Germany’s competition watchdog, the Bundeskartellamt, has announced the launch of its own antitrust investigation into Apple’s practices.
Apple will now face yet another probe into its oft-criticised “walled garden” and whether it abuses its market position with unfair policies.
“An ecosystem which extends across various markets may be an indication that a company holds such a position,” the Bundeskartellamt said. “It is often very difficult for other companies to challenge such a position of power.”
While the watchdog doesn’t specifically say what action may be taken against Apple if it’s found guilty of anti-competitive behaviour, the Bundeskartellamt could make use of the 10th amendment to the German Competition Act, which came into force in January.
This 10th amendment to the legislation gives the Bundeskartellamt the power to intervene against digital firms engaging in anti-competitive practices.
While most of Apple’s services will be included in the probe, the watchdog says that “a main focus of the investigations will be on the operation of the App Store as it enables Apple in many ways to influence the business activities of third parties.”
A class-action lawsuit filed in the UK last month wants to force Apple to compensate users for potentially inflated app prices.
Until recently, Apple took a 30 percent commission on all app sales. Most app developers feel the cut is unjustifiable and critics believe that it’s an abuse of Apple’s market dominance.
iOS developers have been forced to inflate their prices to compensate for Apple’s cut.
The fundamental problem for us is the lack of choice,” wrote Basecamp CEO Jason Fried in a letter last year. “And Phil Schiller’s suggestion that we should raise prices on iOS customers to make up for Apple’s added margin is antitrust gold.”
However, it’s not just the App Store that Germany’s watchdog is probing.
The Bundeskartellamt claims that it’s received multiple complaints about Apple’s practices, including from the advertising industry following the introduction of the feature in iOS 14.5 which allows users to opt-out of targeted tracking.
Another focus of the probe will be to investigate whether Apple’s pre-installed apps, like Apple Music, disadvantages competing firms.
Andreas Mundt, President of the Bundeskartellamt, said:
“In addition to manufacturing various hardware products, the tech company also offers the App Store, iCloud, AppleCare, Apple Music, Apple Arcade, Apple TV+ as well as other services as part of its services business.
Besides assessing the company’s position in these areas, we will, among other aspects, examine its extensive integration across several market levels, the magnitude of its technological and financial resources and its access to data.”
One rival, Spotify, has previously complained about Apple’s practices. In response to Spotify’s complaint, and one allegedly filed by e-book reader Kobo, the EU Commission opened its own antitrust investigation against Apple last year.
Executive Vice-President Margrethe Vestager, in charge of competition policy, said at the time:
“Mobile applications have fundamentally changed the way we access content. Apple sets the rules for the distribution of apps to users of iPhones and iPads. It appears that Apple obtained a “gatekeeper” role when it comes to the distribution of apps and content to users of Apple’s popular devices.
We need to ensure that Apple’s rules do not distort competition in markets where Apple is competing with other app developers, for example with its music streaming service Apple Music or with Apple Books. I have therefore decided to take a close look at Apple’s App Store rules and their compliance with EU competition rules.”
Apple continues to face increasing scrutiny from watchdogs around the world, but none have taken any definitive action. We’ll keep you posted on any developments.
(Photo by Christian Wiediger on Unsplash)
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