Ad companies argue App Tracking Transparency will drive up cost of apps

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Could privacy feature be ultimately bad for users?
Photo: James Yarema/Unsplash CC

A group of media, tech, and ad companies in Germany have made an official antitrust complaint about Apple’s App Tracking Transparency feature.

The group, which represents Facebook among other companies, is concerned about the effect the new privacy feature will have on the ad business. It also claims that the feature could wind up hurting users by making apps more expensive.

The Financial Times reports:

“Nine industry associations, representing companies including Facebook and Axel Springer, the owner of Bild, Die Welt and Insider, filed the complaint on Monday with Germany’s competition regulator.”

The complaint comes ahead of today’s release of iOS 14.5, which will feature the App Tracking Transparency feature in question. It means that any app that tracks users will have to be clear about how and why it is doing this. The majority of users are expected to opt out of user tracking.

According to the German complaint, app developers are predicting a 60% decline in ad revenue. The lawyers representing the complainants argue that this new feature will ultimately wind up hurting users. That’s because, without ad revenue, many apps will switch from making free, ad-supported to ones that charge money.

Thomas Hoppner of law firm Hausfeld says that: “Consumers will be harmed by higher transaction costs. If the relevance of ads decreases, consumers will have to spend more time searching to find offerings that are relevant to them.”

Will feature hurt users?

This isn’t the first time Facebook has criticized this feature. Last year, it took out full-page ads in major newspapers bashing the new feature. Facebook’s argument is that the feature will hurt small businesses.

It remains to be seen if this complaint becomes a full-on antitrust investigation into Apple in Europe. Europe already has investigations into Apple over its control of the App Store and Apple Pay. This new complaint comes at a time when Apple is reportedly boosting its own efforts to rake in ad revenue. However, these efforts do not involve tracking users.

What do you think of Apple’s new feature? Is this good or bad for users? Let us know your thoughts in the comments below.

Source: Financial Times