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German antitrust regulator, the Bundeskartellamt, has designated Apple as a legitimate target for special measures that are designed to prevent abuse of market dominance. This comes shortly after Apple successfully blocked a UK antitrust action against the company. The Bundeskartellamt began investigating App Tracking Transparency back in June of last year, with the investigation concluding that Apple gives its own apps an unfair advantage over competing ones.
This finding means that Apple is now subject to a special section of the German Competition Act, which is designed to target companies whose power means that they are able to act unfairly. Andreas Mundt, President of the Bundeskartellamt, commented that “Apple has an economic position of power across markets which gives rise to a scope of action that is not sufficiently controlled by competition”. He added that the decision enables the regulator to “specifically take action against and effectively prohibit anti-competitive practices”.
One issue of particular concern for the regulator is the fact that the iPhone maker is able to carry out tracking without user consent, while other developers cannot. The regulator argues that Apple’s monopoly control of iOS app sales means that the company can dictate rules to developers that may be unfair to them and to consumers.
Apple plans to appeal the decision, stating that the regulator’s designation misrepresents the fierce competition the company faces in Germany and discounts the value of a business model that puts user privacy and security at its core. However, the Bundeskartellamt argues that Apple’s tight proprietary vertical structure and an installed base of more than 2 billion active devices worldwide means that the company is in a position to tie its users to its complex ecosystem on a long-term basis.
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This decision by the German regulator adds to the growing number of investigations and regulatory actions that tech giants are facing around the world. As these companies continue to expand their power and influence, regulators are increasingly scrutinizing their practices and taking action to prevent anti-competitive behavior.