Apple and the Antitrust in Germany

The German antitrust regulator has launched an inquiry into Apple’s App Store. The Bonn-based Federal Cartel Office (FCO) says it will determine whether Apple has abused its market dominance. The watchdog will determine whether Apple has a fundamental significance in the markets that limits any competition. This decision echoes the European Commission’s Antitrust Separation regarding the policies and practices of the Apple App Store.

What is the problem?

The ECAD found that Apple distorted competition in the song streaming market.

“This preliminary hearing has been the result of a 10-month investigation by the commission initiated thanks to numerous complaints filed by Spotify.”

The ECAD found that Apple forcing Spotify and other song participants to use its payment system was a form of market dominance. Both main objects raised include refuting the forced use of in-app purchase systems and preventing application developers from informing customers about other payment options. It appears that the FCO’s antitrust inquiry in Germany worked to decide whether Apple abused its market dominance.

“A key focus of the inquiry will be the performance of the App Store, as in many cases it enables Apple to influence the operations of third parties”

says FCO Chairman Andreas Mundt. Apple is the fourth major technology organization to face an antitrust probe in Germany.

The FCO

The FCO is also investigating Google, Facebook and Amazon for antitrust violations. In the first month of the year, the German parliament passed legislation to make it easier for the German regime to regulate the market power of monumental technology platforms.

“What we’re going to try to do with all of the technology giants is we’re going to try to detect the anti-competitive conduct, or more importantly, in the business cases of these organizations and put an end to it”

says Mundt. The European Commission released its new rules to regulate giant technology organizations in the last month of the year. Under his initiative, the EU could impose massive fines on any tech organization that fails to remove illegal content or treats rivals unfairly.

The European Commission heard complaints against Apple from some companies, including Epic Games, Telegram, ZAW, Spotify and Match Group. Apple has already responded to several of the antitrust accusations made by Spotify by opening up its ecosystem. You can now play music from Spotify using Siri, as long as you have updated to iOS 14.5.

Other changes include allowing Apple users to set new default browsers or mail consumers in settings. Still like this, there is no way to set a default song app in Settings. Apple commented that the FCO does not paint a rigorous picture of the hardware market in Germany and that the choice is not based on Apple’s true competitive strength. Despite FCO’s claims that the Apple ecosystem limits the possibilities of consumers, Apple argues that the iPhone and iPad do not remain trapped in the Apple ecosystem, but rather choose to use Apple products because of their loyalty to the company.

Conclusion

At this time, the FCO has not decided whether to start more methods against Apple. Alphabet/Google, Meta/Facebook and Amazon were previously subject to these rules. A 2021 amendment to German Competition Law gave the FCO the power to “intervene earlier and more effectively” to prevent major tech organizations from engaging in anti-competitive practices.