SAN FRANCISCO, United States — An update to the software
powering some billion iPhones around the world kicks in Monday with an enhanced
privacy feature critics fear will roil the internet advertising world.
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Apple will begin requiring app makers to tell users what
tracking information they want to gather and get permission to do so,
displaying what have been referred to as “privacy nutrition labels.”
The move by Apple, which has been in the works for months,
has sparked a major rift with Facebook and other tech rivals and could have
major implications for data privacy and the mobile ecosystem.
Digital ads are the lifeblood of internet giants such as
Google and Facebook, and are credited with paying for the cornucopia of free
online content and services.
An update to the iOS software that powers iPhone, iPad, and
iPod devices brings with it an “
App Tracking Transparency framework” that stops
apps from tracking users or accessing device identifying information without
permission.
“Unless you receive permission from the user to enable
tracking, the device’s advertising identifier value will be all zeros and you
may not track them,” Apple said this week in an online message to developers.
The requirement, which some developers adopted early, will
apply to all iOS apps as of Monday, according to Apple.
’Change agent’
Mobile Dev Memo analyst and strategist Eric Seufert said
Apple’s new framework could “upend” the app economy along with digital
advertising more broadly, calling the new policy “a change agent.”
Seufert said in a blog post, “It’s impossible to dismiss the
fact that digital advertising on mobile is conducted through what Apple defines
as ‘tracking’: explicitly purging this activity from the ecosystem will require
the mobile operating model to change.”
With more than a billion iOS powered devices in active use
around the world, a change to the mobile operating system that potentially
hampers the effectiveness of digital ads could be significant.
Platforms such as Facebook or Google that rely on
advertising typically get paid only when someone takes an action such as
clicking on a marketing message.
Ads made irrelevant because less is known about users could
mean fewer clicks and, by extension, less revenue.
Mobile apps and the internet in general have flourished by
providing information, games, driving directions, and more free of charge, with
ads bringing in money to keep data centers running and profits flowing.
While some people using iPhones might grant permission for
tracking, marketers fear many will opt for privacy.
During an earnings call early this year, Facebook warned
that Apple’s change to its mobile operating system will likely make it tougher
to target ads.
Facebook chief executive Mark Zuckerberg said in the call
that Apple was becoming one of his company’s biggest competitors, with its
rival smartphone messaging service and tight grip on the App Store, the sole
gateway onto iPhones.
“Apple has every incentive to use their dominant platform
position to interfere with how our apps and other apps work, which they
regularly do to preference their own,” Zuckerberg said.
“Apple may say that they’re doing this to help people but
the moves clearly track their competitive interests.”
The social networking giant has argued that the iPhone
maker’s new measures on data collection and targeted ads would hurt small
businesses.
Apple CEO Tim Cook defended the move, saying in a recent
interview: “The principle is that the individual should be in control over
whether they’re tracked or not; who has their data.”
Apps will still be able to target “contextual ads” based on
what users are doing during sessions, keeping the insights to themselves.
Advances in artificial intelligence and data analytics
should help platforms, and by extension advertisers, effectively target using
less data about users, reasoned Creative Strategies analyst Carolina Milanesi.
“Advertisers have to still be relevant to people without
stalking them, which is something that is good for the consumer and good for
the brands,” Milanesi said.
“I think Apple is right; transparency is always something we
should aspire to.”
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