Harming Competition and Consumers Under The Guise of Protecting Privacy: Review of Empirical Evidence

Apple proposed the new “App Tracking Transparency” (“ATT”) policy in November 2020 and required all apps to have this feature enabled on April 26, 2021, which was the beta release of iOS 14.5. The policy prohibits apps from engaging in any activity that Apple defines as “tracking” unless the apps prompt users for “permission to track [them] across apps and websites owned by other companies” and users explicitly opt in to “tracking.” In a prior essay, we identified that this policy actually masked anti-competitive conduct under traditional antitrust theories. Further, we suggested that the policy would have the pernicious effects of enhancing the dominance of iOS among mobile-operating systems (“OSs”) and the dominance of its own apps and services within the iOS ecosystem, while reducing consumer choice and devastating the free-app ecosystem enabled by personalized advertising. In this essay we reexamine the issue with the benefit of a year of data. The overall empirical record on competition and privacy scholarship as well as ATT specific scholarship lead to the conclusions that: (1) competition and privacy can be at odds; and (2) that Apple’s ATT policy has made app developers, particularly small and new firms, worse off. The ATT policy has done so by masking anti-competitive conduct under the guise of privacy protection.

By D. Daniel Sokol & Feng Zhu^[1]

I. INTRODUCTION

Apple proposed the new “App Tracking Transparency” (