Apple’s privacy ad helps tech giants

What some have called the mobile advertising Armageddon is finally upon us. Starting on Monday, Apple Inc will put in place new privacy protocols that will make it much harder for apps to gather user data for personalising digital ads. The change will have vast ramifications for how the app economy works and alter the dynamics of power among the top platforms, advertisers and app developers. But it also comes at a pivotal moment for the industry: Just when governments around the world are looking to clamp down on the rising dominance of the largest technology companies, Apple’s latest initiative could further strengthen the hand of those same giants at the expense of smaller rivals.
Apple revealed that its next software update for iPhones, rolling out next week, includes its AppTrackingTransparency
requirement. The long-awaited privacy feature will for the first time force all apps to request permission to track a user’s
activities across other companies’ apps. Some analysts project more than half of consumers will decline tracking. Several companies have also expressed their uncertainty over the issue. Online dating app Bumble cautioned in its prospectus that more than 80% of users may decide to opt out, while Snap Inc acknowledged that Apple’s changes were an important milestone and could significantly affect how they work with advertisers.
This is a big deal. For those users who opt out, app makers will no longer be able to share the kind of information on activity — such as search topics, types of items purchased and interests — that has allowed developers to compile detailed personal profiles for targeting ads effectively. Advertisers, too, will be at a disadvantage because they will be less able to see which ads led to an online sale or app installation, hurting their ability to measure campaign performance. Ad prices may drop as a result.
Apple, which has more than 1 billion active iPhone users and controls more than half of the US smartphone market, believes it is the right time to move forward on an issue that has drawn scrutiny from regulators, lawmakers and consumer advocates.
Technology companies’ control and use of valuable personal data is a big reason tech giants have been under fire, and Apple CEO Tim Cook has acknowledged that the industry hasn’t done enough to respect the privacy of consumers nor been fully transparent on how it exploits their data. And yet, even as this move would seem to be a victory for consumers, the reality is it may increase the dominance of the biggest platforms.

—Bloomberg