German regulator launches antitrust probe into Apple

Germany’s antitrust watchdog has launched a probe into whether Apple has established market dominance through its “digital ecosystem”, making it the fourth US tech giant the agency has targeted this year.

Using new competition laws for digital platforms enacted in January, Germany’s Federal Cartel Office has effectively launched an offensive this year against Big Tech. In the past few months, it has also initiated investigations into Facebook, Google, and Amazon.

The regulatory body said on Monday it would look at whether Apple exerted market dominance through its integration of hardware products — from iPhones and computers to tablets and wearables — with digital services such as the App Store, iCloud, or Apple Music.

The first step of the investigation would be to determine whether the company was of “paramount significance across markets”.

“An ecosystem which extends across various markets may be an indication that a company holds such a position,” the agency said in a statement.

“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,” said Andreas Mundt, head of the body.

A major focus of the investigation, he said, would be the App Store, “as it enables Apple in many ways to influence the business activities of third parties”.

Depending on its findings, the agency said it might then look at complaints raised by various groups for further proceedings against the $2.2tn Silicon Valley company. 

One such complaint comes from app developers against Apple’s pre-installation of its own applications, and its requirement that developers use its in-app purchase system, which takes a 30 per cent commission rate.

Another comes from the advertising and media industry, which has complained about the new iOS 14.5 operating system’s restrictions on user tracking.

The Federal Cartel Office said it would co-ordinate such investigations with the European Commission and other competition regulators. “So far, no decision on initiating a further proceeding has been taken,” it said.

Apple said that its “iOS app economy” supported more than 250,000 jobs in Germany, and that its App Store had given “German developers of all sizes the same opportunity to share their passion and creativity with users around the world”. It added that Germany was home to Apple’s largest engineering hub in Europe and it looked forward to having an “open dialogue” about any concerns of the antitrust authorities.