The Bundeskartellamt has power to intervene earlier and more effectively against the practices of large digital companies according to the new provision (Section 19a of the German Competition Act (GWB)). Considering thish, if the Bundeskartellamt formally determines that an undertaking is of paramount significance for competition across markets, it can prohibit it from engaging in anti-competitive practices. Regarding this provision, authority has formally determined the paramount significance for competition across markets of Meta Platforms, Inc., Menlo Park, USA.
Meta is an internationally active digital corporation which is known in particular for its services Facebook (including Messenger), Instagram and WhatsApp. With features like “Stories” and “Reels” or offers like “Watch” or “Shops” Meta continuously expands its range of services. As major project for the future Meta invests in particular in hardware and software for a “metaverse”, i.e. an extensive VR world. Meta’s efforts in this regard include its acquisition of Oculus (now: Meta Quest), a manufacturer of VR headsets and technology.
Meta, being used by more than 3.5 billion people worldwide including the widely use in Germany, is also the leading provider of social media advertising, which is the company’s almost exclusive source of revenue. Considering all its operation it is seen that Meta is strong in social media ecosystem which is financed through advertising and keeps expanding.
In early 2019 the Bundeskartellamt already prohibited Meta from combining user data from different sources due to competition concerns. However, the legal dispute with Meta with regard to this decision is still pending before the courts. Furthermore, since 2020 the Bundeskartellamt has been conducting another proceeding against Meta for linking Meta Quest’s (formerly Oculus) offer of VR headsets/products with Facebook. By formally determining Meta’s paramount significance for competition across markets pursuant to Section 19a(1) GWB, the Bundeskartellamt has now established the basis for a more rapid conclusion of such proceedings.
The validity of the Bundeskartellamt’s decision is limited to five years after its entry into force in accordance with statutory provisions. Within this period Meta is subject to special abuse control by the Bundeskartellamt in Germany as set out in Section 19a(2) GWB.
Meta has announced not to appeal the decision and not to deny its status as norm addressee within the meaning of Section 19a(1) GWB. However, in doing so Meta specifically has not declared that it necessarily agrees with all the facts as established by the decision division in its decision and the conclusions drawn from these facts.
(Bundeskartellamt – 04.05.2022)
NAZALI TAX & LEGAL