Apple’s entrance into the mobile advertising marketplace was born with their announcement of iAd. Alongside iAd comes persistent locational surveillance of Apple’s customers for the advantage of advertisers and Apple. The company’s advertising platform is controversial because Apple gives it a privileged position in their operating system, iOS4, and because the platform can draw on an iPhone’s locational awareness (using the phone’s GPS functionality) to deliver up targeted ads.

In this post I’m going to first give a brief background on iAd and some of the broader issues surrounding Apple’s deployment of their advertising platform. From there, I want to recap what Steve Jobs stated in a recent interview at the All Things Digital 8 concerning how Apple approaches locational surveillance through their mobile devices and then launch into an analysis of Apple’s recently changed terms of service for iOS4 devices as it relates to collecting, sharing, and retaining records on an iPhone’s geographic location. I’ll finish by noting that Apple may have inadvertently gotten itself into serious trouble as a result of its heavy-handed control of the iAd environment combined with modifying the privacy-related elements of their terms of service: Apple seems to have awoken the German data protection authorities. Hopefully the Germans can bring some transparency to a company regularly cloaked in secrecy.

Apple launched the iAd beta earlier this year and integrates the advertising platform into their mobile environment such that ads are seen within applications, and clicking on ads avoids taking individuals out of the particular applications that the customers are using. iAds can access core iOS4 functionality, including locational information, and can be coded using HTML 5 to provide rich advertising experiences. iAd was only made possible following Apple’s January acquisition of Quattro, a mobile advertising agency. Quattro was purchased after Apple was previously foiled in acquiring AdMob by Google last year (with the FTC recently citing iAd as a contributing reason why the Google transaction was permitted to go through). Ostensibly, the rich advertising from iAds is intended to help developers produce cheap and free applications for Apple’s mobile devices while retaining a long-term, ad-based, revenue stream. Arguably, with Apple taking a 40% cut of all advertising revenue and limiting access to the largest rich-media mobile platform in the world, advertising makes sense for their own bottom line and its just nice that they can ‘help’ developers along the way… Continue reading