The finding that Google has ‘paramount significance across markets’ is the first such decision taken by Germany’s Federal Cartel Office
In a decision as significant as it is unexpected, Germany’s antitrust regulator has concluded that Google’s business meets the threshold for special abuse control which was established under an update to competition law targeted at digital giants and passed at the start of last year.
The finding that Google has ‘paramount significance across markets’ is the first such decision taken by Germany’s Federal Cartel Office (the Bundeskartellamt) — which has ongoing procedures assessing the same vis-à-vis the market power of Amazon, Apple and Meta/Facebook — and it stands for five years, paving the way for antitrust interventions which could prefigure incoming pan-EU ex ante rules also targeting tech giants’ overbearing market power (the Digital Markets Act).
The Bundeskartellamt holds that Google is of paramount significance for competition across markets within the meaning of Section 19a(1) GWB (Gesetz gegen Wettbewerbsbeschränkungen or the German Act Against Restraints of Competition). The company has an economic position of power which gives rise to a scope of action across markets that is insufficiently controlled by competition, the FCO writes in a press release today.
The regulator says its assessment factored in Google’s dominant market share of general search (80%+ in Germany); its market power in online advertising; its intermediating role as a gatekeeper of key services like YouTube and the Play Store on Android (which the FCO likens to ‘infrastructure’); its access to data as a result of holding so much market power — enabling it to further stoke competitive advantage via ad targeting and product development; and its market capitalization, which the regulator notes is ‘one of the highest worldwide and reflects Google’s large financial power’.
The competitive advantage resulting from this access to data and other resources, such as the ‘Google’ brand, can be used as shareable inputs in many ways across markets, it added. This makes it easier to operate, improve and expand existing services or develop entirely new ones.
Now that it has determined Google is subject to extended abuse controls these probes take on added significance — as the FCO will be able to immediately intervene against any anti-competitive behaviour it identifies.
Commenting in a statement, Andreas Mundt, president of the Bundeskartellamt, said: Since January 2021 we have a new instrument to monitor large digital companies. In less than a year, we have now taken the first official decision based on this provision and determined that Google is of paramount significance across markets.
This is a very important step since based on this decision the Bundeskartellamt can now take action against specific anti-competitive practices by Google. We have already started to look into Google’s processing of personal data and to deal with the Google News Showcase issue in more detail, Andreas said.
Per the FCO, Google is not appealing the decision — nor will it ‘deny its status as norm addressee within the meaning of Section 19a(1) GWB’ — however the regulator noted that that does not mean the tech giant ‘necessarily agrees with all the facts as established by the authority in its decision and the conclusions drawn from these facts’.
A Google spokesperson expressed confidence that the company was in compliance.
To the extent that changes are necessary, we will continue to work constructively with the Federal Cartel Office to find solutions that make it possible for people and businesses in Germany to continue using our products in ways that are helpful to them, the spokesperson said.