Your iPhone’s Next Software Update Aims to Foil App Trackers and Digital Advertisers. Here’s How

Apple’s next major software update for the iPhone is set to give users more control of their privacy—and could significantly alter the way advertisers and app developers do business.

iOS 14.5, already in the hands of beta testers and scheduled for release later this month, puts serious restrictions on the information third parties can gather from iPhone and iPad users without their permission. That data, usually used for ad tracking and targeting, is highly sought after by companies. Which is why the new privacy features are infuriating advertisers, app makers and some of Apple’s biggest Silicon Valley neighbors. Facebook has pushed back publicly against the new protections. While Google, which also uses the data in myriad ways, has resorted to less effective ad tracking measures, and avoiding triggering Apple’s new anti-tracking features.

What do Apple’s new app tracking transparency (ATT) rules do, exactly? For one, they require app developers to submit information about the user data they collect, how it will be used and whether developers will further track users and send them targeted ads. As part of the new framework, each app’s privacy policy will be prominently displayed on its App Store page, allowing users to see what data the app is using to track them, what it knows about them and whether that data is being sold to other businesses. Of course, data you willingly give over within apps, like searches and like, is still fair game and can be used without your express permission.

Apple leadership, including CEO Tim Cook and SVP of software engineering Craig Federighi, have spoken publicly about the need for increased consumer control over personal data. “At a moment of rampant disinformation and conspiracy theories juiced by algorithms, we can no longer turn a blind eye to a theory of technology that says all engagement is good engagement — the longer the better — and all with the goal of collecting as much data as possible,” said Cook at a virtual privacy-focused conference in January. The company’s even gone so far as to create a basic guide on how data collected by apps without consumers’ knowledge is used to target people in invasive ways.

Privacy advocates like nonprofit organization the Electronic Frontier Foundation say Apple’s moves are a win for consumer data protection. “The system reinforces itself by lulling consumers into the myth that it’s just ads,” says EFF’s Gennie Gebhart. “When we say it’s just ads, they are the visible tip of the iceberg of this sprawling data sharing network. It does not work in any user’s best interest.”

The App Store information is displayed in an easy-to-read label that shows which apps are collecting what data–as long as they’re being transparent, of course. Developers can make their case to users in the app before asking for permission to access private data, but “…apps must respect the user’s permission settings and not attempt to manipulate, trick, or force people to consent to unnecessary data access,” according to Apple’s guidelines.

Users won’t see much of a change otherwise. Developers and ad-based companies, however, can expect their fortunes to fall by more than a little. Companies are expecting Apple’s tightened privacy policy to make it harder for targeted ads to reach their… well, target. “Apple’s ATT changes will reduce visibility into key metrics that show how ads drive conversions (like app installs and sales) and will affect how advertisers value and bid on ad impressions,” said Google in a blog post describing changes it’s making to its ad tracking. “As such, app publishers may see a significant impact to their Google ad revenue on iOS after Apple’s ATT policies take effect.”

Facebook said it would display a prompt suggesting users enable tracking to see better personalized ads, but that the decision would have a disproportionate impact on small businesses depending on targeted advertising, a move the company says only benefits larger advertisers, including companies like Apple itself. Whether that will be enough to entice users to share intimate details like location data is an open question for the social network giant. Currently, app developers must disclose the information they’re tracking, which has led to some ridiculously long disclosure lists from apps like Facebook and WhatsApp.

With the changes, consumers become more aware of which companies want access to their data, while Apple can claim it’s protecting users from overreaching companies. The protections also help Apple to differentiate iOS from Google’s Android platform, especially for prospective buyers worried about privacy intrusions. A recent Bloomberg report detailed Google’s early efforts to create its own version of anti-tracking that would likely not require an opt-in prompt, but details are scarce.

Another worry for consumers: The data companies collect is sometimes sold under the table. The $200 billion data broker industry is lucrative, and has many unlikely bedfellows. Operators of the Weather Channel app settled a lawsuit last summer that alleged the app misled millions of customers into sharing location data. The suit also alleged that the operators sold the information to third parties without consumers’ consent. A recent Motherboard report detailed how the U.S. military’s counterterrorism branch used location data from multiple apps, including dating and prayer apps, to track users illegally.

While companies like Twitter and Snapchat have fallen in line with Apple’s new guidelines, Facebook has responded rather vociferously. The company took out full page ads in several newspapers to discuss the harm it says Apple’s ad blocking tech will have on small businesses. It also started the Good Ideas Deserve To Be Found initiative, which “highlights how personalized ads are an important way people discover small businesses on Facebook and Instagram.”

Some advertisers see opportunity in the shifting advertising landscape. To James Nord, CEO of influencer marketing agency Fohr, the changes present a chance to make brand ambassadors more important to businesses’ ad campaigns, as larger campaigns done through platforms like Facebook or Google become less effective on iOS devices. Fohr connects brands to influencers in relevant audiences, and helps them manage metrics like views, likes, and overall “effectiveness” at pushing a product.

Restricting apps’ access to user data makes targeted advertising more difficult, less effective and more expensive, which means an influencer’s predominantly “opt-in” audience of followers becomes all the more valuable. “We know what their interests are,” says Nord. To brands, that means marketing budgets might see a shift from Facebook’s pockets to a smaller, more focused group of influencers. To Nord, Apple’s established position as a hardware manufacturer allows it to use its privacy changes to its advantage–as its own marketing scheme to lure people away from competitors who make money by following your online habits.

For its part, Google is sidestepping the new change as much as possible, opting to avoid the app tracking transparency pop-up by opting to not use that Apple’s IDFA, a tool advertisers use to track users between apps, for advertising purposes. by avoiding Apple’s ad-tracking tool entirely. “When Apple’s policy goes into effect, we will no longer use information (such as IDFA) that falls under ATT for the handful of our iOS apps that currently use it for advertising purposes,” said the company in a blog post. “As such, we will not show the ATT prompt on those apps, in line with Apple’s guidance.” While the company is offering guidelines to prepare for iOS 14.5’s release, it also suggested advertisers should be ready for a “significant decrease in reach,” when it comes to advertising on iOS devices.