Apple Hit With $2.7 Billion UK Lawsuit Claiming Its Privacy Rules Favored Its Own Ads

Apple is facing a $2.7 billion lawsuit in Britain accusing the iPhone maker of using its privacy rules to place tighter restrictions on outside app developers than on its own services, allegedly giving its advertising business an unfair advantage.

The proposed collective action, filed Thursday at London's Competition Appeal Tribunal, targets Apple's App Tracking Transparency system, known as ATT. The case seeks about £2 billion on behalf of thousands of UK app developers allegedly harmed since Apple introduced the feature in 2021.

Apple denies the allegations. The company says ATT gives users a simple way to control whether apps can track their activity across other companies' apps and websites and maintains that Apple is bound by the same requirements as other developers.

ATT requires apps that want to track users across other companies' services to first ask for permission through an Apple-designed prompt. The system significantly changed how developers could collect data used for targeted advertising and to measure whether ads were effective.

The lawsuit argues that Apple imposed stricter requirements on third-party developers while its own services were not subject to the same restrictions, giving Apple's advertising ecosystem a competitive edge.

The developers say the difference hurt businesses that rely on advertising revenue and made it more expensive for apps to attract new users.

At the heart of the case is not whether Apple can protect the privacy of iPhone users. The legal fight is over whether Apple used its control of the platform to apply those protections unfairly.

Competition law generally allows companies to set rules for products and platforms they operate. Problems can arise when a company with significant market power is accused of imposing restrictions on other businesses while giving its own competing services more favorable treatment.

The action is being led by ATT Collective Action Limited and its director, Ann Pope, a former senior director for antitrust at Britain's Competition and Markets Authority.

Pope said Apple's policy caused significant harm to businesses that depend on the company as a gatekeeper and argued that privacy protections should not allow digital platforms to operate under different rules from the businesses that rely on them.

The proposed class is estimated to include about 13,000 UK app developers. Many are small businesses that earn money through advertising or spend money promoting their apps to acquire new users.

The case comes after years of scrutiny of Apple's App Tracking Transparency system across Europe.

French, Italian, German and Polish competition authorities have investigated the framework or Apple's use of it. German regulators accused Apple of applying different privacy standards to its own services and third-party apps, and Apple agreed in August to make changes to its consent system.

Those regulatory actions do not establish that Apple violated British competition law. The UK lawsuit is a separate proceeding, and the developers will have to prove their allegations before the Competition Appeal Tribunal.

The claim adds to broader legal scrutiny over Apple's control of the iPhone ecosystem, including the rules it sets for developers whose businesses depend on access to its devices and App Store.

Before the developers can pursue the £2 billion claim, the Competition Appeal Tribunal must first approve the case to proceed as a collective action.