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Germany’s antitrust chief Andreas Mundt is about to conclude the first of a new type of Big Tech probe — but sees his pioneering role threatened by impending rules at the European level.
After a year of frantic digital activity at his competition authority, the Bundeskartellamt, Mundt in an interview with POLITICO shared his experiences in applying Germany’s new legal framework for digital platforms.
The official from Bonn, who is often described as a trailblazer in competition law — most famously with a controversial probe into Facebook’s data gathering — is worried that when similar rules in the EU’s Digital Markets Act start applying, possibly as soon as next year, his agency will be cut off from this advanced type of enforcement.
“All I’m asking for is that we have a clear-cut provision in the Digital Markets Act that we [at the Bundeskartellamt] can continue our work,” he said.
Germany in early 2021 approved a reform of national competition law that made it the first country in the world with preventative rules tailored to counter the market power of the tech giants.
Competition authorities traditionally can act only after a company has abused a dominant market position, which has proven a slow and ineffective way of dealing with anticompetitive behavior by fast-moving tech companies such as Google or Amazon. The new framework allows the Bundeskartellamt to prohibit abusive behavior before it takes place, including within markets where these firms are not yet dominant.
Apart from the EU, other jurisdictions including the U.S. and the U.K. are working on similar rules for the tech giants that can be deployed in parallel to the existing competition toolkit.
After instituting its new rules in January, the Bundeskartellamt swiftly opened investigations into Facebook, Amazon, Google and Apple to determine whether they can be designated as “ecosystems” — meaning they need to obey a new set of rules, including the prohibition against giving preferential treatment to their own services or hindering interoperability with other services.
The agency simultaneously started three in-depth probes into breaches of the new rules by Google (over its “News Showcase” service and data gathering practices) and Facebook (over its merger with Oculus).
“We are very advanced with most of these seven proceedings, especially with those about the designation process of these companies,” Mundt said. “You can definitely expect decisions in quarter one of 2022.” Mundt did not exclude there could already be further decisions in the Google or Facebook cases.
Officials in Brussels, however, are less keen on allowing Mundt to continue his Big Tech enforcement spree. They see the Digital Markets Act as an opportunity to centralize the new regulatory regime, arguing it is more efficient to deal with global players at the European level.
“Regulating this at national level would mean fragmenting the internal market,” an official previously told POLITICO.
The debate concerns the ability of the Bundeskartellamt and other national competition authorities to enforce both the DMA and national rules like Germany’s new digital rulebook, which was integrated into its competition law.
“I don’t understand in any way why we don’t make use of all resources that are at hand in the national competition agencies,” Mundt said about the enforcement of the DMA. “Or if you really do not want to do that, then please don’t cut off the competencies that national competition agencies have in their respective national laws. Because if you do that, that is only to the advantage of the companies, never ever to the advantage of enforcement in Europe,” he said.
Experience with new rules
Whichever way the enforcement discussion goes, competition and digital experts around the world will closely follow Germany’s first experiences with ex ante competition rules.
For Mundt, one big difference with traditional abuse-of-dominance cases, such as the EU’s three cases into Google, is the holistic approach. “What is most interesting in these cases is you do not look so much at dominance on a certain market; the point is how it all works together,” Mundt said.
He illustrated his point with a reference to the new probe into Google’s data-gathering practices, which he said is similar to the case in which he ordered Facebook to stop combining data from its own application with data from across the internet.
“These are extremely fundamental cases and I like them so much, because they are not only about a certain conduct, like what does your website look like? Is there self-preferencing in using a certain color? This is really about … the dominance of these companies and how they gather and treat data,” he said.
So far, the new proceeedings are not going as fast as some may have expected. That has many reasons, Mundt explained.
“It was clear from the beginning that our designation procedure would be slower than that of the EU with the DMA, which uses more precise criteria to determine the gatekeeper status of a company,” he said. The system proposed in the DMA, however, risks unduly burdening European companies that do not deserve regulation, Mundt argues.
Mundt is once again charting new waters. With little or no guidance, he needs to bolster his decisions so they can withstand appeals from the Silicon Valley firms and their raft of top lawyers.
“The problem is, of course, that it’s a new law. So there’s nothing you can rely on. There is no jurisprudence, you find nothing in the textbook,” Mundt said.
Without additional resources, the German competition chief needed to carve out case teams from existing staff. That also means other probes were put on ice, including a complaint over abuse of dominance by German sofware giant SAP, Mundt said.
There may be assistance coming. Germany’s new coalition pledged to “strengthen the Bundeskartellamt in dealing with platforms.” A first test of whether that support also means hard cash for the watchdog will be when its budget, which was first drafted by the previous government, will be renegotiated with the revamped ministries.
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