MISCELLANEOUS

Wed 15 Mar 2023 10:02 pm - Jerusalem Time

Apple is a new strong competitor in the electronic advertising sector

Paris - (AFP) - Despite promoting itself as the first defender of user privacy, the American giant Apple group is facing a torrent of criticism about advertising ambitions that it intends to achieve, according to its competitors, by adopting striking measures on the principle of competition.


After it radically changed the trade of personal data on the Internet by banning cookies on its browser, the Apple group in the spring of 2021 entered the same market through mobile applications.


In concrete terms, the new system, called App Tracking Transparency, allows iPhone users to refuse to share advertising identifiers for their devices. As expected, the majority of users refused to allow trackers to monitor activities across the network.


Application developers (from the giant Facebook group to small startups) have thus lost the ability to target advertising directed at Apple customers, although these are classified as among the preferred advertising targets for advertisers because of their usually high purchasing power.


The update contributed to the collapse of part of the value of technology companies on the stock exchange. The Meta Group (which owns especially Facebook, Instagram, and WhatsApp), expected in early 2022 that this update would cause it lost profits of ten billion dollars during the year, and announced in November that it would lay off 13% of its employees.


"In fact, a large part of the profits in the mobile device sector pour into Apple," Mark Zuckerberg, head of the Meta network, said Wednesday during a conference organized by the New York Times, especially through commissions on paid applications and digital purchases.


Other groups that rely heavily on targeted advertising, such as Snap, owner of the Snapchat app, have also had to reconsider their plans and lay off employees following Apple's decisions.


However, the sector now intends to subject Apple before the courts.


In France, a pressure group linked to the online advertising sector hopes to achieve legal success in a lawsuit it filed before the Competitiveness Authority accusing Apple of abusing its important position.


In May 2021, the Commission's board had initially rejected a request by the pressure group to impose restraining measures on the American group, considering that Apple had not yet "implemented a practice that would potentially harm competition."


However, the judiciary continues to study the content of the complaint, especially on the basis of the principle of self-preference, meaning that Apple adopts more flexible rules with its applications.


The head of the "Digital Alliance" association active in the field of e-marketing, Nicolas Riolle, expressed Thursday his regret that things are "not moving at the required speed in the face of the very strong effects on competition," noting that similar judicial measures were taken in Germany and Poland.


In parallel, the "France Digital" association, which includes application developers, filed a complaint against Apple before the French Authority for the Protection of Personal Data.


While Apple does not announce any figures on its advertising revenues, estimates by Wedbush Securities analysts indicate that Apple's annual revenue from the App Store is approximately $4.5 billion.


Studies expect that these revenues will rise to $30 billion in 2025, especially if Apple adds ads to its Apple TV service or Maps application. It will then occupy the fourth position in the digital advertising sector behind Google, Facebook and Amazon.


However, Apple relied heavily on building its image on respecting privacy, emphasizing on giant posters that its applications do not collect personal data.


"It is very good that each side is committed to data confidentiality, but it should not be false propaganda," Romain Robert, director of programs at the privacy advocacy association NEOP, told AFP.


Two developers specializing in information security recently revealed that Apple is able to track users' browsing through the App Store, without them having any possibility of rejection.


After this information, a class action lawsuit was filed against Apple in California on November 10. In response to questions from AFP on the matter, Apple declined to comment.

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Apple is a new strong competitor in the electronic advertising sector