Making App Store compliant with GDPR
Before Europe’s data privacy law known as GDPR (General Data Protection Regulation) came into force on May 25, Apple (AAPL) took steps to ensure that its lucrative app distribution business was compliant with the new privacy regulations. The steps included removing apps that fall short of certain data handling requirements from the App Store.
The App Store is one of the two largest app distribution platforms in the world. The other is Google Play by Alphabet’s (GOOGL) Google. Apple’s gross app sales increased 34.7% YoY (year-over-year) to $38.5 billion in 2017, according to estimates by Sensor Tower. Google’s gross app sales were $20.1 billion, up 34.2% YoY.
Curbing data sharing with third parties
The App Store clampdown that Apple began in early May targeted apps that transmit user location data to third parties without proper approval from the people from whom the data are collected. Apple’s App Store guidelines prohibit apps hosted on the platform from sharing people’s data with third parties for unapproved purposes. Those guidelines only allow sharing data with third parties if the outcome is intended to improve user experience or software and hardware performance related to the app.
GDPR proposes steep fines
The European Union’s GDPR restricts how companies can collect and use people’s online data. Violations can lead to steep fines up to 4% of a company’s annual revenue. Before the GDPR was in force, Internet companies Google, Facebook (FB), Twitter (TWTR), and Microsoft’s (MSFT) LinkedIn updated their user policies to ensure that they are compliant with the new privacy law.
Apple’s App Store clampdown seems to be intended to minimize the company’s risks under the GDPR.