Chinese Tech Giants Build Tools To Bypass Apple’s New Privacy Controls

As Beijing works to bring China’s powerful tech giants to heel, the FT has published a report detailing how Chinese tech giants are working to override new privacy controls being introduced by Apple to help protect the privacy of iPhone users from ruthless digital advertisers.

Of course, the new privacy controls being introduced by Apple will make it harder to track iPhone users without their consent, something that both Facebook and the Chinese state see as a major problem. Pretty soon, America’s biggest social media giant might be lobbying to compare notes with the state-backed China Advertising Association.

Some of China’s biggest technology companies, including ByteDance and Tencent, are testing a tool to bypass Apple’s new privacy rules and continue tracking iPhone users without their consent to serve them targeted mobile advertisements. Apple is expected in the coming weeks to roll out changes it announced last June to iPhones that it says will give users more privacy.

Until now, apps have been able to rely on Apple’s IDFA system to see who clicks on ads and which apps are downloaded. In future, they will have to ask permission to gather tracking data, a change which is expected to deal a multibillion-dollar bombshell to the online advertising industry, and has been fought by Facebook, since most users are expected to decline to be tracked.

In response, the state-backed China Advertising Association, which has 2,000 members, has launched a new way to track and identify iPhone users called CAID, which is being widely tested by tech companies and advertisers in the country.

Per the FT, TikTok-owner ByteDance published a new 11-page guide for Chinese app developers suggesting that advertisers can use this new CAID system to track iPhone users, assuming the CAID technology has been embedded in the app. The FT managed to confirm that ByteDance and Tencent (which is also seeking to leverage CAID) are already testing the technology. While several parties are working to circumvent Apple’s new privacy controls (which, remember, threaten to hammer the digital advertising businesses of Facebook, Google and other US tech giants), Apple says it won’t grant any exemptions, potentially placing the company on the path toward a confrontation with Beijing.

“The App Store terms and guidelines apply equally to all developers around the world, including Apple,” the company said. “We believe strongly that users should be asked for their permission before being tracked. Apps that are found to disregard the user’s choice will be rejected.”

One person familiar with the situation said Apple would be able to detect which apps use the new tracking tool, but even so, it will need to tread carefully. Starting to ban apps backed by state-linked businesses could see Apple kicked out of China.

But Zach Edwards, founder of Victory Medium, a tech consultancy, said: “They can’t ban every app in China. If they did it would effectively trigger a series of actions that would get Apple kicked out of China.” Three people with knowledge of briefings between Apple and developers also said the Cupertino, California-based company would be wary of taking strong action, despite a clear violation of its stated rules, if CAID has the support of China’s tech giants as well as its government agencies. Rich Bishop, chief executive of AppInChina, a leading publisher of international software in China, suggested that Apple might “make an exception for China” because tech companies and the government are “so closely aligned”.

Fortunately, it looks like Apple has allowed for some wiggle room for Chinese apps…and others as well, since, according to the CAA, there is already demand for its workaround from European companies and advertising firms.

Meanwhile, Yang Congan, chief executive of Digital Union, a Beijing-based data privacy company, suggested that CAID had been designed to get around Apple’s rules because its tracking methods might not “uniquely” identify the user. “This is the room that the industry has left to explore,” said Yang, who suggested this grey area was intentional.

The CAA said the CAID solution “does not stand in opposition to Apple’s privacy policy” and that the association “is currently actively communicating with Apple, and the [CAID] solution has not yet been formally implemented”. CAID has been in a free demo phase for select companies in recent months. Two people briefed on the issue say Apple is aware of the tool and seems to have so far turned a blind eye to its use.

The system is intended for use by local app developers in China, but at least one French gaming group has been encouraged to apply to use it and several foreign advertising companies have already applied on behalf of their Chinese divisions, two people familiar with the matter said. CAID is scheduled to be publicly released as soon as this week, according to a person briefed on the plan.

Dina Srinivasan, a US-based antitrust scholar, said the issue highlighted how Apple’s policies alone could not solve glaring privacy issues. “The big picture is that there is simply too much money at stake,” she said. “There will always be an arms race to track consumers. Only legislation can make it stop.”

In other words, it looks like Apple’s new rules are just another exercise in pro-privacy box-checking, because actually protecting consumers’ privacy simply isn’t financially feasible anymore.