Harming Competition and Consumers under the Guise of Protecting Privacy: An Analysis of Apple’s iOS 14 Policy Updates

Search and Advertising, Privacy and Security, Competition Policy and Antitrust, Internet and Networks, the Internet, and Cloud Computing

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Daniel Sokol and Feng Zhu


University of Southern California Center for Law & Social Science (CLASS) Research Paper No. CLASS21-27, University of Southern California Legal Studies Research Paper No. 21-27, 2021


Apple’s iOS 14 update claims to protect privacy by requiring consumers to opt in to allow data sharing by third-party apps. But this unfairly advantages Apple’s own products.

Policy Relevance

Apple intends iOS 14 to restrict competition. Pro-consumer privacy policies support consumer choice.

Main Points

  • Prior to iOS 14, developers could monetize apps offered in Apple's store by charging consumers a fee (to which Apple added a surcharge), or by sponsoring the app through advertising, so the app is free to consumers.
  • Content supported by personalized advertising benefits advertisers, app developers, and consumers; personalized ads help small businesses find consumers on a low budget, allowing small, new, or niche brands to compete with national brands.
  • Apple's iOS 14 update bars third-party (non-Apple) apps from using data needed for personal advertising, unless the consumer opts in.
    • The opt-in screen for third-party apps includes pejorative warnings about tracking.
    • The privacy controls for Apple's own apps refer only to personalized ads, not to tracking.
    • Studies suggest that 80-85 percent of users will not opt in.
  • Apple's new policy is disguised as a privacy measure, but is really an anti-competitive measure.
  • Advertisers' ability to show relevant ads to consumers will be greatly reduced, undermining free (advertiser supported) apps.
    • Consumers will be shifted to Apple’s paid model.
    • Third-party apps will be more expensive than Apple's apps, the price of which do not include a surcharge.
  • Apple’s own advertising service will not be required to follow the same rules, giving it an advantage over rivals.
  • Apple’s policy will shift consumers to Apple-affiliated apps, in turn raising the cost to consumers of switching from Apple to Android.
    • Apple apps are not available for Android.
    • Documents show that Apple executives wish to build a moat around iOS to prevent cross-platform competition.
  • Apple’s new policy harms consumers by forcing them to pay for apps that previously were free; studies show that 84 percent of consumers prefer an ad-supported internet with free content.
  • If Apple’s real goal was to protect privacy, Apple could offer less restrictive alternatives, similar to Facebook’s “Off-Facebook Activity feature,” which allows users to review apps’ use of data and choose different levels of sharing.
    • Apple offers only a binary choice.
    • Apple’s policy is discriminatory and discourages consumers from opting in.
    • Apple supplies no information about the benefits of personalized advertising.
  • Research shows that stringent opt-in requirements reduce the effectiveness of personalized advertising and can hamper innovation.

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