Apple's dominance means it needs stricter controls, says Germany's antitrust regulator

AppleInsider

Regulators in Germany have declared that Apple's size and importance means it qualifies for the country's extended anti-competition law, and needs more scrutiny for potential anti-trust violations.

Germany is already investigating Apple over the alleged antitrust implications of its App Tracking Transparency feature in iOS.

Now, Germany's Bundeskartellamt regulator has determined that Apple is subject to the 2021 amendment to the country's German Competition Act (GWB). The new section 19a of that act came into effect in January 2019, and it is specifically aimed at firms the regulator determines to be of "paramount significance for competition across markets."

"Apple has an economic position of power across markets which gives rise to a scope of action that is not sufficiently controlled by competition," said Bundeskartellamt President Andreas Mundt, in a statement. "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," continued Mundt. "This decision enables us to specifically take action against and effectively prohibit anti-competitive practices."

There is a clause in the regulations which means the Bundeskartellamt's decision that Apple qualifies under this law, is limited to five years. It's not clear whether the regulator can the simply re-issue the decision.

However, the announcement that Apple qualifies has started that five-year clock. It means that until 2028, Apple is "subject to special abuse control."

The decision does not necessarily mean that Germany will open further legal cases against Apple, just that this regulator now has the authority to. It also does not impact other existing investigations, such as Germany's Federal Cartel Office which also examining alleged antitrust issues regard the App Store.


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genovelle

Apple’s popularity may mean that some products will be paused or deactivated in Germany so their beliefs are not an issue. Apple already limits certain products to the US and Canada because releasing in Europe or other countries with complicated regulations doesn’t make good business sense. 

igorsky

In all of these initiatives in the EU they always throw out that they want to protect competition, but rarely do they talk about the consumer.  How about asking us if we want the EU sticking their nose in the way Apple operates?  Clearly consumers have spoken with their wallets and they like the way Apple does things.  

hmurchison

igorsky said:

In all of these initiatives in the EU they always throw out that they want to protect competition, but rarely do they talk about the consumer.  How about asking us if we want the EU sticking their nose in the way Apple operates?  Clearly consumers have spoken with their wallets and they like the way Apple does things.  

I've noticed this as well.   I rarely see issues concerning consumers take the front seat.  Even in this article the issue alluded to is App Tracking Transparency.   This is an issue that consumers would generally be keen on given the Facebook/Cambridge Analytica fiasco.   Even then Governments were tepid in response. Sure they levied fines but few were jumping up to craft legislation to drastically curb how consumer data is to be kept private. 

Any attempt for corporations to redirect the flow of data-mined data is met with nebulous anti-trust claims.  I've been using the NextDNS free product for a while and it's crazy how many links I click on are filtered through some analytics engine.   I get that companies want to see engagement data for their marketing but todays solution is akin to a husband talking to his wife through the children "hey Bobby tell your mother ...".  

gatorguy

igorsky said:

In all of these initiatives in the EU they always throw out that they want to protect competition, but rarely do they talk about the consumer.  How about asking us if we want the EU sticking their nose in the way Apple operates?  Clearly consumers have spoken with their wallets and they like the way Apple does things.  

I think we will all be better off, and certainly the tech landscape, if authorities start throttling the power wielded by Apple, Google and Microsoft. 

it will be impossible for honest competition to evolve when at the first sign of potential one of the big three swallows it up by acquisition, or nullifying any possible market presence by creating their own version and outlasting/outspending any legal challenges from doing so. No company on earth is more economically powerful than Apple, and Google and Microsft are not far behind. They can withstand any challenge except by government authorities. 

Being monitored and regulated won't prevent any of the three from becoming even larger and more profitable, but it could at least help level the playing field for other innovators and start-ups.

darelrex

Apple's ATT — which gives each user the option to allow/disallow tracking for each individual app — is "not sufficiently controlled by competition"? So if market forces don't persuade Apple to let Facebook track all iPhone users whether they like it or not, then the government needs to step in and make it happen? Thanks, Germany. Glad I don't live there.

theotherphil

Market share in Germany:

iPhone - 39%
Android 58%

Yep, the cash cow needs more scrutiny.

EsquireCats

I'd be more onboard with this if Apple had significant market share in Germany, or indeed in Europe - but they don't.
So instead this just looks like an excuse for a $hake down.

Germany don't need sales data to determine iPhone use in the country, the cellular providers already have this data and this can be made available for government review (as can many types of broad data that are useful for establishing policy.)

