Germany’s national competition regulator, the Bundeskartellamt, has continued its investigative charge against big tech — announcing that it’s opened two proceedings into Google.
The move follows earlier proceedings targeting Amazon and Facebook — both of which are also looking to determine whether their businesses are of “paramount significance for competition across markets”, as German competition law puts it. (The regulator is also probing Facebook’s tying of Oculus to Facebook accounts.)
In Google’s case, one of Bundeskartellamt’s new proceedings will confirm whether amended competition rules, which came into force in January, apply in its case — which would enable the FCO to target it with proactive interventions in the interests of fostering digital competition.
The second, parallel procedure will see the Federal Cartel Office (FCO) undertake an in-depth analysis of Google’s data processing terms in a move that looks intended to avoid wasting time — i.e., that its working assumption is that Google/Alphabet’s business meets the legal bar in the GWB Digitalisation Act.
By running the two Google procedures in parallel, the German competition regulator will be in a position to act faster — assuming the first proceeding confirms it can indeed intervene.
The second probe running alongside would then identify potential problems to shape any intervention — with the FCO saying, for example, that it will look at whether Google/Alphabet “makes the use of services conditional on the users agreeing to the processing of their data without giving them a sufficient choice as to whether, how and for what purpose such data are processed”.
It also says it will “examine the extent to which the terms provide Google with an opportunity to process data on an extensive cross-service basis” and will seek to clarify “how the company’s data processing policy applies to the processing of user data obtained from third-party websites and apps” (such as through Google’s advertising services).
Another critical element of the proceeding will aim to establish what choice users actually have about Google’s data processing, with the FCO noting that protecting consumer choice is a primary aim of competition law.
Given those focus points, it’s possible to imagine a future order from the FCO to Google. It could require it to simplify how it asks users for consent, ensure genuine choice, and shrink its ability to link first-party user data with information obtained on people elsewhere online.
Commenting in a statement, Andreas Mundt, president of the Bundeskartellamt, said: “An ecosystem which extends across various markets may be an indication that a company holds such a market position [i.e., whether it is of paramount significance across markets]. It is often tough for other companies to challenge this position of power. Due to the large number of digital services offered by Google, such as the Google search engine, YouTube, Google Maps, the Android operating system, or the Chrome browser, the company could be considered to be of paramount significance for competition across markets.”
“Google’s business model relies to a considerable extent on processing data relating to its users. Due to its established access to data relevant for competition, Google enjoys a strategic advantage. We will therefore take a close look at the company’s data processing terms. A key question in this context is whether consumers wishing to use Google’s services have a good choice as to how Google will use their data,” he added.
Reached for comment on the FCO proceedings, Google said it will fully cooperate with the FCO’s process but rejected the charge that people are forced to use its services — further claiming in a statement attributed to a spokesperson, Ralf Bremer, that it offers “simple controls” so people can “limit” its use of their information:
The Bundeskartellamt‘s in-depth probe of Google’s data processing terms picks up on lengthy running criticism that the tech giant relies on forced and/or manipulative consent from users to obtain their data. Whereas the pan-EU legal standard, if consent is used as a legal basis to process people’s information, should be clear, informed, and freely given.
In 2019 Google was fined $57M by France’s data protection watchdog under the EU’s General Data Protection Regulation (GDPR) over a failure to provide “sufficiently clear” information to Android users when it sought their consent to use their data for targeted ads.
However, after the CNIL’s action, the tech giant limited its exposure to the privacy regulation by changing the legal jurisdiction of where it processes European users’ data to Ireland.
The Irish Data Protection Commission (DPC) became Google’s lead data supervisor under the GDPR’s one-stop-shop mechanism. And the DPC has not decided a single GDPR complaint against Google — though it has several open investigations. It continues to face high-level criticism over its enforcement record on critical cross-border cases against big tech.