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Germany launches anti-trust investigation into Apple

The German anti-trust watchdog Federal Cartel Office (FCO) on Monday initiated an investigation against Apple based on new competition rules for large digital companies, the authority stated in a press release. FCO has already initiated similar investigations against Facebook, Amazon, and Google, over the last few months.

In January this year, Germany amended the German Competition Act (GWB Digitalisation Act) empowering the government to target the practices of large digital companies “by prohibiting companies that are of paramount significance for competition across markets from engaging in anti-competitive practices.”

What is the investigation about?

The first step of the investigation against Apple is to determine whether the company is of paramount significance across markets. “An ecosystem which extends across various markets may be an indication that a company holds such a position. It is often very difficult for other companies to challenge such a position of power,” the release stated.

“We will now examine whether with its proprietary operating system iOS, Apple has created a digital ecosystem around its iPhone that extends across several markets. Besides assessing the company’s position in these areas, we will, among other aspects, examine its extensive integration across several market levels, the magnitude of its technological and financial resources and its access to data. A main focus of the investigations will be on the operation of the App Store as it enables Apple in many ways to influence the business activities of third parties.” – Andreas Mundt, President of the FCO

What are the next steps?

If it is determined that Apple is of paramount significance across markets, the FCO will delve further by studying the specific practices of Apple. These practices include complaints received against Apple such as one “from the advertising and media industry against Apple restricting user tracking with the introduction of its iOS 14.5 operating system, and a complaint against the exclusive pre-installation of the company’s own applications as a possible type of self-preferencing prohibited under Section 19a GWB.” The watchdog will also investigate the mandatory use of Apple’s own in-app purchase system (IAP), the 30 percent commission rate the company charges, and the marketing restrictions for app developers. Some of these investigations will tie into what the European Commission is already looking into and in such cases, the Bundeskartellamt will work with the European Commission and other competition authorities in this regard.

One among many

This investigation comes at a time when multiple countries are pursuing an anti-trust investigation into big tech companies. The UK government last week launched an investigation into Apple’s and Google’s mobile ecosystems over “concerns they have market power which is harming users and other businesses.”

On June 11, US lawmakers debuted five bipartisan draft bills that are aimed at curbing the power of tech giants like Apple, Google, Facebook, and Amazon. These bills are the product of a 16-month long investigation by the House Judiciary Committee that found Big Tech companies enjoy monopoly power.

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On June 14, the Japanese government started investigating Apple and Google’s deal with Japanese smartphone makers.

The EU and the US also recently announced plans to establish a “Joint Technology Competition Policy Dialogue” focusing on approaches to competition policy and enforcement.

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