Add OpenTelemetry and basic tracing + dev infra

[johnewart]

Adds Open Telemetry along with basic tracing of FastAPI, httpx and sqlalchemy, a convenience tracing module to start new spans, and also adds the following to nox -s dev: Prometheus (for scraping metrics later), tempo (for collecting OTel traces), memcached (for tempo), and grafana (to view metrics/traces). When your dev setup is running, you can hit http://localhost:3000 and see Grafana. On the left is 'Drilldown > Traces' which will take you to the traces view; down at the bottom is a traces tab that will show you all the traces for the service.

[vercel]

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2 Skipped Deployments

Project	Deployment	Review	Updated (UTC)
fides-plus-nightly	Ignored	Preview	Dec 23, 2025 7:28pm
fides-privacy-center	Ignored		Dec 23, 2025 7:28pm

[greptile-apps]

Greptile Summary

This PR adds OpenTelemetry distributed tracing support to Fides, including:

• New TracingSettings configuration for enabling/disabling tracing with options for OTLP endpoint, protocol, sample rate, and instrumentation toggles
• Instrumentation for FastAPI, SQLAlchemy, httpx, and Redis
• A convenience trace_span context manager for custom spans
• Docker infrastructure for local development: Tempo (trace collection), Prometheus (metrics), Grafana (visualization), and Memcached

Key Issues Found:

• Port 3000 conflict between Grafana and fides-ui services will prevent both from running simultaneously
• The sample_rate configuration option is defined but ignored - traces use hardcoded ALWAYS_ON sampling
• Several unused imports and variables in tracing.py

Confidence Score: 3/5

• PR has a port conflict that will cause issues in dev environment, and dead code that should be cleaned up
• The port 3000 conflict between Grafana and fides-ui is a blocking issue for dev environment. The sample_rate config being ignored is misleading to users. Tracing is disabled by default so production is safe.
• docker/telemetry/docker-compose.yml (port conflict), src/fides/telemetry/tracing.py (unused code and ignored config)

Important Files Changed

Filename	Overview
src/fides/telemetry/tracing.py	New OpenTelemetry tracing module with unused imports, dead code (sample_rate config ignored), and an unused variable.
docker/telemetry/docker-compose.yml	New telemetry stack docker-compose with port 3000 conflict with fides-ui service.
src/fides/config/tracing_settings.py	New TracingSettings configuration class with sample_rate field that is not honored in implementation.
docker-compose.yml	Added telemetry services as dependencies with port 3000 conflict between fides-ui and grafana.
src/fides/api/app_setup.py	Added tracing initialization with import not at the top of file (import mixed with other imports).
requirements.txt	Added OpenTelemetry dependencies with pinned versions.

[greptile-apps]

_{17 files reviewed, 5 comments}

_{Edit Code Review Agent Settings | Greptile}

[greptile-apps]

style: Unused import - OTLPSpanExporter is imported here but local imports are used inside _create_otlp_exporter instead.

[greptile-apps]

style: Unused import - ParentBasedTraceIdRatio is imported but never used (commented-out code on line 110).

[greptile-apps]

style: exporter variable is assigned but never used.

[codecov]

Codecov Report

❌ Patch coverage is 49.50980% with 103 lines in your changes missing coverage. Please review.
✅ Project coverage is 85.49%. Comparing base (f8da0a0) to head (a1be108).
⚠️ Report is 3 commits behind head on main.

Files with missing lines	Patch %	Lines
src/fides/telemetry/tracing.py	38.75%	83 Missing and 15 partials ⚠️
src/fides/api/db/ctl_session.py	50.00%	2 Missing and 1 partial ⚠️
src/fides/api/db/session.py	77.77%	2 Missing ⚠️

Additional details and impacted files

@@            Coverage Diff             @@
##             main    #7163      +/-   ##
==========================================
- Coverage   87.17%   85.49%   -1.69%     
==========================================
  Files         534      536       +2     
  Lines       35312    35515     +203     
  Branches     4113     4142      +29     
==========================================
- Hits        30783    30362     -421     
- Misses       3638     4221     +583     
- Partials      891      932      +41     

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