Apple’s New Regime: Tracing with Transparency

 Co-Authored with Ashley Goren-Gibson, Lawyer

Apple has announced upcoming privacy changes that are leading marketers to rethink their data collecting processes. Apple will soon require apps to clarify data tracking practices and obtain explicit consumer consent before allowing tracking. 

People are spending more time online, and more than half of those users are accessing the internet through mobile devices. Moreover, App Annie, a data analytics provider, found that mobile users now spend 10 out of 11 minutes of their mobile internet use on apps. 

Despite the prevalence of app use, consumers are skeptical about how their personal information may be misused. A survey conducted in 2020 by GlobalWebIndex found that almost two-thirds of social media users reported concern with how their personal information is used. Perceptions differed across social media platforms, with users reporting more trust in some social media providers over others.  

While Apple’s privacy-enhancing changes may alleviate consumer concerns,  they have generated significant pushback from companies with apps, causing Apple to delay the consent requirement from its previous release date.  Although marketers need to adjust their practices, those who also implement savvy privacy policies will improve public perception, avoid potentially costly legal exposure, and stay ahead of inevitable regulatory developments. 

How Data is Tracked

When users visit websites (or apps), “cookies” are left on their devices. Cookies store text files on devices, which help websites/apps recognize users and track their information. For example, tracking systems allow users to save products in shopping carts and have a browsing continuity experience. Cookies also enable website/app operators to collect user information and track them even outside of the operators’ platforms. 

Currently, Apple allows advertisers to use an Identifier for Advertisers (“IDFA”) to track user information.  Each IDFA is assigned to a specific device. Advertisers use the IDFA to compile information about the specific device without tying the data directly to the person’s name or contact information.  According to Apple, apps currently include an average of six “trackers” per app that collect and track information.  Although the information is intended to be anonymous, intermediaries known as “data brokers” can compile data collected from other apps and websites to create a comprehensive profile linked to an IDFA, which creates privacy concerns and mistrust with consumers, or at least those who know about this practice.

What is App Tracking Transparency? 
Apple is introducing App Tracking Transparency (“ATT”) in “early spring“ of 2021.  The ATT requires all app developers to obtain explicit consent directly from users before tracking their IDFA. Apps that track data across apps or websites will be required to include a pop-up message asking users to choose between “Allow Tracking” or “Ask App Not to Track”. Users who decline to provide consent will not be tracked when they move between services. 

The Way Forward 

Advertisers may be wary of the potential decrease in tracking capabilities.  However, the brands that embrace privacy protections will likely see the most long-term return on investment. As more and more jurisdictions introduce data privacy measures, widespread change appears to be inevitable. The public wants to know how advertisers are operating “behind the curtain” and what they are doing with personal data. Companies that lead the way and choose to implement privacy-forward policies will gain consumer trust, thereby also gaining a competitive advantage in the market. They will also reduce their risk of a privacy breach and regulatory scrutiny. 

Recommendations 

1. Give Prior Notice 

Individuals are more likely to give consent to the collection of personal information when they are not taken by surprise. App developers should take this opportunity before the changes are implemented to educate users about the upcoming changes. Companies can also use an internal prompt before the Apple pop-up, with customized wording explaining the benefits of opting-in (as elaborated on below).    

2. Use Clear and Transparent Explanations 

A key means of overcoming any consumer apprehension is the use of clear and transparent explanations for how data is used and shared. The population’s discomfort with targeting is largely based on uncertainty about how they are tracked.  Once consumers understand the benefits of tracking practices, the majority will choose to opt into the use of the targeting practices.   

Ultimately, a large segment of the population will choose to sacrifice some anonymity for the sake of convenience or a better overall experience. A study performed by Oxford Economics in 2018 found that approximately 76% of consumers accepted cookies. People are most likely to opt-in when they can trace a clear benefit from that choice, such as discounts or improved user experiences. Logically, most people prefer to see relevant, interesting advertising over meaningless noise. 

3. Maximize Customer Relationships 

Regardless of the strategies discussed above, some consumers will inevitably opt out of tracking. Companies should therefore optimize their relationships with their existing customer base, as it will likely become more costly in the short-term to try to attract new customers. App and website developers will continue to be able to collect first-party information and analyze the information from their users. App developers will therefore benefit from drawing users directly to their apps with entertaining and engaging content, and maintaining user trust

This article was originally published by The Lawyer’s Daily (www.thelawyersdaily.ca), part of LexisNexis Canada Inc.