German Federal Cartel Office initiates proceedings against Apple

The investigation proceedings against Amazon, Facebook and Google are already underway – now the Federal Cartel Office in Bonn is once again taking aim at Apple. It is to examine whether Apple, with its App Store and other business activities, has a cross-market significance and thus endangers competition.

App Store in focus

The 10th amendment to the Act against Restraints of Competition (GWB Digitization Act), which came into force in January 2021, enables the authority to investigate large digital companies as well. After Amazon, Facebook and Google, Apple is already the fourth company against which the Federal Cartel Office is initiating proceedings.

As part of a two-stage procedure, the authority must prove that these are companies with “outstanding cross-market significance for competition”.

Andreas Mundt, president of the German Federal Cartel Office reveals in the official announcement: “We will now examine whether Apple has established a digital ecosystem across several markets around the iPhone with its proprietary iOS operating system.

Testing pre-installed apps and app tracking

.
However, in addition to the App Store, other services such as iCloud, AppleCare, Apple Music, Apple Arcade, Apple TV+ are also in the spotlight, Mundt revealed:

“In addition to the group’s position in these areas, we will also look at, among other things, its extensive integration across multiple market tiers, its technological and financial resource strength, and its access to data. A key focus of the investigation will be the operation of the App Store, as in many cases it empowers Apple to influence the operations of third parties.”

The first step is to determine whether the law can be applied to Apple. If it does, antitrust watchdogs will look at many different specific issues. These include the app tracking transparency introduced with iOS 14.5, against which several associations from the advertising and media industry have already filed complaints.

In addition, app developers are criticizing the compulsion to use Apple’s own system for in-app purchases (IAP) and the associated commission rate of 30 percent. The related marketing restrictions in the App Store are also an issue.

Here, the Cartel Office sees parallels to the ongoing proceedings of the European Commission against Apple due to the restrictions of the streaming service Spotify and a corresponding preferential treatment of its own services.

Comparable proceedings have already been brought against Apple from the U.S. home market, as well as in the United Kingdom and Japan.