Google's Dominance in the Digital World Under Scrutiny in Germany

Andreas Mundt, the Head of Germany's Antitrust Office, is Targeting the Heart of What Enables Big Tech to Dominate Markets In the Digital Age: Data. That's According to Mundt, One of the Sector's Most Tenacious Critics.

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The German Federal Cartel Office has sent a formal warning to Alphabet Inc.'s Google over the company's user terms, claiming that they give Google an unfair competitive advantage. The case will focus on the benefits that Google derives from its data collection processes, Mundt said in an interview with Bloomberg News.

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Mundt stated that hardly anyone gets data at the speed, scale, and variety that they do, which gives them a competitive advantage. With so much data, they are able to do more than their competitors.

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Mundt is using the probe to flex the powers his office was given two years ago to address crucial issues related to the digital economy. This is an area he describes as a “top priority” for his agency. The Google case builds upon a 2019 Facebook ruling in which the Cartel Office made global headlines by attacking the social media giant’s data-driven business model.

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Mundt said that the Facebook and Google cases raise fundamental questions about market control and dominance. He said that these data processing investigations could help answer these questions.

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Google said that its goal is to always offer products that meet regulatory requirements and put users first. The company plans to continue adapting its services, and to engage in ongoing discussions with German authorities.

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Mundt reflected that the Facebook case is his "favorite" because it focuses on both data protection and competition, and on the overlap between them. Meta challenged the Cartel Office order, and a decision is currently pending at the EU’s top court. However, in September the social media company suffered a setback when an EU judicial official issued an opinion strongly backing the German regulator. A ruling from the Luxembourg-based top tribunal is expected this year.

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The action taken by the Cartel Office against Google comes just months before the EU-wide Digital Markets Act, designed to regulate the internet economy, comes into effect. Although this legislation will cover a wide range of digital issues, Mundt is not concerned that the new rules will make his office obsolete.
The DMA covers specific services offered by tech giants like Google or Meta. A clause in German competition law, called Article 19a, grants regulators the power to put an entire company, including its various units, under heightened review for a five-year period. German regulators are also authorized to examine new business practices, while the DMA only bans certain enumerated kinds of conduct, Mundt said.

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Mundt said that the areas just outside of the DMA's legal reach will be of particular interest for 19a orders. He added that this is also true for edge cases - business practices that may be outside of the DMA's jurisdiction. Mundt said he has already spotted several examples of this.

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Mundt believes that the digital world is so vibrant and dynamic that we always need a set of tools that can pick up on more difficult things. According to Mundt, there are certainly enough tasks left in the digital world for us to do in the future.