Confrontation is brewing over Apple's new privacy changes

Mar. 16, 2021 3:51 AM ETApple Inc. (AAPL), META, GOOG, GOOGL, BDNCE, TCEHYAAPL, META, GOOG, GOOGL, BDNCEBy: Yoel Minkoff, SA News Editor62 Comments
  • Starting in the early spring, a feature dubbed "App Tracking Transparency" will be rolled in an update for iOS 14, requiring apps that gather tracking data to ask Apple (NASDAQ:AAPL) users for permission. The update was already supposed to arrive in September of last year, but it was delayed following pushback from firms including Facebook (NASDAQ:FB). The new rules also stipulate that if companies use alternatives to the identifier for advertisers, called the IDFA (somewhat analogous to an advertising cookie on the web), their app can be blocked or suspended from the App Store.
  • Backdrop: Apple has been positioning itself as a protector of digital privacy, hoping to draw users by marketing itself as a privacy-focused company. But many have been angered by the move, like Google (GOOG, GOOGL) and Facebook, whose business models greatly depend on monetizing eyeballs on every possible platform. Apple has been sparring with the companies over data-collection practices, both privately and publicly, with the latter arguing that it will undermine connectivity, as well free services supported by targeted advertising. Apple may also have to justify the billions of dollars a year it receives for making Google the default search engine on Safari, which likely uses the same data-gathering techniques that it has criticized.
  • How will Apple's new feature work? The next update will create a prompt asking users if they are okay with being tracked while moving from app to app, so their ads can be personalized. Experts think that about 70%-80% of people will say "No" to the tracking feature, which could spell trouble for tech companies that make big bucks on targeted advertising. Several other privacy changes will see the notification LED light up when apps are accessing the device's microphone or camera, while users will be able to share specific photos with apps instead of giving them permission to their entire camera roll.
  • Some of China's tech giants, like TikTok owner ByteDance (BDNCE) and Tencent (OTCPK:TCEHY), are testing a tool that would bypass the new rules and would be able to continue tracking iPhone users without consent. It's an area companies are interested in preserving, given the big business that it has generated over the past decade. If firms can get around the privacy prompt, they can continue to track how users take action from one app to another, aggregate the data and then target them with specific advertisements. Will Apple turn a blind eye or will they enforce their rules?

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