Apple faces special antitrust abuse regime in Germany

Germany's antitrust authority has today confirmed Apple meets its test for special abuse controls -- having so-called "paramount significance for competition across markets". The designation stands for five years.

"The company holds a dominant, or at least powerful, position on all vertically related levels based on its smartphones, tablets and smart watches as well as proprietary operating systems and the App Store, the only digital distribution platform for apps and other software products available to both app publishers and users on Apple devices," it wrote in a press release.

"Based on this tight proprietary vertical structure and an installed base of more than 2 billion active devices worldwide, Apple is active in many ways on market levels and business areas that are linked to each other and is therefore in a position to tie its users to its complex ecosystem on a long-term basis. This is associated with a strong power to set rules for third parties, above all for app developers."

It's the latest designation from the Federal Cartel Office (FCO) which has already deemed Amazon, Google and Meta (Facebook) meet the market power test. Late last month it also opened an investigation of Microsoft's competitive muscle -- which remains ongoing.

The country passed the ex ante update to its domestic competition regime back in 2021, aimed at ensuring the federal regulator is empowered to tackle Big Tech's market power -- meaning it's 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.

Commenting on its Apple decision in a statement, Andreas Mundt, president of the Bundeskartellamt, added:

Apple has an economic position of power across markets which gives rise to a scope of action that is not sufficiently controlled by competition. Based on its mobile end devices such as the iPhone, Apple operates a wide-ranging digital ecosystem which is of great importance to competition not only in Germany, but also throughout Europe and the world. With its proprietary products iOS and the App Store, Apple holds a key position for competition as well as for gaining access to the ecosystem and Apple customers. This decision enables us to specifically take action against and effectively prohibit anti-competitive practices.

The designation means the FCO can act more swiftly if it sees competition concerns arising from how Apple operates its platforms and products.

Last year the regulator opened an investigation of Apple's tracking rules and its App Tracking Transparency (ATT) framework, which governs tracking permissions for third party apps running on iOS. The FCO said it's looking into an initial suspicion that these rules could favour Apple's own offers and/or impede others.

"So far, no decision has been taken on initiating further proceedings against Apple," it noted in a press release.

Apple was contacted for comment on the FCO's decision.

Update: An Apple spokesperson sent this statement -- confirming it plans to appeal:

Apple is proud to be an engine for innovation, job creation, and competition in every market where we operate. The FCO's designation misrepresents the fierce competition Apple faces in Germany, and it discounts the value of a business model that puts user privacy and security at its core. While we will continue to work with the FCO to understand their concerns, we plan to appeal their decision.

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