Apple’s biggest mid-cycle operating system update ever, iOS 14.5 just released yesterday, ready for download. While the iOS update has tons of cool new features in store for you, the one which is bound to ruffle the most feathers is App Tracking Transparency (ATT)— where app developers need a user’s consent in order to track and share their IDFA (Identifier for Advertisers) for cross-property ad targeting purposes- and people are going crazy!

The announcement coincides with Data Privacy Day, in addition to a report released by Apple, titled “A Day in the Life of Your Data”, which explains how users are actually tracked and targeted. Apple has repeatedly championed people’s right to their personal data, and this move is geared toward keeping people’s information safe and protected and embed privacy in every piece of technology. Privacy is about choice—ad targeting isn’t all bad, considering that people actually opt-in of their free will. While Limited Ad Tracking (LAT) has been implemented in iOS devices for many years, this iOS update changes things from a privacy perspective.

What exactly is App Tracking Transparency?

Apple’s new policy can be construed as the reversal of the old method of opting out of sharing your IDFA with advertisers. IDFA is a unique identifier that is used to track a user’s activity between apps – For instance, if you look up a product on Amazon or Flipkart, chances are you will be bombarded with ads targeting the same or similar products on other apps like Facebook as well. However, under this opt-in method, every app has to seek user’s permission for tracking them across iPhone apps and services and sharing their IDFA with data brokers. Showing targeted advertisements based on user data collected from other apps, sharing address or email IDs with a data broker, or adding third-party SDKs to target advertising without explicit user consent are all considered a breach under the new policy.

After upgrading to iOS 14.5, expect to see a standardized pop-up box for every mobile application at various points of usage, that says “Allow X to track your activity across other companies’ apps and websites?” followed by a customized explanation from the developer. You can either opt-in with “allow” or choose “Ask App, not to Track”. If you choose the latter, the mobile application will lose access to the IDFA. The idea is to let users garner a clear understanding of why they are being asked to be tracked across apps and websites and then decide themselves.

It doesn’t only stop at IDFA though; developers will not be able to use any other identifiers, such as hashed email addresses, to track users and share that information with third parties. If a developer attempts to track users who have not opted-in, Apple will take a firm stance and block the app from the App Store. The Tracking transparency policy puts users in the driver’s seat as far as their data is concerned. After, ATT is all about transparency and control.

Almost 70% of IOS users inadvertently share their IDFA with app publishers, sometimes to assess the full capabilities of an app. After this change, it’s estimated that this number will drop to 10% to 15%. Apple will also keep a lookout for developers who try to coax users into complying, such as withholding certain app functionality from users who don’t agree to opt-in or incentivizing users with in-app perks to sway their decision.

While the app makers can still use the information that you have willing divulged to create targeted advertising campaigns even if you opted out of being tracked, this information cannot be shared with a third party, according to Apple’s new policy. You can even toggle IDFA sharing on a by-app basis. Each app that has requested permission to track shows up on the tracking menu and you will be at liberty to toggle app tracking on and off. If you don’t want to keep receiving permission messages, you can even enable app tracking across all apps with a single toggle and bypass the Tracking transparency policy altogether.

Facebook’s Reaction to ATT

This move by Apple has drawn some criticism from the ad industry, with Facebook being unabashedly vocal about the negative impact of this change on small businesses who use targeting and Facebook’s powerful ad network to run effective ad campaigns. Facebook has even accused Apple of introducing the Tracking transparency policy to benefit their own bottom-line. Facebook ran full-length newspaper campaigns against the upcoming iOS update. While this privacy policy is bound to change the way small advertisers collect data, it is the data-hungry giant Facebook that gets the worst of it. Facebook has been leveraging the IDFA to test the effectiveness of ad campaigns. We see ads on Facebook, look up the brand’s website, and end up buying the product. With IDFA tracking, this data is used, collected, analyzed, and leveraged to run personalized ad campaigns. However, the iPhone maker says the rules will also apply to its own apps and users can even choose to toggle off the personalized advertising the company serves within the App Store, with the help of first-party data.

What is Apple Doing to Facilitate Businesses?

There was an initial concern that the new iOS update will push businesses to resort to shadowy techniques such as fingerprinting instead of the IDFA, but Apple has offered a privacy-preserving, transparent replacement. Apple has introduced its SKAdNetwork which keeps track of the number of times a user installed an app after seeing an ad for it, letting advertisers measure which creatives are most effective. Apple has also introduced Private Click Measurement, which gauges the effectiveness of ad clicks in-app that then navigate to the web without linking back to them.

Regarding the pushback received by the company, Apple’s Senior Vice President for Software Development, Craig Federighi says “It wasn’t surprising for us to hear that some people are going to push back on this, but at the same time, we were completely conscious that it is the right thing to give users a choice here. We’re always considering the right things primarily from a customer’s perspective.”