ACADEMIC ARTICLE SUMMARY
Harming Competition and Consumers under the Guise of Protecting Privacy: An Analysis of Apple’s iOS 14 Policy Updates
Article Source: 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
Publication Date:
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ARTICLE SUMMARY
Summary:
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
Policy Relevance:
Apple intends iOS 14 to restrict competition. Pro-consumer privacy policies support consumer choice.
KEY TAKEAWAYS
Key Takeaways:
- 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.
- The opt-in screen for third-party apps includes pejorative warnings about tracking.
- 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.
- Consumers will be shifted to Apple’s paid model.
- 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 apps are not available for Android.
- 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.
- Apple offers only a binary choice.
- Research shows that stringent opt-in requirements reduce the effectiveness of personalized advertising and can hamper innovation.