Monday, June 21, 2021
Cross-market importance?
The Cartel Office is also tackling Apple
After the tech giants Facebook, Google and Amazon, it is now Apple. The Federal Cartel Office is initiating proceedings against the iPhone manufacturer. The competition watchdogs want to clarify whether the company has built a digital ecosystem across multiple markets.
After Facebook, Google and Amazon, the Federal Cartel Office has now also initiated proceedings against the iPhone manufacturer Apple in accordance with the new regulations for digital corporations. As the authority in Bonn announced, it is about examining a cross-market significance. A clue for such a position could be “an ecosystem extending over different markets”. Corresponding positions of power are often difficult to attack by other companies, explained the competition watchdog.
“We will now examine whether Apple has built a digital ecosystem around the iPhone with the proprietary iOS operating system across several markets,” explained the President of the Cartel Office, Andreas Mundt. Apple manufactures tablets, computers and so-called wearables – for example smartwatches – and at the same time sells “a number of device-related services”, Mundt explained.
Focus on operation of the app store
In addition to various hardware products from the group, the Services division includes the App Store, iCloud, AppleCare, Apple Music, Apple Arcade, the Apple TV + streaming service and other services. “In addition to the Group’s position in these areas, we will also deal with extensive integration across several market levels, the company’s technological and financial resources and its access to data,” said Mundt.
One focus of the investigation will be on the operation of the app store, as it enables Apple in many cases to influence the business activities of third parties. The procedure is based on new rules in competition law that have been in force since January. A key component is the modernization of abuse control – the supervisory authorities can now intervene earlier in the event of violations by large digital corporations and prohibit practices that endanger competition.
Investigations against the online network Facebook and in May against the mail order company Amazon and the Internet group Google were most recently initiated. In the case of Apple, the Cartel Office also intends, based on the first case, to “take a closer look” in a possible further case, as the authority further explained.
Association complaint from the advertising and media industry
In this regard, there were “various complaints” against potentially anti-competitive practices, explained the competition authorities. This also includes an association complaint from the advertising and media industry, which is directed against Apple’s tracking restriction of users in connection with the introduction of the iOS 14.5 operating system. The background to this is that the central associations of the German media, internet and advertising industries filed a complaint against the iPhone manufacturer with the Federal Cartel Office at the end of April.
In addition, according to the Bonn authority, the compulsion to use Apple’s own system for in-app purchases (IAP) and the associated commission rate of 30 percent are also criticized by app developers. This is, for example, the central point in the dispute between Apple and the developer of the popular video game “Fortnite”, Epic Games, which is currently being heard in court in the USA.
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