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German Antitrust Regulator Steps Up Scrutiny of Meta

Tim Cross 04 May, 2022 

Germany’s antitrust regulator, the Bundeskartellamt (Federal Cartel Office, or FCO), announced this morning it has ruled that Meta is of “paramount significance for competition across markets”, a designation which will allow the FCO to take swifter action against the company.

The competition watchdog believes that Meta has a dominant position in multiple markets, including social media, advertising, and VR. As such, it will now be able to move more quickly to conclude ongoing cases against Google’s sharing of data between its social media services, and its linking of Oculus VR services to the Facebook platform.

“The digital ecosystem created by Meta has a very large user base and makes the company the key player in social media,” said Andreas Mundt, president of the Bundeskartellamt. “Our investigations have shown that Meta is of paramount significance across markets, also within the meaning of competition law. Following a proceeding which was contested for some time, we have now formally proven the company’s relevant position.”

Mundt added that Meta has waived its right to appeal the decision.

From reaction to prevention

A new law which came into effect at the beginning of last year gives the FCO broader powers in cases relating to the largest of the tech giants, allowing it to intervene more quickly and effectively. But in order to do so, it first needs to prove that the company in question is of “paramount significance” in multiple markets, considering its dominance in different markets, its access to resources and data relevant to competition, and its ability to exercise control over third parties.

Once this is decided, the FCO can prohibit a company from any actions which may provide preferential treatment for their own services over competitors, or else impede competitors who may use that company’s services – even in markets where the company is not yet dominant. The idea is that these extra powers allow the FCO to act in a more preventative manner, rather than just reacting once one of the tech giants has established dominance in a new markets.

As such, Meta can now expect to see more preventative measures against it by the FCO, which has been one of Europe’s most active competition authorities when it comes to regulating the tech giants.

Meta is just the second company to be given the specialist status, following Google at the start of the year. The FCO is also currently investigating whether Amazon and Apple are also of paramount significance across markets.

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2022-05-04T12:07:05+01:00

About the Author:

Tim Cross is Assistant Editor at VideoWeek.
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