Apple Subject to 'Special Abuse Control' Says German Antitrust Regulator [Updated]

[MacRumors]

Germany's Bundeskartellamt (Federal Cartel Office or FCO) antitrust authority today announced that Apple is subject to "extended abuse control" under the German Competition Act, which means that German regulators can prevent the company from engaging in "anti-competitive practices."

FCO president Andreas Mundt said that Apple's economic position is not adequately controlled by competition, giving German authorities the right to step in.

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.

In the press release, the FCO says that Apple's two billion device active install base gives it a "strong power" to create rules for third parties, with Apple exerting control over customers and access to customers. Combined with Apple's resources, Apple is in a "position of power" that makes it subject to the aforementioned "special abuse control." This designation is valid for five years.

German regulators are already looking into Apple's ad tracking rules and App Tracking Transparency, a measure that requires apps to get explicit user consent before tracking them. The investigation began in 2022 with the aim of determining whether Apple's anti-tracking technology is anti-competitive.

At the current time, the FCO has not decided whether to initiate further proceedings against Apple. Alphabet/Google, Meta/Facebook, and Amazon have previously been subject to these rules. A 2021 amendment to the German Competition Act provided the FCO with the power to "intervene early and more effectively" to prevent major tech companies from engaging in anti-competitive practices.

In a statement to MacRumors, Apple said that it plans to appeal the decision, and that it does not agree with some of the claims used to classify the company as in a position of power.

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.

Apple said that the FCO is not presenting an accurate picture of the hardware market in Germany, and that the decision is not based on Apple's true competitive significance. Despite the FCO's claims that Apple's ecosystem limits customer choice, Apple says that iPhone and iPad are not stuck with the Apple ecosystem, but rather choose to use Apple products due to loyalty to the company.



Article Link: Apple Subject to 'Special Abuse Control' Says German Antitrust Regulator [Updated]

 

[sw1tcher]

InB4PeopleSayAppleShouldPullOutOfGermanMarket 🤣

 

[roar08]

It's unsurprising, but still a little strange to me when governments take the position to move against policies that attempt to protect privacy. It's probably a healthy blend of stupidity and corruption.

 

[coffeemilktea]

Bundeskartellamt president Andreas Mundt said that Apple's economic position is not adequately controlled by competition, giving German authorities the right to step in.

Historically, German authorities keeping a close eye on someone to make sure they don't violate some arbitrary law before stepping in has never ended badly.

 

[Realityck]

Bundeskartellamt president Andreas Mundt said that Apple's economic position is not adequately controlled by competition, giving German authorities the right to step in.

Well granted Apple lacks competition, they are the creator/developer of several OS's as well as hardware that runs those OS's. But why is a large company needing to be controlled by competition? Is this just more to the position that the App Store controls? If so that App store could change as seen at WWDC 2023 rumors.

 

[neuropsychguy]

"Bundeskartellamt says that Apple's two billion device active install base gives it a 'strong power' to create rules for third parties"

How many active devices does Apple have in Germany? Using the worldwide number as rationale for controls in Germany is poor rationale. For example, if Apple has 2 billion active devices in the world but only 50 in Germany, using the world number to allow extra control (investigation) of Apple's actions in Germany would be more than heavy-handed. Of course, the reality is there are more active Apple devices than that in Germany but using market share outside of a country for within-country regulations comes across as overreach, at best.

 

[O.N.Y.X]

Apple should be in a convenient position here- a pro customer position that is. As a customer I am quite happy about this „don’t track or profile me as long as I don’t want you to“ option given to me.

 

[nothingtoseehere]

I am writing from Germany. This is Android Country. What is the fuss our cherished Bundeskartellamt makes?

 

[MallardDuck]

Kind of ironic that one of the countries with the strongest privacy laws in the world with go after Apple for trying to enforce user privacy.

 

[contacos]

Kind of ironic that one of the countries with the strongest privacy laws in the world with go after Apple for trying to enforce user privacy.

This article does not cover the full story. It is not actually about the fact that Apple decided to hinder tracking, what they want to know or look into is why Apple is seemingly excepted from that rule and if Apple says they do not track in the first place GREAT but it doesn’t hurt to make sure this claim is true. Just like the US is still looking into TikTok, even though TikTok says they don’t share data with China


In a specific case, the Cartel Office is investigating Apple's App Tracking Transparency Framework. This ties the tracking of user behavior for third-party app providers to certain conditions and is particularly important for app providers whose offerings are financed with advertising. "In particular, the Bundeskartellamt is investigating the initial suspicion that these regulations give preferential treatment to Apple's own offers," the authority explained.

