Germany's competition watchdog to investigate whether Apple's ecosystem damages other businesses

Joins queue of regulators peeking into iOS walled garden model


Germany's competition watchdog, the Bundeskartellamt, today said it has opened a preliminary investigation into Apple's grip on the market and its walled garden ecosystem.

The Bundeskartellamt said it seeks to determine whether Apple is "of paramount significance" across the various markets it caters for with its services including the App Store, Apple Music, iCloud, and others.

"An ecosystem which extends across various markets may be an indication that a company holds such a position. It is often very difficult for other companies to challenge such a position of power," the watchdog said.

If it concludes Apple is disproportionately powerful, it can take action using the 10th amendment to the German Competition Act, which came into force in January. This legislation provides the Bundeskartellamt with powers to intervene against digital firms engaging in anticompetitive practices.

Andreas Mundt, president of Bundeskartellamt, said: "We will now examine whether with its proprietary operating system iOS, Apple has created a digital ecosystem around its iPhone that extends across several markets.

"Apple produces tablets, computers and wearables and provides a host of device-related services. 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. 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."

The watchdog said it had received multiple complaints from other firms alleging to have been disadvantaged by anticompetitive practices. One, from the advertising industry, entered on the "do not track" provisions introduced in iOS 14.5, which allow end users to opt out of targeted tracking required to deliver personalised advertisements.

Another focus of the investigation aims to determine whether the inclusion of Apple's own apps, like Apple Music, are a type of prohibited self-preferencing, which can disadvantage competing firms.

The remit of this investigation has also encompassed the App Store, and the German regulator aims take a close look into Apple's practice of prying 30 per cent (or, in the case of certain small developers, 15 per cent) commission from all revenue generated on the platform.

The Bundeskartellamt has opened similar investigations into Google, Amazon, and Facebook.

Much like the German regulator, the UK's Competition and Markets Authority has launched a similar investigation into Apple's ecosystem, albeit with Google also caught in the dragnet.

The Register has asked Apple to comment. ®

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