Apple facing US legal challenge over privacy changes

Apple is facing a fresh legal challenge over its data collection policies in the US, raising questions about its implementation of privacy policy changes it made last year that rivals, including Meta, have claimed have damaged advertising revenues, contributing to the recent wave of lay-offs in Ireland and abroad.

In a lawsuit filed in California earlier this month, the iPhone maker is accused of collecting users’ private activity on mobile applications without their consent in breach of California law.

The lawsuit, filed by plaintiff Eliot Libman, alleges that despite claiming that users are in full control of their data, Apple conducts “pervasive and unlawful data tracking” practices. Bloomberg reported last week that Mr Libman claims that Apple knows “the most intimate and potentially embarrassing aspects of the user’s app usage — regardless of whether the user accepts Apple’s illusory offer to keep such activities private”.

Apple has been approached for comment.

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The allegations would seem to raise questions about Apple’s implementation of changes it made to its privacy policy last year, which have been heavily criticised by rival big tech companies.

Dubbed Apple Tracking Transparency (ATT), the policy was introduced in 2021, allowing users to choose whether or not advertisers can track them.

Apple has been tightening privacy options for its users for a number of years, first introducing anti-tracking features in 2017. Craig Federighi, Apple’s senior vice-president for software, told PA last year that the customer is the company’s “north star” and “making sure that at the very least we’re giving them visibility and choice”.

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But the changes have also caused consternation in boardrooms, particularly at internet companies that generate large proportions of their revenues from tracking and advertising.

“Prior to ATT, Meta and Snap platforms like YouTube and TikTok, they were able to receive data back from advertisers when consumers did things on their property, when they purchased items in an app or they purchased items on a website,” Eric Seufert, a US-based media strategist and analyst told The Irish Times.

“They sort of transmitted the fact that those purchases happened back to the ad platforms so that platforms could receive that information and use it to improve their advertising campaigns. And that’s not really possible anymore on IOS.”

Market competition

Meta and others have seen their ad revenues contract since Apple implemented the policy last year. The Facebook and Instagram owner has posted two consecutive quarters of declining revenue and is expected to post a third for the fourth quarter of its current fiscal year.

Notifying staff last month of plans to shed 11,000 jobs globally — including roughly 350 in Ireland — Meta chief executive Mark Zuckerberg counted “ads signal loss” among the main factors driving the decline in revenues, alongside worsening macroeconomic conditions and increased market competition.

“There is nothing else he could have meant” other than the impact of ATT, Mr Seufert said. While he said that the loss of ad revenue was not “the primary reason for the lay-offs”, ATT has caused “a pretty material contraction in revenue”, Mr Seufert said, with the potential to become a “permanent, systemic friction” for the social media giant over time.