 

[robco74]

This is why doing business in the EU is a giant bag of hurt. You have the EU itself, but then you have politicians in member states that still want to implement their own rules as well.

The absurd option would be for Apple to voluntarily restrict production, sales, and subscriptions so they are no longer dominant. And/or maybe Apple and Google should each donate a few billion euro to fund European startups to create alternatives. Once local alternatives have gotten some traction, the EU can mandate that developers support them so they won't wind up like Windows Phone. Or perhaps they can mandate that Apple partner with existing services based in the EU and stop offering their own software and services there. There is no guarantee that the US and EU will agree on regulations close enough for Apple to continue to sell the same products or offer the same services everywhere.

Call me nuts, but if I were a government regulator, I would be more concerned about the ubiquity of Chrome in the desktop browser market, and how it has essentially made Google a standards body.

 

[k1121j]

Um I like not being tracked don’t turn that off

 

[bsolar]

Kind of ironic that one of the countries with the strongest privacy laws in the world with go after Apple for trying to enforce user privacy.

There is a difference between trying to enforce user privacy and using user privacy as justification for anti-competitive practices. My understanding is that the authority is fine with the former but wants to make sure Apple is not actually engaged in the latter.

 

[entropys]

Just like a selling point you mean?

 

[bsolar]

How many active devices does Apple have in Germany?

Not sure about tablets and watches, but they have about 40% share in the smartphone market, which is about the same as Samsung.

The reason Apple is under stricter control is not only due to the large market share alone though: it's also due to the high level of vertical integration they have.

 

[deevey]

It's unsurprising, but still a little strange to me when governments take the position to move against policies that attempt to protect privacy. It's probably a healthy blend of stupidity and corruption.

Especially considering EU forced usage of those insanely annoying GDPR website popups which are basically supposed to inform the user of the same things as Apple has implemented for apps.

 

[rpmurray]

Kind of ironic that one of the countries with the strongest privacy laws in the world with go after Apple for trying to enforce user privacy.

Those laws only apply to companies and individuals tracking others, but not to the government itself. Germany is just butthurt that Apple keeps them from invading the privacy of their own citizens because ... security.

 

[Vref]

Isn’t that kinda a non competitive thing for Germany to do lol

 

[theheadguy]

It's unsurprising, but still a little strange to me when governments take the position to move against policies that attempt to protect privacy. It's probably a healthy blend of stupidity and corruption.

Or maybe, just maybe, it's based on legislative framework put in place by elected politicians...

 

[ericwn]

I am writing from Germany. This is Android Country. What is the fuss our cherished Bundeskartellamt makes?

Roughly 40% market share for iOS in Germany. That’s a big number for the maker of a proprietary solution in said market.

 

[Glideslope]

Germany has far larger issues than this. Let’s prioritize down at the Beer Garden.

 

[Kar98]

Stupid Germans, as if they didn't have a million more pressing issues right now. Like making sure everything, including the referenced press piece is written in "gender just" language.

 

[Kar98]

Or maybe, just maybe, it's based on legislative framework put in place by elected politicians...

Elected politicians in Germany don't give a damp warm fart what the voters want.

 

[schneeland]

Roughly 40% market share for iOS in Germany. That’s a big number for the maker of a proprietary solution in said market.

Stastista is reporting 24% (also reflected in this Handelsblatt article).

Also, what the news here doesn't mention: all other big tech companies are already monitored (most of them since 2022, see this other Handelsblatt article). So it's more like a general pattern than specifically picking out Apple).

 

[eifelbube]

This article does not cover the full story. It is not actually about the fact that Apple decided to hinder tracking, what they want to know or look into is why Apple is seemingly excepted from that rule and if Apple says they do not track in the first place GREAT but it doesn’t hurt to make sure this claim is true. Just like the US is still looking into TikTok, even though TikTok says they don’t share data with China


In a specific case, the Cartel Office is investigating Apple's App Tracking Transparency Framework. This ties the tracking of user behavior for third-party app providers to certain conditions and is particularly important for app providers whose offerings are financed with advertising. "In particular, the Bundeskartellamt is investigating the initial suspicion that these regulations give preferential treatment to Apple's own offers," the authority explained.

Vielen Dank for this clarification.