Is Apple’s new tracking policy protecting privacy or stealing profit?
While the rumbling over Google's 'privacy-enhancing' Federated Learning of Cohorts (FLoC) continues, moves by Apple to introduce a new tracking policy have only fuelled questions about the companies' real motives.
Announced in March, FLoC removes the need for third-party cookies by placing users into different cohorts, with similar browsing habits and common interests.
While the Chrome browser will still track which sites are visited, only the bulk information about the larger groups will be shared for advertising purposes.
Meanwhile, Apple has announced plans to introduce its new App Tracking Transparency (ATT) policy with the latest version of IoS, requiring advertisers to ask permission before tracking users for advertising purposes.
However, questions are now being raised about the motives of both companies.
Leading the charge is Facebook. As early as last December, when Apple's plans were first announced, the company suggested that the move was all about profits, rather than privacy.
"It will force businesses to turn to subscriptions and other in-app payments for revenue, meaning Apple will profit and many free services will have to start charging or exit the market," claimed Dan Levy, Facebook's VP for ads and business products.
"Our studies show, without personalized ads powered by their own data, small businesses could see a cut of over 60% of website sales from ads."
The fear is that smaller app developers will find it harder to advertise their products, making it more likely that users will turn to the apps that best suit Apple - perhaps those that charge through subscriptions and give Apple a cut.
Small game developer Unity, for example, recently warned in its 2020 results that it expected revenues to fall by three percent as a result of the move.
And with Apple expanding its own ad business, it seems more than possible that advertisers on its platform will receive more detailed and timelier information than those using third party platforms.
Pressure on Google continues
As for Google, FLoC, too, is being seen as a less-than-totally-altruistic move. While Google may not be using third-party data to serve personalized ads, there's no such block on its own first-party data.
"Given that Google operates an extensive suite of high-traffic products and services—such as Chrome (65 percent market share globally) and Android (85 percent market share globally)—its first-party data is incredibly comprehensive, precise, and, from a privacy perspective, potentially invasive," points out Maya Villasenor of US think tank the Council on Foreign Relations (CFR).
"Google no longer needs or wants to depend on data derived from tracking users outside of its purview, and thus its announcement is better viewed as a manifestation of the extraordinary scale of the data it has already collected than as an altruistic, pro-privacy decision."
And the same is true of many of the other bigger players in the market - again putting smaller rivals at a disadvantage, particularly those that are new to the market.
Regulators in Germany, France, the UK, and Belgium have all announced plans to examine FLoC, while the European Commission says it's 'within the scope' of its current advertising competition investigation.
Meanwhile, nine German media, tech and advertising industry associations have filed a complaint with Germany's competition regulator, accusing Apple of antitrust activity. These complaints, in short, look set for a wider airing.