Meanwhile we see similar European-led opposition against Apple with regard to Spotify (a European-based company). The top line is "competition", but by their own measures it should be Spotify that is receiving scrutiny: with their significantly larger number of users, and the constant abuse of their position against artists and consumers alike.

theotherphil

gatorguy said:

igorsky said:

In all of these initiatives in the EU they always throw out that they want to protect competition, but rarely do they talk about the consumer.  How about asking us if we want the EU sticking their nose in the way Apple operates?  Clearly consumers have spoken with their wallets and they like the way Apple does things.  

I think we will all be better off, and certainly the tech landscape, if authorities start throttling the power wielded by Apple, Google and Microsoft. 

it will be impossible for honest competition to evolve when at the first sign of potential one of the big three swallows it up by acquisition, or nullifying any possible market presence by creating their own version and outlasting/outspending any legal challenges from doing so. No company on earth is more economically powerful than Apple, and Google and Microsft are not far behind. They can withstand any challenge except by government authorities. 

Being monitored and regulated won't prevent any of the three from becoming even larger and more profitable, but it could at least help level the playing field for other innovators and start-ups.

That's a very modern view....we at the point in history where everybody feels entitled to a participation award. I'm not entirely sure that having quotas for minorities is the way to foster "competition" or "equality". It's not competition when one party is held back because they are too "good" or "successful".

Don't forget, Apple entered the mobile phone business with no experience whatsoever. They were laughed at by all the big players of the time as the were just a consumer electronics company - what could they possibly know? They weren't even being taken seriously in the PC space at the time either. They came from nowhere and took the lunch of the existing players through good business acumen and solid products. This was even more impressive given the existing cell operators pretty much controlled the market globally.

You'll have a hard time convincing me that "start ups" and "innovators" need their "competition" to be held back in order to create a so called level playing field. What they need is a good business model and a product that solves a problem.

macxpress

The only thing Apple is dominating are profits and headlines. Boo hoo that other companies aren't considered premium so they can charge more. Apple doesn't have any kind of monopoly on anything. 

gatorguy

EsquireCats said:

I'd be more onboard with this if Apple had significant market share in Germany, or indeed in Europe - but they don't.

Germany: "Apple has an economic position of power across markets..."


Which they do. 

gatorguy

theotherphil said:

gatorguy said:

igorsky said:

In all of these initiatives in the EU they always throw out that they want to protect competition, but rarely do they talk about the consumer.  How about asking us if we want the EU sticking their nose in the way Apple operates?  Clearly consumers have spoken with their wallets and they like the way Apple does things.  

I think we will all be better off, and certainly the tech landscape, if authorities start throttling the power wielded by Apple, Google and Microsoft. 

it will be impossible for honest competition to evolve when at the first sign of potential one of the big three swallows it up by acquisition, or nullifying any possible market presence by creating their own version and outlasting/outspending any legal challenges from doing so. No company on earth is more economically powerful than Apple, and Google and Microsft are not far behind. They can withstand any challenge except by government authorities. 

Being monitored and regulated won't prevent any of the three from becoming even larger and more profitable, but it could at least help level the playing field for other innovators and start-ups.

That's a very modern view....we at the point in history where everybody feels entitled to a participation award. I'm not entirely sure that having quotas for minorities is the way to foster "competition" or "equality". It's not competition when one party is held back because they are too "good" or "successful".

Don't forget, Apple entered the mobile phone business with no experience whatsoever. They were laughed at by all the big players of the time as the were just a consumer electronics company - what could they possibly know? They weren't even being taken seriously in the PC space at the time either. They came from nowhere and took the lunch of the existing players through good business acumen and solid products. This was even more impressive given the existing cell operators pretty much controlled the market globally.

You'll have a hard time convincing me that "start ups" and "innovators" need their "competition" to be held back in order to create a so called level playing field. What they need is a good business model and a product that solves a problem.

Your opinion is also a perfectly valid one. .

avon b7

theotherphil said:

gatorguy said:

igorsky said:

In all of these initiatives in the EU they always throw out that they want to protect competition, but rarely do they talk about the consumer.  How about asking us if we want the EU sticking their nose in the way Apple operates?  Clearly consumers have spoken with their wallets and they like the way Apple does things.  

