by Fatma Ceren Morbel
A recent effort by the European Union, known as the Digital Markets Act, aims to ensure fair and contestable markets, which was passed in November 2022 and entered into force in May 2023. Article 114 TFEU provides the legal framework for the DMA to ensure that the internal market operates effectively in terms of these two objectives, “fairness” and “contestability”.
As Article 1 (5) of the DMA stipulates that to avoid fragmentation of the internal market, Member States must refrain from imposing further obligations on gatekeepers through laws, regulations or administrative measures for the purpose of ensuring contestable and fair markets. However, there is no restriction on Member States imposing obligations on undertakings, including undertakings providing core platform services, in matters outside the scope of the DMA, as long as those obligations are compatible with EU law and are not the result of the relevant undertakings having the status of gatekeepers within the meaning of the DMA.
In regard of this, it raises the question as to how the introduction of section 19a of the German Competition Act (hereinafter: “GWB”), a new competition law instrument that permits the competition authority to impose obligations upon the determination of “paramount significance across markets”, interacts to the DMA under Article 1 (5).[1]
On 30 December 2021, the German Competition Authority (hereinafter: “Authority”) took action by determining that Google was of paramount importance for establishing and maintaining fair competition across markets under Section 19a of the GWB.
In light of Google's large number of services, such as Google Search, YouTube, Chrome, Android, and Play Store, which are strongly represented on the market, the Authority viewed Google as the dominant undertaking in the general search market in Germany with over 80% market share. Furthermore, it was noted that Google collects data not only on its own services, but also via third-party websites and apps, users are not given the option to reject tracking technologies in some cases as well.[2] Therefore, Google has the opportunity to benefit from economies of scope, as well as leverage deep data access to further consolidate and expand its position without a sufficient level of competition.[3]
According to Section 19a (2) No. 4a GWB, the Authority may prohibit an undertaking from “creating or appreciably raising barriers to market entry or otherwise impeding other undertakings by processing data relevant for competition that have been collected by the undertaking, or demanding terms and conditions that permit such processing, in particular making the use of services conditional on the user agreeing to the processing of data from other services of the undertaking or a third-party provider without giving the user sufficient choice as to whether, how and for what purpose such data are processed.”
As a result, the Authority concluded in its decision under Section 19a GWB that Google is engaging in particularly harmful conduct in accordance with Section 19a (2) No. 4a GWB through the use and implementation of its data processing conditions.
On the other hand, Google was designated as a gatekeeper by the European Commission on 6 September 2023, which had the effect of identifying certain services (Google Shopping, Google Play, Google Maps, Google Search, YouTube, Google Android, Google Chrome, and Google's online advertising services) within the scope of the DMA's application and regulation, as a result, Google has to comply with the obligations under Article 5 (2) DMA. Due to the similarity between Section 19a (2) No. 4a GWB and Article 5 (2) DMA, it brings the question whether the GWB and the DMA are complementary or if they may cause fragmentation.
To prevent fragmentation, the Article 37 DMA stipulates that “the Commission and Member States shall work in close cooperation and coordinate their enforcement actions to ensure coherent, effective and complementary enforcement of available legal instruments applied to gatekeepers.”
In accordance with the above-mentioned article, in the course of the proceeding on Google, the Authority and the European Commission cooperated closely as expressed by Andreas Mundt as: “Our proceeding shows that the Digital Markets Act and Section 19a GWB complement each other in a useful way. We cooperated with the European Commission throughout the proceeding and will also coordinate any further enforcement measures within the framework of the European Competition Network. The platform regulation pursuant to the Digital Markets Act by far does not cover all services offered by the companies which have been designated as gatekeepers, and it does not cover all competition issues either. For this reason it remains important to resolutely apply competition rules in parallel to the enforcement of the DMA.”[4]
As a result of proceeding conducted by the Authority, Google has offered a number of commitments that were deemed sufficient to dispel the concerns raised.
According to the commitments, Google is prohibited from: [5]
- “combining personal data from a service covered by the commitments with the personal data from other Google services or with personal data from third-party services;”
- “cross-using personal data from covered core platform services in other service provided separately without giving users sufficient choice options to consent.”
It was reported that the Authority and the European Commission will coordinate their enforcement activities and cooperate to ensure that the DMA and competition law interact effectively.[6]
[1] Jens-Uwe Franck and Martin Peitz, “Digital Platforms and the New 19a Tool in the German Competition Act” (2021) CRC TR 224 Discussion Paper Series.
[2] Alba Ribera Martínez, The Appropriation of Article 5(2) DMA: Google’s Commitments under Section 19a of the German Competition Act, 2023.
[3] Sascha Dethof and Lea Josten, “Bundeskartellamt Gives Users of Google Services Better Control over their Data on the Basis of Section 19a of the German Competition Act, GWB (Germany)” (2024) Journal of European Competition Law & Practice.
[4] Bundeskartellamt, Bundeskartellamt gives users of Google services better control over their data, 2023.
[5] Alba Ribera Martínez, The Appropriation of Article 5(2) DMA: Google’s Commitments under Section 19a of the German Competition Act, 2023.
[6] Bundeskartellamt, Bundeskartellamt gives users of Google services better control over their data, 2023.
