Apple is becoming an ad company despite privacy claims

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For years, Apple watched Google and Meta make billions by collecting every scrap of people’s data to target them with ads. Now it appears it was just taking notes.

Apple’s advertising operation follows the surveillance capitalism model of its rivals, using data it collects from various Apple services and your Apple account to show you ads in the App Store as well as its News and Stocks apps. Notably, these are all platforms or services that Apple has complete control over, allowing it to lock out its competitors. 

Apple currently brings in roughly $4 billion from advertising(new window) and is forecasted to bring in as much as $30 billion by 2026(new window). While these amounts are an order of magnitude smaller than the $210 billion Google made from its ad services, they represent a change in philosophy for Apple, which only earned around $300 million for ads in 2017(new window).

This new emphasis on advertising also undermines Apple’s claims about privacy with its App Tracking Transparency (ATT) feature and its “Privacy. That’s iPhone” ad campaign. In fact, it appears ATT may have been more about blocking competitors than protecting user privacy. Since Apple introduced ATT, its ad revenue has skyrocketed, leading German regulators to investigate(new window) Apple to see if it’s abusing its power.

How Apple’s tracking works

On Nov. 20, a pair of iOS developers known as Mysk(new window) discovered that Apple has a specific identifier (a “directory services identifier” or DSID) for every Apple iCloud account. It uses DSID to collect detailed information about your behavior in Apple apps and the App Store, and there’s no way for you to turn it off. 

This technically doesn’t violate Apple’s privacy policy because it has multiple privacy policies, one for its device, one for the App Store, and one for each Apple app. The Apple device privacy policy(new window) states that Apple doesn’t collect personal information or it anonymizes it. 

However, the privacy policies for the App Store(new window) and the Apple News(new window) and Stocks(new window) apps all state plainly that those services collect a wealth of information about your “browsing, purchases, searches, and downloads”. It goes on to say, “These records are stored with IP address, a random unique identifier (where that arises), and Apple ID when you are signed in to the App Store or other Apple online stores”.

Apple monitors your every move in the App Store and its News and Stocks apps and then uses that data to sell ads targeting you in those same apps. To meet its growth forecasts, experts expect Apple to start selling ads in its Maps, Podcast, and Books apps, meaning it could replicate this model across more of its services. Much more of your activity could be monitored in the future.

You can disable ad personalization on your iPhone. However, this doesn’t prevent the App Store or News and Stocks apps from collecting and using your data, nor does it prevent Apple from using other information it has on you, such as your network provider or device type, for ads. 

Apple’s App Tracking Transparency and walled garden give it an ad-vantage

This all might seem surprising given Apple’s various claims about privacy, “What happens on your iPhone stays on your iPhone”, and ATT. However, ATT targeted a very specific niche of data collection. An app only needs to ask your permission to collect data if it has trackers that follow you outside the app(new window) onto another app or website. ATT doesn’t prevent companies from monitoring your activity within an app and collecting that data, like Apple does with the App Store and its News and Stocks apps. 

Still, this limited tracker blocking has had an effect. Meta predicted it would lose $10 billion in ad revenue(new window) in 2022 because of ATT. Twitter, Snap, YouTube, and data brokers have also complained that ATT gives Apple an unfair advantage. But Apple’s walled garden is equally important to Apple’s rapidly forming ad empire.

Take the App Store as an example. The App Store is the only way to get apps on your iPhone or iPad. Now that third-party trackers have been eliminated, Apple is the only company that has access to users’ behavior in the App Store. And it is using its data and captive audience to great effect. According to reports, Apple’s search ads in the App Store were responsible for driving 58% of app downloads(new window) attributable to ads in Sept. 2021, up from 13% in Jan. 2020.

Apple wants to keep your data for itself

Unfortunately, this is another example of Big Tech introducing privacy measures that prevent competitors from accessing your data so that it can keep it all for itself. To these companies, privacy means “no one can access your information but us”.

This type of reasoning eventually spills over into other fields as well. Apple originally made its name by offering an unrivaled user experience on its devices. However, the logic of a walled garden means you can serve ads in places you know people must go and where no competitors can reach. That’s how you end up with ads in a Settings menu. 

Right now, Big Tech is telling internet users they can choose which data captor they want and calling it freedom. But the only way to be truly free and private is to choose services that treat you like a person rather than a product. 

We began Proton, not because we wanted to find the most efficient way to sell ads, but because we wanted to give everyone the ability to protect and control their information. We don’t want your data, which is why we encrypt as much of it as possible and only make money through paid subscriptions to our premium plans. 

At Proton, privacy means what it really means. No one but you can access your information. Period.

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Richie Koch

Prior to joining Proton, Richie spent several years working on tech solutions in the developing world. He joined the Proton team to advance the rights of online privacy and freedom.

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