accusation of Apple monopoly.

John Nardone, chief executive of flashtalking, an advertising service software company, has said Apple's move to restrict other app advertising businesses could be seen as anti competitive“ As advertising revenue becomes more and more difficult, apps have to charge users, as we learned from Epic Games that Apple charges 30%. Apple doesn't have a place in advertising, but it does in paid apps. " John Nardone said.

The case of Epic Games originated in August 2020. Its game "Fortress night" was removed from the shelves by apple because it tried to bypass Apple's payment system. Epicgames immediately filed an antitrust lawsuit. Since then, the two companies have entered a long period of litigation, which will formally open in early May.

In February this year, the Shanghai Intellectual Property Court accepted a case of Shanghai consumers suing apple for abusing its dominant market position. The plaintiff was dissatisfied that the price of several app member services in Apple channel was higher than that in Android channel, and could only choose apple pay payment, thus depriving consumers of their right to choose their own choice and fair trade right, and requested apple to compensate 100000 yuan.

The antitrust investigation into Apple's app store is progressing globally. On March 4, the fair competition and market authority of the United Kingdom announced that it would investigate the potential anti competitive behavior of Apple's app store. On April 15, the judicial committee of the US House of Representatives approved the "digital market competition investigation report", focusing on the antitrust research on apple and Google App Stores. On April 21, the U.S. Senate Sub Committee on competition policy, antitrust and consumer rights held an antitrust hearing on "app store". Apple and Google, as providers of IOS app store and Android Google play, attended the hearing to give testimony“ There are two ecosystems that are controlling the market, acting as gatekeepers, deciding which apps can reach consumers and earning billions of dollars in commissions every year. " Amy Klobuchar, chairman of the antitrust sub committee, said at the hearing.

At the hearing, Kyle andeer, Apple's chief compliance officer, explained that Apple's control of the app store was necessary to ensure its security and maintain performance standards, with commissions balanced with "billions" spent on developing products and services“ Whether it's the increase in Apple's tax, or Apple's exploration of more advertising services, it means that Apple will get more business returns. " Wang qiongfei said that as to whether the relevant behavior is suspected of anti competition, we should take a comprehensive view from the perspective of personal information protection and market competition.

However, a monopoly ticket has been imposed. On April 27, the Russian antitrust bureau announced that Apple would be fined about 12 million US dollars for violating the Russian anti-monopoly law.

The Bureau found that Apple abused its dominant position in the app market by hindering R & D personnel from developing parent monitoring apps, and Apple App store access rules were not transparent enough.