Apple's new anti-tracking rules could change how people do business

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7 minutes
Apple's new anti-tracking rules could change how people do business

pple's next major software update for the iPhone is set to give users more control over their privacy and could significantly change how advertisers and app developers do business.

iOS 14.5, already in the hands of beta testers and planned for release later this month, puts serious restrictions on the information third parties can gather from iPhone and iPad users without their permission. This data, which is often used for ad tracking and targeting, is highly sought after by companies. Why are the new privacy features so infuriating for advertisers, app makers and some of Apple's biggest Silicon Valley neighbors? Facebook has pushed back publicly against the new protections. While Apple, which uses the data in new ways, has resorted to less effective advertising tracking measures and avoiding Google's first anti-tracking features.

What do the new app transparency rules mean, exactly? For one thing, they require app developers to send information about the user data they collect, how it will be used and whether developers will further track users and send them targeted ads. As part of the new framework, each app privacy policy will be prominently displayed on its App Store page, allowing users to see what data the app is using to track them, what information it knows about them and whether this data is being sold to other businesses. Of course, data you freely give within apps like searches and like is still fair game and can be used without your express permission.

The Apple leadership, including CEO Craig Federighi and SVP of software engineering Tim Cook have spoken publicly about the need for increased control of personal data among consumers. At a moment of rampant disinformation and conspiracy theories fueled by algorithms, we can no longer turn a blind eye to a theory of technology's claim that all engagement is good engagement- the longer the better- and all with the goal of collecting as much data as possible, said Cook at a virtual privacy conference in January. The company even went so far as to create a basic guide on how data collected by apps without consumers' knowledge is used to target people in invasive ways.

Privacy advocates like the Electronic Frontier Foundation say Apple's move is a win for consumer data protection. The system reinforces itself by lured consumers into the myth that it's just ads, says EFF Gennie Gebhart. When we say it's just ads, they are the sprawling tip of the iceberg of this visible data sharing network. It does not work in any user's best interest.

The App Store information is displayed in an easy-to-read label which shows which apps collect what data as long as they 're transparent, of course. Developers can make their case to users in the app before asking permission to access unnecessary data, but apps must respect the user's permission settings and not attempt to manipulate, trick or force people to consent to private data access according to Apple guidelines.

Other users wo n't see much change and developers and ad-focused companies, however, can expect their fortunes to fall by more than a little. Companies are expecting Apple's tightened privacy policy to make it harder for targeted ads to reach their target. Apple's ATT changes will reduce visibility into key metrics that show how ads drive conversions and will affect how advertisers value and bid on ads impressions, said Google in a blog post describing the changes it is making to its ad tracking. As such, app publishers may see a significant impact on their Google ad revenue after Apple's ATT policies take effect on iOS. Facebook said it would display a prompt suggesting users enable tracking to see better targeted ads, but that the decision would have disproportionate impact on small businesses depending on personalized advertising, a move the company says only benefits larger advertisers, including companies like Apple itself.

If this is enough to entice people to share location data, or personal data of a given location, is an open question for the social networking giant. Currently, app developers must disclose the information they 're tracking, which has led to some ridiculously long disclosure lists from apps like Facebook and WhatsApp. With the changes, consumers become more aware of which companies want access to their data, while Apple can claim it's protecting users from overreaching companies.

The protections also help Google to distinguish iOS from Apple's Android platform, especially for prospective buyers worried about privacy intrusions. A recent Bloomberg report detailed Google's early efforts to create its own version of anti-tracking which would likely not require an opt-in prompt, but details are scarce. Another worry for consumers is that the data companies collect is sometimes sold under the table.

The$ 200 billion data broker industry has many unlikely friends. Last summer, the operators of the Weather Channel app settled a lawsuit that alleged that the app misled millions of customers into sharing location data. The suit also claimed that the operators sold the information to third parties without consent from consumers. A recent Motherboard report detailed how the counterterrorism branch used location data from multiple apps including dating and prayer apps to track users illegally. While company like Twitter and Snapchat have responded to Apple's new guidelines, Facebook is incredibly vocal.

The company used full page ads in several newspapers to discuss the harm it says Apple's ad blocking tech will have on small businesses. It also started the Good Ideas Deserve To Be Found initiative, which highlights how personalized ads are an important way for people to find small businesses on Facebook and Instagram. Some advertisers see opportunity in the shifting advertising landscape.

To James Nord, CEO of influencer marketing agency Fohr, the changes represent a chance to make brand ambassadors more effective as larger campaigns conducted through platforms like Facebook or Google become less effective on iOS devices. Fohr connects brands to influencers in relevant audiences and helps them manage metrics like views, likes and overall effectiveness in pushing a product. Restricting access to user data makes targeted advertising more expensive, less effective and more expensive, which means an influencer's predominantly opt-in audience of followers becomes all the more valuable.

Nord says: We know what their interests are, that means marketing budgets could see a shift from Facebook's pockets to a smaller, more targeted group of influencers. To Nord, Apple's established position as a hardware manufacturer allows it to use its privacy changes to its advantage as its own marketing scheme to attract people away from competitors who make money by following your online habits. For its part, Apple is sidestepping the new change as much as possible, opting to avoid the transparency pop-up that Google uses to track users between apps, for advertising purposes. By avoiding Apple's ad tracking tool entirely; When Apple ’ s policy goes into effect, we will no longer use information that is currently used for advertising purposes under ATT for the handful of our iOS apps that use it for promotional purposes, said the company in a blog post.

As such, we will not show the ATT prompt on those apps in line with Apple's instructions. While the company has offered guidelines to prepare for iOS 14.5's release, it also suggested that advertisers should be prepared for a significant decline in reach when it comes to advertising on iOS devices.

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