On March 17, 2021, the French Competition Authority (hereinafter, the “FCA”)[1] rejected the request for interim measures of various players in the online advertising industry concerning the introduction by Apple Inc. (“Apple”) of the App Tracking Transparency (“ATT”) feature as part of the upcoming changes in its iOS 14 operating system.
Background
On June 22, 2020, Apple announced that it would implement the ATT feature as part of its policy to enhance customer privacy. The ATT feature displays a pop-up window requesting iPhone users’ explicit consent (the “ATT solicitation”) that online advertisers track their activity on websites or mobile applications for ad targeting purposes.
On October 23, 2020, several associations representing mobile marketing agencies, advertising agencies, and other players in the sector filed a complaint to the FCA. They argued that, while Apple has a monopoly on the market for the distribution of iOS applications, it abused its dominant position by imposing on application developers unfair trading conditions which were not necessary and proportionate to protect the personal data of iOS users. The claimants also argued that Apple’s practice constituted unlawful tying and bundling[2] by imposing an undue obligation on application developers to provide additional services that are unrelated to the distribution of applications on iOS devices.[3] The complainants requested interim measures to order Apple to suspend the ATT solicitation.
The FCA’s assessment
The FCA dismissed the request for interim measures and found that Apple’s practice was unlikely to be anticompetitive, subject to an investigation on the merits.[4]
On unfair trading conditions, the FCA found that the introduction of the ATT solicitation was part of Apple’s data protection policy and constituted, in principle, a legitimate exercise of Apple’s commercial policy.[5]
In addition, the FCA pointed out that it was not established that Apple’s ATT solicitation was unnecessary and disproportionate to protect the personal data of iOS product users, and that it was therefore unlikely to constitute unfair trading conditions. In particular, application developers have the possibility of personalising the ATT solicitation to explain the reasons why they require personal data and convince users to accept their tracking devices for advertising purposes.[6]
On tying and bundling, the FCA explained that the ATT solicitation did not constitute an obligation for developers to provide an additional service.[7] The ATT solicitation rather amounted to a service ancillary to the distribution of applications in the App Store and which would also address customers’ concerns on personal data protection.[8]
Consequently, the FCA rejected the request for interim measures. The FCA nevertheless decided to investigate the case on the merits to ensure that, by imposing the ATT solicitation on players wishing to use the tracking of user activity on third-party sites, Apple is not applying a more stringent treatment than it would apply to itself in the form of self-preferencing.[9]
[1] FCA Decision no. 21-D-07 of March 17, 2021, regarding a request for urgent interim measures presented by Interactive Advertising Bureau France, Mobile Marketing Association France, Union Des Entreprises de Conseil et Achat Media, and Syndicat des Régies Internet, associations in the sector of mobile applications advertising on iOS.
[2] Article 102(d) TFEU provides that “making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts” may constitute an abuse of a dominant position.
[3] FCA Decision no. 21-D-07 of March 17, 2021, para. 90.
[4] In order to issue interim measures, the FCA must find that the company’s conduct (i) likely infringes competition rules and (ii) causes serious and immediate harm to the general economy, the relevant sector, consumers, or the complainant’s interests.
[5] FCA Decision no. 21-D-07 of March 17, 2021, para. 147.
[6] FCA Decision no. 21-D-07 of March 17, 2021, para. 152.
[7] The FCA noted the four cumulative conditions to be met for a conduct to fall within the scope of Article 102(d) TFEU: (i) the undertaking is dominant in the market where it offers the product or service; (ii) the additional obligation is not related to the subject matter of the contract; (iii) the additional obligation does not give the other party the choice of obtaining the other product or service without accepting the additional obligation; and (iv) the additional obligation is likely to restrict competition (FCA Decision no. 21-D-07 of March 17, 2021, point 166).
[8] FCA Decision no. 21-D-07 of March 17, 2021, point 170.
[9] Ibid., paras 162-163.