The French competition watchdog has formally objected to Apple's practices, accusing the iPhone manufacturer of exploiting its leading market position to dictate terms concerning the use of personal data for promotional purposes.

The competition authority, or AdlC, confirmed on Tuesday it had initiated an investigation into Apple's advertising data practices, with the tech giant's App Tracking Transparency, or ATT, privacy policy program the focus of scrutiny.

The agency cited concerns the United States-based company could have infringed rules linked to the use of iPhone user data for advertising purposes.

In 2020, four French advertising groups lodged a grievance against Apple regarding the implementation of its ATT program, which allows users some control over the ability of apps to track and relay data, and which could be harnessed by advertisers for personalized marketing, reported Reuters news agency.

The advertisers contended that Apple's changes did not align with European Union privacy regulations, a claim that Apple refutes.

The ATT mandates developers to seek user consent if they intend to "track" user activities across different apps, noted the Financial Times newspaper. This tracking is a prevalent method for constructing a user's digital profile and targeting them with customized advertisements, it said.

In its statement, the French regulatory body said Apple might "abuse its dominant position by implementing discriminatory, nonobjective and non-transparent conditions for the use of user data for advertising purposes".

Apple denied this is the case, and in a statement insisted it holds its advertising business "to a higher standard of privacy than it requires of any other developer by prompting users for explicit permission before delivering any personalized ads."

Apple's statement said: "App Tracking Transparency gives users more control by requiring all apps to ask permission before tracking them. Apple, like all developers, is required to comply with ATT.

"Apple's apps do not show an ATT prompt because they do not track, meaning they do not link user or device data with user or device data collected from other companies' apps, websites, or offline properties for targeted advertising or advertising measurement purposes, nor do they share user or device data with data brokers."

Market research organization Evercore ISI projects that the revenue from iPhone's ads will surge from $5 billion in 2022 to $30 billion by 2026, reported the FT, noting Apple itself has described its ads business as "incredibly fast-growing".

The French watchdog's statement starts an antitrust process, during which Apple will have the opportunity to present its view.

"We have previously received strong support from regulators and privacy advocates" on the ATT policy's goal, Apple said. "We will continue to engage with the (French authorities) constructively to ensure users remain in control of their data."