Harming Competition and Consumers under the Guise of Protecting Privacy: An Analysis of Apple’s iOS 14 Policy Updates

Abstract

Apple’s iOS 14 update represents an anti-competitive strategy disguised as a privacy-protecting measure. Apple now prohibits non-Apple apps from using information essential to providing relevant, personalized advertising, without explicit user opt-in. And users may opt-in only after they are shown an ominous and misleading prompt about “tracking,” one that Apple’s own apps and services need not display, because consumers are automatically “opted in” to Apple’s own tracking. Apple’s policy will have the pernicious effects of enhancing the dominance of iOS among mobile operating systems and the dominance of its own apps and services within the iOS ecosystem, while reducing consumer choice and devastating the free-app ecosystem.

This paper explains: (i) Apple’s dominance in mobile OSs and the competitive dynamics in the industry, including the critical role that personalized advertising plays in today’s mobile app ecosystem; (ii) how Apple’s iOS 14 updates dramatically alter today’s mobile OS ecosystem, wrongfully preference Apple’s own products and services, and help Apple protect and augment its dominance over iOS and more broadly over mobile OSs; and (iii) why such actions harm competition, and by extension, iOS users and consumers more broadly.

Keywords: ios, antitrust, competition policy, apple, platform, two sided market, antitrust economics

JEL Classification: D42, K21, L12, L40, L86