German cartel watchdog puts Google under stricter surveillance

The Bundeskartellamt, the German cartel watchdog, rules that Alphabet and Google have ‘significant market power’ and can therefore come under stricter supervision under a new German law. Google is the first company to face this stricter regulation.

The stricter supervision means that the Bundeskartellamt says it can intervene earlier and more effectively at Google to counter anti-competitive behaviour. Under this stricter supervision, the watchdog can, for example, prevent Google from favoring its own products in its Play Store over products from other manufacturers. The watchdog may also require Google to make its products compatible with other products if lack of compatibility hinders competition. Google can also be obliged to transfer data more easily to other companies if this is better for competition.

In order for Google to fall under this stricter scrutiny, the watchdog first had to demonstrate that Google has “significant market power” in several markets. This means that a company is so large that other companies can hardly compete with it.

The Bundeskartellamt says that this is indeed the case at Alphabet, after discussions and ‘extensive questionnaires’ with Google and other parties, as well as analyzing other sources. An important aspect of the regulator’s judgment is that Google offers “a number of highly sought-after services”, including Search, YouTube, Chrome, Android and Play Store. In the German market for search engines and online advertisements, Google would have 80 percent of the market. The fact that these systems work together a lot and as a result Google, for example, can have Search automatically installed on Android phones also played a role for the Bundeskartellamt.

The judgment of the cartel watchdog is valid for a maximum of five years. In addition to Google’s market position, the company’s data usage is also examined, as well as the News Showcase service. Google says it will not appeal the decision, but emphasizes that the company does not necessarily agree with it. In addition to Google, the Bundeskartellamt is also conducting investigations against Amazon, Apple and Meta.