The Italian Antitrust Authority has recently closed two investigations against Google and Apple, issuing 10 million euro fines to both companies, the highest sum allowed by current national legislation. The Antitrust Authority ascertained two violations of the Consumer Code by each company, one for a lack of information and the other for aggressive practices linked to the acquisition and use of consumer data for commercial purposes. The two companies said they disagreed with the verdict and would appeal.  “We believe that the Authority’s opinion is wrong and we will appeal the decision. Apple has been committed to protecting the privacy of our users for a long time, and we work very hard to design products and features that protect data. We provide industry-leading transparency and control to all users, so they can choose what information to share or not, and how it’s used,” Apple stated. Google also announced: “We do not agree with the decision of the Authority and we will appeal.”

Google, according to the Authority, bases its business on offering a wide range of products and services over the Internet (which include technologies for online advertising, search tools, cloud computing, software and hardware) based on user profiling. In other words, based on user data. Similarly, the Antitrust Authority argues, Apple collects, profiles and uses user data for commercial purposes across its devices and services. Therefore, even without transferring any data to third parties, Apple directly exploits the economic value of such through promotional activities to increase the sale of its products and/or those of third parties through its App Store, iTunes Store and Apple Books platforms. “In these contexts,” the report states, “Authority has considered that there is a consumption relationship between users and the two companies, even in the absence of a monetary charge, as represented by the data they transfer using Google and Apple services.”

The Authority found that both Google and Apple did not provide clear and immediate information on the acquisition and use of user data for commercial purposes. In particular, Google, both during account creation, which is essential for the use of all the services offered, and the use of the services themselves, omits relevant information that the consumer requires to consciously decide whether or not to accept that the company collects and uses their personal information for commercial purposes. Apple, both when creating an Apple ID, and when accessing the Apple Stores (App Store, iTunes Store and Apple Books), does not immediately and explicitly provide the user with any information on the collection and use of their data for commercial purposes, emphasising only that data collection is necessary to improve the consumer experience and use of the services. 

The Authority also found that the two companies engaged in aggressive practices. In particular, during account creation, Google sets the user’s acceptance of the transfer and/or use of their data for commercial purposes as the default option. This pre-setting allows the transfer and use of data by Google, once generated, without the need for any other steps in which the user may confirm or change the company’s default settings. In the case of Apple, on the other hand, the promotional activities are based on a method for acquiring consent to the use of user data for commercial purposes without allowing the consumer the possibility of expressly deciding in advance whether or not to share their data. This acquisition architecture, prepared by Apple, does not make it possible for users to exercise their will on the use of their data for commercial purposes. Therefore, consumers are conditioned by the default settings and thus transfer their personal information, which Apple can use for its own promotional purposes out in different ways. We will see in the coming months what legal strategies the two tech giants will adopt and whether or not they will need to open their wallets.

Oscar Giacomin  / General Manager, Facto Edizioni

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