Ger­man Federal Car­tel Office clas­si­fies Goog­le as a mar­ket domi­na­tor

Impli­ca­ti­ons also for press pro­tec­tion law

Press Release
Ber­lin, 2022-01-06
Andre­as Mundt, Pre­si­dent of the Bun­des­kar­tell­amt:“Sin­ce Janu­a­ry 2021 we have a new instru­ment to moni­tor lar­ge digi­tal com­pa­nies. In less than a year, we have now taken the first offi­cial decisi­on […] and deter­mi­ned that Goog­le is of para­mount signi­fi­can­ce across mar­kets.” (see BKar­tA press release of Janu­a­ry 5, 2022, link at bot­tom of page).

The Ger­man Federal Car­tel Office (Bun­des­kar­tell­amt, BKar­tA) has deci­ded that Goog­le and its parent com­pa­ny Alpha­bet fall under the exten­ded abu­se con­trol by the anti­trust aut­ho­ri­ty. This cate­go­ri­sa­ti­on, which fol­lows the new pro­vi­si­on of the Act against Restraints of Com­pe­ti­ti­on (Sec­tion 19a GWB), allows for ex ante and more effec­ti­ve inter­ven­ti­on, and pro­hi­bi­ti­on of anti-com­pe­ti­ti­ve prac­ti­ces emana­ting from com­pa­nies with out­stan­ding cross-mar­ket impor­t­ance for com­pe­ti­ti­on.

The BKar­tA exp­lains the back­ground to this assess­ment by sta­ting that Alphabet/Google has a “posi­ti­on of eco­no­mic power that gives it scope for cross-mar­ket beha­vi­or that is not suf­fi­ci­ent­ly con­trol­led by com­pe­ti­ti­on. Due to its lar­ge num­ber of ser­vices, it could be said to have the cha­rac­ter of an “infra­st­ruc­tu­re”. In this con­text, the BKar­tA desi­gna­tes Goog­le as having para­mount signi­fi­can­ce across mar­kets.

In the press release, the Pre­si­dent of the Bun­des­kar­tell­amt, Andre­as Mundt, expli­ci­tly points out that the BKar­tA is inten­si­ve­ly loo­king into the topic of Goog­le News Show­ca­se, among others. This is par­ti­cu­lar­ly cru­cial for the enfor­ce­ment of the press publis­hers’ right, as the imple­men­ta­ti­on of the law, which came into for­ce in 2021, will be hin­de­red by the com­pre­hen­si­ve gran­ting of rights under Show­ca­se. The BKar­tA is thus fol­lowing up on the announ­ce­ment made in June 2021 to exami­ne whe­ther the con­trac­tu­al terms unre­a­son­ab­ly dis­ad­van­ta­ge the par­ti­ci­pa­ting publis­hers and make it dis­pro­por­tio­na­te­ly dif­fi­cult for them to enfor­ce the press publis­hers’ ancil­la­ry copy­right.

Goog­le has sta­ted that it will not appeal the decisi­on. At the same time, the com­pa­ny notes that it does not necessa­ri­ly agree with all the fac­tu­al fin­dings made by the Office in the decisi­on and the con­clu­si­ons drawn from them.

Com­men­ting on the BKar­tA’s decisi­on, Corint Media mana­ging direc­tors Mar­kus Run­de and Chris­toph Schwennicke exp­lain: “Corint Media wel­co­mes the Bun­des­kar­tell­am­t’s deter­mi­na­ti­on of mar­ket domi­nan­ce as a pre­re­qui­si­te for action against Goog­le and, abo­ve all, Alpha­bet on the basis of Sec­tion 19a GWB, and at the same time the expli­cit state­ment that Goog­le News Show­ca­se and any rela­ted issu­es are also the sub­ject of inves­ti­ga­ti­ons by the Office. The Office is thus indi­ca­ting that it may con­si­der the con­tracts initia­ted by Goog­le with publis­hers to com­pen­sa­te for press ancil­la­ry copy­right to be mar­ket abu­ses, sin­ce con­di­ti­ons and low pri­ces could only be enfor­ced becau­se of Goog­le’s out­stan­ding mar­ket impor­t­ance. By exten­ding the inves­ti­ga­ti­on to Alpha­bet, the Federal Car­tel Office is at the same time indi­ca­ting that it is not impres­sed by the Alpha­bet Group’s cor­po­ra­te and tax-opti­mi­zed struc­tures.”
   

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