Apple Delays iPhone Opt-In Privacy Feature in Reprieve for Facebook, Snapchat Ad Businesses

Apple IDFA iOS 14 Privacy delay
Courtesy of Apple

Apple is holding off on its requirement that app developers get opt-in permission before tracking iPhone users, which had been set to go into effect with the release of iOS 14 this fall. After complaints from partners, the tech giant Thursday said it will delay that requirement until early 2021.

Analysts said Apple’s postponement of the opt-in privacy requirements, specifically for access to the Identifier for Advertisers (IDFA), will give app publishers like Facebook, Snapchat and Zynga more time to comply with the new rules — and avoid a potentially sizable drop in Q4 ad revenue. The current iOS 13 operating system provides opt-out privacy features, and the move to require explicit consent from users to allow apps to track them is expected to significantly curtail the ability for advertisers to use IDFA.

Last week, Facebook said Apple’s opt-in IDFA change with iOS 14 could cut revenue for third-party publishers in its Audience Network by more than a 50%. “In reality, the impact to Audience Network on iOS 14 may be much more, so we are working on short- and long-term strategies to support publishers through these changes,” the company said in a blog post.

“Like all ad networks on iOS 14, advertiser ability to accurately target and measure their campaigns on Audience Network will be impacted, and as a result publishers should expect their ability to effectively monetize on Audience Network to decrease,” Facebook said in a blog post. “Ultimately, despite our best efforts, Apple’s updates may render Audience Network so ineffective on iOS 14 that it may not make sense to offer it on iOS 14.”

Now Facebook and others have a few more months to get prepared for the change. In a Sept. 3 update for developers, Apple said, “We are committed to ensuring users can choose whether or not they allow an app to track them.” However, the company said, “To give developers time to make necessary changes, apps will be required to obtain permission to track users starting early next year. More information, including an update to the App Store Review Guidelines, will follow this fall.”

At least for the fourth quarter, the delay in the opt-in privacy requirement in iOS 14 (expected to be released later this month) will remove uncertainty for how it will affect iOS app developers’ ad revenue, Morgan Stanley analyst Brian Nowak wrote in a research note Friday.

Investors have been “most tactically concerned” about the impact on Facebook, Snap and game publisher Zynga, according to Nowak. Companies will have more time to develop and scale alternative solutions for iOS 14.

The delay, Nowak added, “is an important statement by Apple about its willingness to respond to community feedback and its commitment to app developers” — and it’s particularly notable given recent controversies over the App Store and its mandated 30% fee for all in-app purchases, which prompted “Fortnite” developer Epic Games to sue Apple, which has revoked Epic’s developer access.

Apple originally announced several privacy changes to iOS 14 at its virtual World Wide Developer Conference in June. Under the now-postponed tracking rule, iOS apps (and those for iPadOS and tvOS) will be required to obtain user permission to track users across apps or websites owned by other companies, or to access the device’s IDFA advertising identifier.

Other privacy updates for iOS 14 will remain in effect. Those include requiring developers to self-report privacy summaries for their apps in the App Store, and the ability for users to get more details into an app’s use of the microphone and camera. Also, iOS 14 will let users share only their approximate location (in addition to the option of blocking that altogether).

In another major change in iOS 14, the new software will let iPhone users set third-party email and browser apps as the defaults, in place of Apple’s own mail and Safari browser apps.