Apple’s Ad Tool Faces Initial Probe by French Data Watchdog

by BLOOMBERG

Apple Inc. faces an initial investigation from France’s data-protection watchdog following a complaint that its personalized advertising feature violates European Union privacy rules.

CNIL, the regulator that oversees privacy and data, is examining allegations from France Digitale, a lobbying group representing startups and venture capital firms, a spokesman for the authority said in response to questions from Bloomberg.

France Digitale says Apple’s personalized advertising feature — which shows ads in the App Store, Apple News, and the Stocks app — is based on users’ data, but doesn’t seek consent before sending targeted ads. The complaint comes as Apple is preparing to release an iPhone and iPad software update that limits how much data third-party advertising systems, such as those from Facebook Inc., can gather about users.

Users are “insufficiently informed” about the use and the processing of their personal data, France Digitale wrote in its complaint submitted last week to CNIL, which was seen by Bloomberg News and confirmed by the regulator.

Apple pointed to its previous comments on the matter when it called the allegations “patently false” and said “privacy is built into the ads we sell on our platform with no tracking.”

The investigation may eventually be dismissed, lead to requests for Apple to make adjustments to its system or become an in-depth probe with CNIL imposing sanctions, spokesman Yohann Brunet said. The timing of the probe is undefined, he said.

“We have to do a detailed study of what’s been sent to us” before CNIL decides whether the EU’s data protection or e-privacy rules are at issue in the case, Brunet said.

The EU’s General Data Protection Regulation, in effect since May 2018, allows data regulators to levy fines of as much as 4% of a company’s annual sales. The EU’s e-privacy rules are separate and regulate companies’ use of cookies and other tracking devices.

France Digitale’s move comes after a group of French online advertisers filed a complaint with the country’s competition authority, asking it to halt changes to how iPhone users’ data is collected. The group of four advertising lobbies said the changes violated European Union rules on user consent, saying Apple can still deliver personalized advertising via a default setting, holding itself to a different standard.

The French antitrust ruling, which could have implications for Apple’s planned iOS 14 update, is expected as soon as March 17.