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Apple faces rare $8.5 million fine for illegal data collection

A padlock next to the iOS logo.

Photo: rafapress (Shutterstock)

Your iPhone protects your privacy — from everyone except Apple, apparently.

France’s data protection authority, CNIL, fined Apple €8 million (about $8.5 million) on Wednesday for illegally harvesting data from iPhone owners for targeted ads without proper consent.

It’s an unusual sanction for the iPhone maker, which has faced fewer privacy-related legal penalties than its Big Tech competitors. Apple makes privacy a selling point for its devices, touting “Privacy. That’s the iPhone.” on 40-foot billboards around the world. The French fine, however, is the latest addition to a growing body of evidence that Apple may not be the guardian angel of privacy he makes himself be.

Apple failed to “obtain the consent of French iPhone (iOS 14.6 version) users before depositing and/or writing identifiers used for advertising purposes on its terminals,” the CNIL said in a statement. The CNIL fine draws attention to search ads on Apple’s App Store specifically. a french court fined the company more than $1 million in December about its App Store-related business practices.

“We are disappointed with this decision as the CNIL has previously acknowledged that the way we serve search ads on the App Store prioritizes user privacy and we will appeal,” an Apple spokesperson said. “Apple Search Ads goes further than any other digital advertising platform we know of, giving users a clear choice as to whether or not they want personalized ads.”

You might not think of Apple as an advertising company, but that could change in the near future. Apple does a good advertising business that will bring in about $5.4 billion this year, according to analyst firm Insider Intelligence. Apple runs ads on several of its services, including the App Store, and reports suggest the company is in talks to bring ads to Apple TV. This ad business is expected to grow tremendously in the near future. After paralyzing Facebook’s advertising network with a powerful iPhone privacy setting in 2021, Apple is in the perfect position to expand its growing advertising empire.

Many of Apple’s ads are targeted, as are those run by competitors the company likes to criticize. Apple shows these targeted advertisements and collects the relevant data with your permission. But that’s where Apple got into trouble with the French.

With iPhones running iOS 14.6 and below, Apple’s personalized advertising privacy setting has been turned on by default, leaving users to seek control on their own if they want to protect their information. This violates EU privacy law, according to the CNIL. However, it does not cross Europe’s GDPR; the breach falls under the more obscure Electronic Privacy Directive of 2002.

Newer versions of the iPhone’s operating system fixed the issue by presenting users with a prompt before advertising data was collected.

“Apple has finally been caught in the act: the same companies that have been telling us how their products and services are at the forefront in terms of data protection are blatantly violating applicable law,” said Nicolas Rieul, president of Alliance Digitale, a French data protection company. digital marketing. trade group in declaration. “This is a real problem of misleading and misleading advertising on a larger scale, which we invite the French authorities to address.”

As Apple grows its advertising business, the company faces more scrutiny for its less-than-perfect privacy practices. A recent investigation found that Apple collects analytics data even when the company’s own analytics privacy setting It’s off. Apple faces a class lawsuit on the matter, and Alliance Digitale’s Rieul told Gizmodo that his organization is pushing the CNIL to pursue regulatory action as well.

Eight million euros is crumbs for a company that earns billions a year from advertising alone and is so inconceivably rich that it had enough money to lost $1 trillion in market value last year— making Apple the second company in history to do so. The fine could have been higher had it not been for the fact that Apple’s European headquarters are in Ireland rather than France, giving the CNIL a smaller target to pursue.

Still, it’s a sign that Apple may face a less-than-friendly regulatory future in Europe. Trade authorities are investigating Apple for anti-competitive business practices and are even forcing the company to ditch its proprietary charging cable in favor of USB-C ports.