Meta Looks to Core Apple in Comments Filed With the NTIA

Meta and Apple continued their lengthy scrap over the latter’s implementation of App Tracking Transparency in its iOS operating system, and the battlefield for this latest skirmish was a request for comments by the National Telecommunications and Information Administration. ATT debuted with Apple’s release of iOS 14.5 in April 2021, and social platforms including Facebook’s parent company have continually cited its effects on ad revenue in their earnings reports. The NTIA issued its request for comment in April, saying in a release, “The executive order on promoting competition in the American economy directs the Department of Commerce, in consultation with the attorney general and the chair of the Federal Trade Commission, to conduct a study of the mobile application ecosystem and submit a report to the chair of the White House Competition Council, regarding findings and recommendations for improving competition, reducing barriers to entry and maximizing user benefit with respect to the ecosystem. Through this request for comment, the NTIA is requesting comments on competition in the ecosystem in which mobile apps exist.” In addition to ATT, Meta’s filing touched on what it called anti-competitive behavior by Apple in the areas of gaming and web browsing. An Apple spokesperson responded in a statement, "Apple believes in vibrant and competitive markets and, through the App Store, we’ve helped millions of developers around the world turn their brightest ideas into apps that change the world. The App Store is an unprecedented engine of growth that has turbo-charged competition and innovation for developers big and small. Today, third-party apps—including Facebook, Instagram and WhatsApp—are among the most popular apps on the App Store. We have every interest in supporting a robust developer community, and we intend to stay on that path.” The spokesperson continued, “Privacy has always been at the center of what we believe. At Apple, we believe that a user’s data belongs to them, and they should get to decide whether to share their data and with whom. ATT gives users the choice whether or not they want to allow apps to track them by linking their information with data from third parties for the purpose of advertising, or sharing their information with data brokers. These rules apply equally to all developers—including Apple—and we have received strong support from regulators and privacy advocates for this feature.” Highlights from the comments Meta filed with the NTIA follow: ATT Meta called the verbiage Apple uses in its popup messages to iPhone users into question, nothing that it refers to the collection of data from third-party apps as “tracking,” while the terminology it uses for Apple-owned apps and services is “personalized ads.” Apple countered that it has given users of its own apps control over personalization of ads for years. Facebook’s parent company said its filing that ATT “has unsurprisingly made mobile advertising less efficient, raising advertisers’ costs, reducing developers’ revenues and resulting in the delivery of less relevant ads to consumers. The ATT framework, however, provides Apple with both immediate and long-term benefits. Apple’s ads business has already witnessed ‘explosive growth’ as ATT has hobbled its competitors.” Meta also noted that ATT has prompted some app developers to switch from ad-based monetization to fee-based monetization, and Apple collects commissions of 15% to 30% on those fees. And on SKAdNetwork, the tool Apple provides to help developers attribute installations of their apps by users who decline to opt into tracking, Meta wrote that it “does not support ad-creative metrics, provides data on a delayed and highly aggregated basis and supports only a limited number of ad campaigns.” The company also accused Apple of making “sudden and unannounced changes” to SKAdNetwork. Gaming Meta contended that Apple’s policies restricting cloud games and HTML5-based games have prevented it from adding features that would allow developers to distribute and monetize their games via iOS, as well as inhibited the development of titles on those platforms. The company wrote, “Both cloud games and HTML5-based games work across devices and mobile operating systems. Cloud games further diminish the importance of a consumer’s device because they rely on the cloud, rather than the consumer’s device, for processing and storage. Cloud games and HTML5-based games would ordinarily facilitate switching among mobile operating systems, but Apple’s restrictions prevent them from realizing this potential.” Apple countered that iOS users accessing multiplatform services on iOS or elsewhere are free to access content, purchases and subscriptions made on platforms outside of the App Store as long as the iOS app makes those same features available for purchase within it, adding that games in Apple Arcade must comply with the same policies as other gaming services on Apple devices. Web browsing Meta said Apple’s restrictions on independent web browsers prevent web apps from emerging as viable, operating system-agnostic alternatives to native apps, writing, “While third-party browsers (such as Chrome) appear in Apple’s App Store, any competition they provide is largely illusory. Apple requires all web browsers on iOS to use WebKit, a degraded version of Apple’s Safari browser, to render web pages. Apple thus sets Safari as a functionality ceiling for mobile browsers on iOS. The restrictions on Safari’s and other iOS web browsers’ capabilities prevent web pages and web apps from providing consumers with robust, cross-platform experiences that would lower switching barriers.” Apple countered that WebKit represents a crucial part of the security and privacy model of iOS, as it implements stringent privacy and security technologies for browsing on iOS devices, adding that it was designed and optimized for use on those devices in order to ensure high quality and performance, as well as to boost power efficiency and battery life. The company added that removing the WebKit requirement would leave users of iOS devices vulnerable to malicious web attackers and privacy invaders, and diminish competition between iOS devices and competing devices. The company concluded in its comments to the NTIA, “Taken together, Apple’s restrictions on third-party web browsers, its restrictions on third-party gaming apps and its ATT framework severely limit developers’ ability to create and consumers’ ability to enjoy cross-platform apps that could lower barriers to switching from Apple to Android and other devices. Apple’s self-serving tactics prevent consumers from realizing the innovation and benefits of a dynamic and otherwise well-functioning mobile app ecosystem.” Spotify pointed out in its comments that Apple requires the use of its in-app purchase system (IAP) for the distribution of paid content and charges a 30% fee on purchases, while that fee is not applied to its own apps. The streaming platform added, “Apple uses ‘anti-steering provisions’ that prohibit developers from informing users about alternative payment options. These rules prohibit developers from including any buttons, external links or other calls to action that direct customers to purchasing mechanisms other than IAP, which are usually cheaper.” Google Play is the other “big two” app store, and Google shared the vision it outlined for its Android operating system in the comments it filed: “Android holds the promise of unprecedented benefits for consumers, developers and manufacturers of mobile services and devices. Handset manufacturers and wireless operators will be free to customize Android in order to bring to market innovative new products faster and at a much lower cost. Developers will have complete access to handset capabilities and tools that will enable them to build more compelling and user-friendly services, bringing the Internet developer model to the mobile space. And consumers worldwide will have access to less expensive mobile devices that feature more compelling services, rich internet applications and easier-to-use interfaces—ultimately creating a superior mobile experience.” The company continued, “Over the past 15 years, that vision has become reality. Android’s openness helps power a competitive ecosystem that generates tremendous value for consumers, developers, device makers, telecommunications companies, other technology companies and the American economy as a whole. In 2020, the Android app economy, including Google Play, helped create nearly 2 million American jobs—from software engineers and developers of mobile apps, to the marketing and human resources teams that support them.” Google went on to say, “Choice is a cornerstone of the Android ecosystem. Because of Android’s openness, more than 1,300 brands have been able to build more than 24,000 different Android devices. Developers are able to distribute their apps in a variety of different ways: across multiple different app stores; through distribution agreements with hardware manufacturers and carriers; and on the web directly. Google Play supports more than 500,000 American developers and enables them to distribute apps to billions of users around the world, manage payments and secure their data with industry-leading safeguards.”

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Meta Looks to Core Apple in Comments Filed With the NTIA

The National Telecommunications and Information Administration will submit its findings to the White House Competition Council

David Cohen

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