Apple’s Market Dominance: Germany’s Antitrust Authority Takes a Stand
Germany’s antitrust authority, the Federal Cartel Office (FCO), has confirmed that Apple has passed its test for special abuse controls, designating the company as having “paramount significance for competition across markets”. The designation will stand for five years.
Apple has a dominant position in the market for smartphones, tablets, and smartwatches, as well as proprietary operating systems and the App Store. According to the FCO, this vertical structure and an installed base of over 2 billion active devices worldwide give Apple a strong power to set rules for third parties, particularly app developers.
The FCO has previously deemed Amazon, Google, and Meta (Facebook) as meeting the market power test. It has also opened an investigation of Microsoft’s competitive muscle, which remains ongoing.
The country passed an update to its domestic competition regime in 2021 aimed at ensuring the federal regulator is empowered to tackle Big Tech’s market power, ahead of an incoming pan-EU reboot (the Digital Markets Act) which will see the European Commission designating so-called Internet “gatekeepers”, and applying a set of up-front operational rules to their businesses too, later this year.
In a statement, Andreas Mundt, president of the Bundeskartellamt, commented on the decision, saying that Apple has an economic position of power across markets which gives rise to a scope of action that is not sufficiently controlled by competition. This decision enables the regulator to take action against and prohibit anti-competitive practices.
The designation allows the FCO to act more swiftly if it sees competition concerns arising from how Apple operates its platforms and products.
Last year, the regulator opened an investigation into Apple’s tracking rules and its App Tracking Transparency (ATT) framework, which governs tracking permissions for third-party apps running on iOS. The FCO is looking into an initial suspicion that these rules could favour Apple’s own offers and/or impede others.
Apple confirmed that it plans to appeal the decision, stating that the FCO’s designation misrepresents the fierce competition Apple faces in Germany and discounts the value of a business model that puts user privacy and security at its core. While the company will continue to work with the FCO to understand their concerns, it plans to appeal their decision.
