Bundeskartellamt opens proceedings against Apple regarding tracking rules for third-party apps

Today, the Bundeskartellamt has opened antitrust proceedings to examine allegations whereby Apple gives preferential treatment to Apple’s own offerings and/or hinders other providers with regard to the tracking of users – interestingly, these proceedings are “based on Section 19a (2) Sentence 1 GWB and Article 102 TFEU”, even before the proceedings against Apple initiated in June 2021 to establish an overriding market impact on competition have been concluded.

The new Section 19a GWB (the German Act against Restraints of Competition), which was only introduced in 2021 by the GWB Digitisation Act (10th GWB amendment), is intended to enable the Bundeskartellamt to intervene earlier and more effectively, in particular against conduct by large digital corporations: In a two-stage procedure, it will first be determined by¬†means of a Bundeskartellamt order that a company is of “paramount significance for competition across markets”; this determination is limited to five (5) years. Subsequent to such a finding, the Bundeskartellamt can, in a second step, preemptively prohibit said company to engage in conduct that may harm competition, in particular from favouring its own offers over the offers of its competitors or from impeding other companies in their business activities – during the five-year period of the finding, no separate abuse proceedings under cartel law will be required in each individual case and nor will the conduct have to be found abusive in each individual case beforehand.

In June 2021, the Bundeskartellamt opened proceedings against Apple – as the last of the four largest digital companies, often referred to as GAFA (Google, Amazon, Facebook, Apple) after their (former) initials – under the first stage of the central new provision of Section 19a GWB, which has not yet been concluded.

The outstanding of a decision finding Apple to be of paramount significance for competition across markets notwithstanding, the Bundeskartellamt is now investigating – inter alia “based on Section 19a (2) Sentence 1 GWB” – the allegation that the tracking regulations as well as Apple’s App Tracking Transparency Framework (ATT) give preferential treatment to Apple’s own offers and/or hinder other companies. Tracking makes user preferences traceable and enables advertisers or app providers to use personalised advertising, measure the success of advertising or collect and use user data for other purposes – and is therefore particularly relevant for providers of third-party apps whose business model aims to make apps available free of charge but financed by advertising (which, interestingly enough, applies not least to the Facebook, Instagram and WhatsApp offers by GAFA giant Meta (formerly Facebook)).

The Bundeskartellamt’s suspicions are based, among other things, on a complaint filed in April 2021 by leading associations of the media, internet and advertising industries (which, according to the Central Association of the German Advertising Industry (ZAW), have also filed an antitrust complaint with the European Commission in a similar case, accusing Google of making it more difficult for third-party providers to access identification services in its Chrome browser and Android operating system, but exempting itself from these rules).

The initiation of proceedings against Apple shows the Bundeskartellamt’s determination to use the new instrument in Section 19a GWB against large digital companies and to move forward quickly in this regard – the initiation of these proceedings “based on Section 19a (2) sentence 1 GWB” at a time when the finding of Apple’s paramount significance for competition across markets has not yet been issued can hardly be understood otherwise. A corresponding finding by the Bundeskartellamt is likely to follow soon.

With Section 19a GWB, Germany is one of the first jurisdictions in the world to have an instrument at its disposal to prevent anti-competitive behaviour by powerful digital companies in the fast-moving digital markets more efficiently and more quickly than would be possible with traditional antitrust law means – and with the Bundeskartellamt, a national competition authority determined to use this new instrument specifically and quickly to protect competition, especially in the digital environment, for the benefit of competitors and consumers.