Germany's ZAW Files Apple Abuse Complaint

April 26, 2021

Central associations of the media, internet and advertising industries filed a complaint against Apple with the Federal Cartel Office in Bonn. They claim that the company is abusing its market power and violating antitrust law with its “App Tracking Transparency” (ATT) program.

ATT, which Apple wants to implement from this week, obliges app providers to display an opt-in window by default when user data is to be processed. Here you have to explain to the users in accordance with Apple's specifications why you want to track them. Apple no longer wants to approve apps without ATT.

With these unilaterally imposed measures, Apple effectively excludes all competitors from processing commercially relevant data in the Apple ecosystem. At the same time, however, the group is excluding its own (advertising) services from the planned changes and collecting considerable amounts of user data itself.

The associations see this as an attempt to make it difficult for the advertising industry to access data relevant to competition in an inadmissible manner. This is not necessary due to European data protection regulations and at the same time endangers media diversity. The complainants are based in particular on new provisions in the Act against Restraints of Competition (GWB), which came into force at the beginning of the year and which enable the Federal Cartel Office to take more effective action against abusive behavior by dominant platform companies such as Apple. The associations have commissioned the Hausfeld law firm, which specializes in media and antitrust law, for their complaint.

The complainants are a broad alliance of associations from the German media and communications industry, which, under the umbrella of the ZAW, includes the following organizations:

Online Research Association,

BDZV - Federal Association of Digital Publishers and Newspaper Publishers eV,

Information community to determine the distribution of advertising media eV,

OMG eV organization of media agencies,

Markenverband eV,

Organization of advertisers in the Markenverband (OWM),

VDZ Association of German Magazine Publishers V. as well as

Central Association of the German Advertising Industry ZAW eV

The members of the associations include leading media providers, online marketers, media and advertising agencies, advertisers and institutions for neutral social and market research. The complaint unites the entire advertising and media industry in Germany behind it.

To the background:

Online advertising on mobile devices in particular has developed successfully in recent years. One of the factors contributing to this success is the fact that the advertising is largely adapted to the actual interests and needs of the users and can thus offer them corresponding added value and is perceived as more relevant.

The “App Tracking Transparency” program endangers the long-standing symbiosis of app developers, advertisers and advertising brokers and initiates a paradigm shift in favor of Apple, as a result of which consumer interests are also adversely affected.

Apple's approach:

In addition to the consent already obtained from the app developers, Apple will in future oblige them to display another declaration provided by Apple if they want to merge these various user data. If app developers do not comply, their apps will be removed from the app store.

The information content of the declaration provided by Apple is so superficial that app developers cannot adequately educate their users about the purposes of data processing. However, this clarification is a central requirement of data protection law, which can no longer be guaranteed by this new process, which is completely decoupled.

Apple's specifications are suggestive, which means that it is to be feared that the vast majority of users will not give their consent to the processing of the data. And this even if they had already given their consent beforehand after extensive individual clarification. In addition, users can make this decision - e.g. B. after further clarification of the all-round advantages of the merging of the data - difficult to revise.

As a result, Apple effectively excludes all competitors from processing advertising-relevant data in the Apple ecosystem through the unilaterally imposed measures. In doing so, Apple is harming consumers, media content providers and competitors:

According to the first market surveys, the advertising income of app developers will decrease significantly and thus the existence of smaller providers in particular will be threatened.

Consumers will have a smaller selection of such apps, many of them will either be paid for in the future or contain more unsuitable advertising that is less relevant to the content for consumers.

The variety of press, media and broadcasting is greatly reduced because the central source of finance for numerous content providers is no longer available.

The current complaint is directed against the way in which Apple is imposing this system change on the entire media and advertising industry.

With this restriction of the competition, Apple gains one-sided advantages.

The group excludes its own data processing (advertising) services from the planned changes and collects considerable amounts of user data itself.

In connection with the introduction of "App Tracking Transparency", Apple has significantly expanded its own range of data-based advertising services, for example through additional advertising space that is made available to advertising customers. ATT makes them an indispensable advertising channel in Apple's closed ecosystem.

At the same time, Apple is strengthening its own apps such as Apple Music and News, which can gain market share over advertising-financed providers. If apps have to be converted to paid subscription models due to a lack of effective advertising options, Apple also receives a commission of usually 30 percent for all sales of digital content.

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