Bundeskartellamt -the German antitrust watchdog- has today initiated two proceedings against Google (Germany GmbH, Ireland Ltd. and Alphabet Inc.) based on the new competition law provisions applicable to large digital companies.
The watchdog will examine whether its range of digital services, spanning search, YouTube, Maps, its Android smartphone operating system and Chrome browser, mean the company has a dominant position across markets. The German authority has sought to treat user data as a competition issue, a position challenged by critics who say the matter falls under the purview of the European Union’s privacy laws.
An ecosystem which extends across various markets may be an indication that a company holds such a market position. It is often very difficult for other companies to challenge this position of power. Due to the large number of digital services offered by Google, such as the Google search engine, YouTube, Google Maps, the Android operating system or the Chrome browser, the company could be considered to be of paramount significance for competition across markets.” Andreas Mundt, President of the Bundeskartellamt,said in a statement.
In a second proceeding based on this general classification also initiated today, the Bundeskartellamt will undertake an in-depth analysis of Google’s data processing terms.
“Google’s business model relies to a very large extent on processing data relating to its users. Due to its established access to data relevant for competition, Google enjoys a strategic advantage. We will therefore take a close look at the company’s data processing terms. A key question in this context is whether consumers wishing to use Google’s services have sufficient choice as to how Google will use their data.”, Mundt continued.
The new legal provision includes some specific examples of practices that can be prohibited if they are used by a company with paramount significance for competition across markets. The Bundeskartellamt will examine whether Google/Alphabet makes the use of services conditional on the users agreeing to the processing of their data without giving them sufficient choice as to whether, how and for what purpose such data are processed.
Using Google’s services always requires users to consent to specific terms governing Google’s data processing. Google introduces these terms in different ways, depending on whether the user has set up a Google account or whether the individual services are used without such an account. Users can also adjust Google’s so-called personalisation settings.
The Bundeskartellamt will examine the extent to which the terms provide Google with an opportunity to process data on an extensive cross-service basis. The authority will also have to clarify how the company’s data processing policy applies to the processing of user data obtained from third-party websites and apps, for example through Google’s advertising services. Furthermore, it is crucial for the assessment under competition law to establish what choice users actually have with regard to Google’s processing of their data. Protecting consumer choice is a primary aim of competition law the importance of which was underscored by the new GWB Digitalisation Act.
Facebook’s data processing policy
In the past months, The Bonn-based watchdog has made use of enhanced powers it was accorded under recent reforms to Germany’s competition laws to open new probes into Facebook and Amazon based on this new competition law tool.
In early 2019, the Bundeskartellamt imposed extensive restrictions on Facebook regarding the processing of user data. The Bundeskartellamt’s proceeding as well as the subsequent court proceedings were, however, based on the competition law provisions governing abuse control already in place before the recent amendment to the German Competition Act. The facts that are to be assessed in the present case are also different.
The Facebook case is still pending before the court. In March 2021, the Düsseldorf Higher Regional Court decided to refer certain issues relating to the application of the General Data Protection Regulation to the European Court of Justice since, in the court’s view, a decision on the merits of the case can only be rendered after these issues have been clarified.