Germany Takes Aim at Internet Giants
(Bloomberg) -- American technology giants such as Facebook Inc. will continue to face regulatory pressure in Europe, Germany’s antitrust chief warned.
The Federal Cartel Office is focusing on protecting competition in the digital economy through a strategy "against big internet companies," its President Andreas Mundt said at a press conference in Bonn on Monday. The approach consists of two layers: keeping markets open for new players, and making sure consumers can pick products and services in a fair and transparent environment.
Mundt’s comments signal there’ll be no let up in the way the internet is policed in the European Union’s biggest economy, after his agency opened a ground-breaking probe into how Facebook scoops up information on how users surf the web to drive its advertising revenue.
The German authority has been tackling the importance of big internet platforms, Mundt said as he presented the regulator’s 2017 report. Aside from the office’s probe against Facebook, he cited so-called sector inquiries into online advertising, smart TV and comparison website as examples of these efforts.
Mundt has been repeatedly vocal about threats he thinks companies such as Amazon.com Inc., Apple Inc., Facebook and Alphabet Inc.’s Google pose to democracy and free markets. His agency is cooperating with its French counterpart on algorithms and will take an even closer look at e-commerce issues, he said.
At the same time, the European Commission, the EU’s executive arm, is also confronting key issues in the digital market, as its probes against Google show, according to the Cartel Office chief.
"With all of that, we have an extraordinary bandwidth of activities," said Mundt. "The European competition authorities are in the process of setting out guidelines for the digital economy."
Mundt is optimistic of taking "the next steps" by the end of the year in the Facebook probe -- which has focused on how the social network utilizes some user information and whether it does so by taking undue advantage if its market position in Germany. The case, which started in 2016, won’t last as long as the EU’s lengthy procedure against Google, Mundt said.
Facebook in May announced the implementation of new features, “which we will now review to see what the effects are," said Mundt. "In that respect, Facebook is like a movable target to which have to adapt our review."
The company didn’t immediately respond to a request for comment.
Mundt said it’s important for the office to conclude internet-related cases to pave the way for courts to rule on contested issues and he added that case law on these disputes will help guide future action of regulators.
Mundt also urged lawmakers to take a closer look at how companies may be able to collect data of users. More regulation is needed here, he said.
An important question is whether “the collection of enormous amounts of data” is proportionate “to the efficiencies promised" he said. "That’s something we’re also looking at in the Facebook probe."
E-commerce is another sector the German regulator seeks to focus on, especially on the relationship between platforms and companies that use them for their sales, the Cartel Office chief said.
This is not only concerning Amazon, he said. There are more platforms which become more and more important and which will have to be monitored, he said, declining to name any of them.
In 2017, the Cartel Office issued a combined 66 million euros ($76.6 million) in fines. It received 37 leniency applications and conducted 11 raids targeting 60 companies. In the current year, penalties have risen to a combined 272 million euros against 16 companies and 13 individuals. So far, seven searches took place at 16 companies and 13 homes.
©2018 Bloomberg L.P.