Apple Hit With Supersized Fine in Italy Over an iPhone Privacy Feature

Italy's Competition Authority (AGCM) has imposed a €98.6 million ($116 million) fine on Apple over its App Tracking Transparency feature.

Since the release of iOS 14.5 in April 2021, Apple has required apps to ask for permission before tracking a user's activity across other apps and websites for personalized advertising, as part of a feature named App Tracking Transparency. If a user selects the "Ask App Not to Track" option, the app is unable to access the device's advertising identifier.

In a press release and executive summary today, the AGCM said the App Tracking Transparency rules are "disproportionate," and "harmful" to app developers and advertisers. Ultimately, it found that Apple abused its dominant position in the EU market.

The regulator does not take issue with Apple implementing policies that are designed to strengthen privacy and security for users, but it said the App Tracking Transparency feature is "excessively burdensome for developers."

Specifically, iPhone and iPad users in the EU are presented with both App Tracking Transparency and GDPR-related permission prompts in apps, and the AGCM found this "double consent" requirement to be harmful to app developers and advertisers.

"Apple could have achieved the same level of privacy protection for its users through means less restrictive of competition," the AGCM said. "This would have prevented the unilateral imposition of additional burdens on third-party developers, thereby avoiding the above-mentioned double consent requests for advertising purposes."

The regulator also found that the App Tracking Transparency rules appear capable of generating financial benefits for Apple, even though the feature applies to its own apps as well. The only reason that Apple apps do not show an App Tracking Transparency prompt is because Apple does not track user activity across other apps and websites.

In a statement shared with several media outlets, Apple said it will appeal the decision, and it touted the privacy benefits of App Tracking Transparency.

Earlier this year, Apple warned that it may be forced to stop offering App Tracking Transparency in the EU due to regulatory pressures in countries such as Italy, France, Germany, and Poland, and from the overarching European Commission.

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