Apple is currently under heightened antitrust scrutiny in Germany following the implementation of a new law, and it has recently lost its latest appeal.
The Bundeskartellamt (Federal Cartel Office) argued for the authority to directly mandate changes in Apple’s App Store operations, and a court has now upheld this authority.
A Significant Difference in US and European Legal Frameworks
There exists a critical distinction between the approaches of the US and European legal systems regarding antitrust matters.
In both regions, regulators must initially prove that a company has acted in ways that disrupt competition from other firms. However, under US law, they are also required to demonstrate that these actions caused actual harm to consumers, such as higher prices.
Conversely, European regulators only need to establish that the anti-competitive behavior poses a potential threat to consumers. This allows for intervention at an earlier stage, focusing on prevention instead of remediation.
The Bundeskartellamt determined that Apple’s management of the App Store presents potential harms, thereby granting it the authority to compel the company to amend its policies. Apple contested this decision, asserting that it does not dominate the app market and should not be subject to these regulations.
Apple’s Appeal Denied
Reuters has reported that Apple has lost this appeal.
On Tuesday, Apple lost its appeal against a regulatory assessment that exposes the iPhone maker to stricter regulations in Germany, as ruled by the Federal Court of Justice after extensive discussions regarding the company’s market standing.
The federal judges supported the 2023 designation of Apple as a “company of paramount cross-market significance for competition” made by the German cartel office.
This ruling enables Germany to impose regulations on how iPhone apps are sold.
DMN’s Perspective
The ruling was largely expected. Apple has always maintained that it does not hold a dominant position in the resale of mobile apps overall, while European regulators have consistently regarded it as monopolistic regarding iPhone apps, which is the critical factor.
Nevertheless, the specific regulations the authority may enforce remain uncertain. Existing European Union law mandates that Apple permit third-party app stores, and this requirement has been fulfilled. Most of the antitrust protections advocated by European regulators appear to already be addressed through EU statutes, leaving ambiguity about any further actions the Bundeskartellamt might pursue.
Photo by Mariia Shalabaieva on Unsplash
