Apple has been facing increased antitrust scrutiny in Germany since a new law came into effect, and the company has now lost its latest appeal.
The Bundeskartellamt (Federal Cartel Office) had argued that it should have the right to directly order Apple to make changes to the way that it runs the App Store, and a court has now granted it this right …
A key difference between US and European law
There is a fundamental difference in the US and European legal approach to antitrust issues.
In both countries, regulators need to first prove that a company has acted in a way that interferes with competition by other companies. However, US law requires them to also demonstrate that this action has resulted in actual harm to consumers, for example by proving they are paying higher prices.
In Europe, regulators only need show that the anti-competitive behavior creates the potential for consumers to be harmed. This allows them to intervene at a much earlier stage, with the idea of prevention rather than cure.
The Bundeskartellamt found that the way Apple runs the App Store creates the potential for harm, and that it therefore had the right to order the iPhone maker to change its policies. Apple appealed against this, arguing that it did not hold a dominant position in the app market, and therefore should not be subject to this law.
Apple loses appeal
Reuters reports that Apple has today lost this appeal.
Apple lost an appeal on Tuesday against a regulatory assessment that opens the iPhone maker up to stricter controls in Germany, the Federal Court of Justice ruled on Tuesday, following years of debate over the company’s market position.
Federal judges backed the German cartel office’s 2023 designation of Apple as a “company of paramount cross-market significance for competition”.
This means that Germany can now impose rules on the way in which iPhone apps are sold.
9to5Mac’s Take
The ruling was pretty much inevitable. Apple has always argued that it doesn’t have a dominant position in the sale of mobile apps as a whole, while European regulators have always taken the view that it holds a monopoly on iPhone apps, and this is what counts.
However, it’s unclear what rules the regulator may impose. European Union law already means that Apple is required to allow third-party app stores, and this has indeed happened. All of the antitrust protections sought by European regulators appear to already be available through EU law, so I’m unclear what additional steps the Bundeskartellamt may wish to take.
Photo by Mariia Shalabaieva on Unsplash
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