Italy Fines Apple $12m As EU Bloc Amplifies Antitrust Regulation

Italy Fines Apple $12m As EU Bloc Amplifies Antitrust Regulation

Italy’s Competition Authority (AGCM) said on Monday it had fined Apple €10 million ($12 million) for “aggressive and misleading iphone commercial activities”.

The regulator said in a statement that the tech company failed to clarify that it’s under certain circumstances, when it advertised several iphone models as water resistant.

“The message did not make it clear that this property can only be found under specific conditions. For example, during specific and controlled laboratory tests with the use of static and pure water, and not under normal conditions of use of the devices by consumers,” AGCM said.

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It added that Apple put out a disclaimer, saying that its phones were not covered by a warranty if damaged from liquids. And clients who were misled thus to damage their phones were not provided with any support.

The fine has added to the many cases Apple has recorded in Europe this year. In November, consumer rights activist Max Schrems filed a formal privacy case against Apple, arguing that the tech giant violated privacy regulations with the ID that iphone smartphones generate that helps advertisers track users for targeted ads.

The case was filed against Apple in Spain and Berlin through Schrems’ non-profit privacy rights organization Noyb.

Apple in September introduced a new policy with the launch of iOS14, which impacted existing IDFA. The advertising industry assigns a unique code to each device called Identification for Advertisers (IDFA). Advertisers use IDFAs to determine if their ads are effective, especially when the ad has been served in multiple places.

The new policy means that advertisers will be required to ask for users’ permission before they could be allowed to harvest personal data for targeted ads. Alternative to this procedure will require setting up a completely new advertising account to run campaigns for iOS users.

The idea behind the tool is to improve user privacy by stopping advertisers from using other identifiers to track users, and allowing users to reset the IDFA at will.

In its argument, Noyb said generating the IDFA could breach EU privacy laws because it was created without the user’s “knowledge or consent.” The privacy rights group argued that while users are given control over whether to reset the identifier, and allowed to prevent individual apps from accessing it, they cannot prevent it from being generated in the first place.

“EU law protects our devices from external tracking,” said Stefano Rossetti, a privacy lawyer at Noyb. “Tracking is only allowed if users explicitly consent to it. This very simple rule applies regardless of the tracking technology used. While Apple introduced functions in its browser to block cookies, it places similar codes in its phones, without any consent by the user. This is a clear breach of EU privacy laws.

“With our complaints we want to enforce a simple principle: trackers are illegal, unless a user freely consents. The IDFA should not only be restricted, but permanently deleted. Smartphones are the most intimate device for most people, and they must be tracker-free by default.”

Although Apple denied any of the claims, saying the allegations are “factually inaccurate”, Noyb’s lawsuit and Italy’s fine underline a new scrutiny movement that is garnering momentum in Europe against American tech companies.

Apple said the objective of the new policy has been only to protect the privacy of users by giving them more control to choose what happens in their devices.

“Our aim is always to protect the privacy of our users and our latest software release, iOS 14, is giving users even greater control over 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,” it said.

The EU private law is regulated by General Data Protection Regulation (GDPR), which places the jurisdiction to act in the hands of the Irish data protection authority due to the location of the company’s EU’s HQ. Apple is hoping to prove the case is unfounded with GDPR. But Noyb’s complaint is based on the older e-privacy directive, which means that Germany or Spain could decide whether to directly fine Apple if it is found guilty.

The iOS 14 came under heavy criticism from other companies like Facebook which said “it will disproportionately affect Audience Network… and impact advertisers’ ability to serve targeted ads”.

However, Apple has come under the spectacle of European regulators following its winning of the appeal of a $15 billion EU imposed tax fine in July, and each country in the bloc is discovering antitrust concern one at a time.

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