I think we will all be better off, and certainly the tech landscape, if authorities start throttling the power wielded by Apple, Google and Microsoft. 

it will be impossible for honest competition to evolve when at the first sign of potential one of the big three swallows it up by acquisition, or nullifying any possible market presence by creating their own version and outlasting/outspending any legal challenges from doing so. No company on earth is more economically powerful than Apple, and Google and Microsft are not far behind. They can withstand any challenge except by government authorities. 

Being monitored and regulated won't prevent any of the three from becoming even larger and more profitable, but it could at least help level the playing field for other innovators and start-ups.

That's a very modern view....we at the point in history where everybody feels entitled to a participation award. I'm not entirely sure that having quotas for minorities is the way to foster "competition" or "equality". It's not competition when one party is held back because they are too "good" or "successful".

Don't forget, Apple entered the mobile phone business with no experience whatsoever. They were laughed at by all the big players of the time as the were just a consumer electronics company - what could they possibly know? They weren't even being taken seriously in the PC space at the time either. They came from nowhere and took the lunch of the existing players through good business acumen and solid products. This was even more impressive given the existing cell operators pretty much controlled the market globally.

You'll have a hard time convincing me that "start ups" and "innovators" need their "competition" to be held back in order to create a so called level playing field. What they need is a good business model and a product that solves a problem.

This is demonstrably false. Let's take the EDA market as an example.

Can you tell me where competition is? 

There are three major players that dominate the field but none of them have really brought much to market when you consider development over time. Yes, there have been some stand out points (one very recent) but when you look at what is typical of the industry, R&D has brought limited success (typical of most larger companies).

The real mover of technology has been the start ups which are often created with the sole ambition of being acquired by one of the three bigger fish. That isn't competition. 

Let's take raw materials as another example. That is another classic example of a lack of competition. Dow Chemical doesn't really compete with many other companies.

These are classic examples of gatekeeper environments and, make no mistake, gatekeepers are not interested in open competition of they can avoid it. 

Also, first mover status is another key element. It isn't necessarily the quality of your product that makes the difference at first, but the fact that, for whatever reason, you got there first. 

danox

gatorguy said:

igorsky said:

In all of these initiatives in the EU they always throw out that they want to protect competition, but rarely do they talk about the consumer.  How about asking us if we want the EU sticking their nose in the way Apple operates?  Clearly consumers have spoken with their wallets and they like the way Apple does things.  

I think we will all be better off, and certainly the tech landscape, if authorities start throttling the power wielded by Apple, Google and Microsoft. 

it will be impossible for honest competition to evolve when at the first sign of potential one of the big three swallows it up by acquisition, or nullifying any possible market presence by creating their own version and outlasting/outspending any legal challenges from doing so. No company on earth is more economically powerful than Apple, and Google and Microsft are not far behind. They can withstand any challenge except by government authorities. 

Being monitored and regulated won't prevent any of the three from becoming even larger and more profitable, but it could at least help level the playing field for other innovators and start-ups.

I would say that would be Autodesk and Adobe and the various game engine companies, more than Apple, or Google at this point in history.

danox

gatorguy said:

EsquireCats said:

I'd be more onboard with this if Apple had significant market share in Germany, or indeed in Europe - but they don't.

Germany: "Apple has an economic position of power across markets..."


Which they do. 

Many German companies have folded up in the tech area, years ago when Suse Linux gave up the ghost, I said that was a dumb move moving forward. Siemens is also been a disappointment in the last 30 years? And I also can add the UK, Canada, Australia, New Zealand they have been a big disappointment in all areas. Their performances in Tech have been as bad as America performance in the rail systems well, maybe not that bad…… but not good.

spheric

igorsky said:

In all of these initiatives in the EU they always throw out that they want to protect competition, but rarely do they talk about the consumer.  How about asking us if we want the EU sticking their nose in the way Apple operates?  Clearly consumers have spoken with their wallets and they like the way Apple does things.  

The argument, I believe, is that consumers are being harmed by the artificially high entry barrier Apple sets for developers to reach to the iOS/iPadOS user base. Users have access to less software than they would otherwise, due to Apple's role as a gatekeeper. 

spheric

theotherphil said:

Market share in Germany:

iPhone - 39%
Android 58%

Yep, the cash cow needs more scrutiny.

Oh wow! I always had them pegged at share of in the high 20%s… They've gained 10% market share over the past three years. 

That's big, even ahead of the closest single Android vendor, Samsung (at 35.4%). They're certainly a major player in the market, and their role is only growing.