The recent regulatory proceedings at the Federal Cartel Office (Bundeskartellamt, BKartA) under Section 19a of the German Act against Restraints of Competition (Gesetz gegen Wettbewerbsbeschränkungen, GWB) have reached a new milestone. Some days before, the Federal Court of Justice (Bundesgerichtshof, BGH) upheld the BKartA’s determination that Apple holds a position of paramount cross-market significance for competition. Consequently, the company’s appeal against this regulatory finding was unsuccessful.
Section 19a GWB was introduced only a few years ago, primarily targeting platform companies. In an initial step, the BKartA is competent to investigate whether such a company possesses paramount cross-market significance for competition (subsection 1). Only to the extent, there is an assessment for this need for regulation the BKartA is entitled to, in a subsequent procedural step, impose specific remedy measures (subsection 2). In this case, it involved a fundamental ruling under Section 19a(1) GWB concerning the determination of the need for regulation.
As part of the introduction of Section 19a GWB, a statutory reduction of legal recourse was also incorporated. Legal remedies by companies against decisions of the BKartA in connection with this provision go directly to the BGH. This means that the BGH decides not only as a court of law but also as a court of fact. This approach aims to achieve legal certainty more swiftly.
The full text of the decision is still pending; only the press release is available. Nevertheless, three interesting points can be gleaned from it:
- No objections by constitutional or Union Law: The determination of paramount cross-market significance (ümüB) does not conflict with constitutional or union law grounds, particularly not with the Digital Markets Act (DMA). This is not entirely new, as the BGH had previously dismissed such objections. I have personally been critical of the introduction of Section 19a GWB for some time. However, the court does not see a referral to the ECJ, so the application should be very clear. Nonetheless, the BKartA’s statements repeatedly indicate a careful consideration of potential delineations and competencies in relation to the Commission’s activities. Therefore, a competence conflict with the Commission is unlikely.
- Definition of Multi-Sided Markets: A multi-sided market under Section 18(3a) GWB can be assumed even without business transactions if the platform directs the attention of one user group to another or technically enables interaction between different user groups. This finding is significant, especially for questions of market definition and the determination of market dominance. Since the mere facing of supply and demand is crucial for market determination, concrete transactions are not necessary. They can serve as an indicator. If there is a demand for an intermediation service, this already indicates a concrete market relationship.
- Abstract Potential for Endangering Competition: For the determination of paramount cross-market significance, no concrete danger to competition is required; an abstract potential for endangering competition suffices. The legislative rationale also states that a mere initial suspicion is sufficient for the BKartA to investigate. Such suspicion is likely limited to this abstract potential for endangering competition and not to a potential violation of antitrust prohibitions.
The now final decision of the BKartA is a fundamental ruling. Only based on this the authority is entitled to, in a second step, impose remedial measures under Section 19a(2) GWB. There is likely already cause for such measures. A few weeks ago, the BKartA communicated its legal opinion on the so-called App Tracking Transparency Framework (ATTF) to the company. According to this, the company engages in abusive behavior by making it more difficult for third-party providers to obtain consent for data usage for their apps. According to the BKartA, the displays in third-party apps are less user-friendly than those in Apple’s own apps. The authority is therefore considering prohibiting this behavior.
Both, the decisions of the two procedural steps, can each be challenged by court isolated and independantly from each other. Apple therefore still has the option of challenging any future remedial decisions by the FCO pursuant to Section 19a (2) GWB. In addition, the doubts of the FCO do not even have to lead to a remedial order. Proceedings pursuant to Section 19a (2) GWB can also be terminated cooperatively.
