BERLIN, Feb 13 (Reuters) - The German antitrust

authority has charged Apple ( AAPL ) with abusing its market

power through its app tracking tool and giving itself

preferential treatment in a move that could result in daily

fines for the iPhone maker if it fails to change its business

practices.

The move follows a three-year investigation by the Federal

Cartel Office into Apple's ( AAPL ) App Tracking Transparency feature,

which allows users to block advertisers from tracking them

across different applications.

The U.S. tech giant has said the feature allows users to

control their privacy but has drawn criticism from Meta

Platforms ( META ), app developers and startups whose business

models rely on advertising tracking.

"The ATTF (app tracking tool) makes it far more difficult

for competing app publishers to access the user data relevant

for advertising," Andreas Mundt, cartel office president, said

in a statement.

Apple ( AAPL ) defended the feature in an emailed statement to

Reuters, adding that it "holds itself to a higher standard than

it requires of any third-party developer."

"We ... will continue to constructively engage with the

Federal Cartel Office to ensure users continue to have

transparency and control over their data," it added.

Apple ( AAPL ) will be required to address the concerns set out in

the German charge sheet or risk further proceedings and daily

fines if it fails to do so by the time of a final ruling which

could come this year but is more likely to land next year.

The case was triggered by complaints from associations

representing publishers, broadcasters, advertisers, their

agencies and ad tech firms.

"Today's charges are groundbreaking. Apple's ( AAPL ) measures had

created an artificial opacity in its ecosystem that led to less

choice, higher costs for apps, and less protection against ad

fraud, all while boosting Apple's ( AAPL ) revenues from services," said

Thomas Höppner, partner at law firm Hausfeld, which represents

the complainants.

"For the first time it has been clarified that Apple ( AAPL ) may not

rely on pretextual privacy arguments to massively restrict

competition in its favor," he said.

Companies found guilty of breaching Germany's antitrust

rules risk fines as much as 10% of their annual turnover.