Germany fears EU digital law might loosen its antitrust grip on tech giants

With the GWB Digitisation Act, Germany has created the "world's first competition law that provides answers to the challenges of digital markets," Digital Agenda Committee Vice-Chair Hansjörg Durz (CSU) told EURACTIV, stressing that "a small piece of history" has been written. [Shutterstock]

German competition authorities have piled pressure on American tech giants since new rules came into force in January. However, the Digital Markets Act (DMA) currently being discussed at EU level may supersede the section of the German law that targets big tech. EURACTIV Germany reports.

After the Federal Cartel Office opened proceedings against Apple on Monday (21 June), all “Big Four” US tech companies are now being scrutinised by German authorities for anti-competitive behaviour.

“The fact that proceedings have now been initiated against all of the big platforms – Google, Amazon, Facebook and Apple – by the Federal Cartel Office shows that we have created a very sharp sword here,” said Falko Mohrs, a Social Democrat lawmaker who is member of the Digital Agenda Committee at the Bundestag.

The “sharp sword” Mohrs is referring to is the Act against Restraints of Competition (GWB) amendment, which came into force in January. The “core of the GWB amendment”, according to Mohrs, is section 19a which allows targeting digital platforms with a cross-market and dominant position.

“Section 19a was developed in order to be able to act more preventively and quickly and to prohibit certain behaviours and practices of powerful digital platforms,” Mohrs told EURACTIV.

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German GWB vs. EU’s DMA

With the GWB Digitisation Act, Germany has created the “world’s first competition law that provides answers to the challenges of digital markets,” said Hansjörg Durz (CSU), the vice-chair of the Bundestag’s Digital Agenda Committee.

“A small piece of history” has been written, Durz told EURACTIV. According to him, the German law has also contributed significantly to “the fact that we are now also talking in the EU about the rules of the game of a social digital market economy.”

Durz is referring to the EU Commission’s proposal for a Digital Markets Act (DMA) that was presented in December and is now being negotiated at the European level. Like the GWB, the DMA seeks to curb the dominant position of large digital companies.

However, as Mohrs emphasised, this parallel approach is not about a “competition of regulators” but about the mutual inspiration for dealing with tech giants.

Unlike the DMA, the GWB relies on abstract legal concepts to determine the targeted platforms, supported by a list of examples that were inspired by the DMA, Durz explained.

“Here we were inspired by the DMA. Examples of rules can serve as an orientation framework, especially in complex situations. However, they must not be formulated so conclusively that they have a restrictive effect,” said Mohrs.

The definition of the scope is precisely one of the main differences between the DMA and the GWB. While the German amendments only mention aspects that serve as a guideline for the Federal Cartel Office, the definition of digital conglomerates – the so-called gatekeepers – in the DMA is “static and is linked to user numbers and platform services,” Durz said.

According to Durz, the EU’s approach has the advantage that the ‘norm addressees’ are clearly defined but “bears the risk that companies become norm addressees that were not intended as such by the legislator.”

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France, Germany and the Netherlands on Thursday (27 May) released a joint statement calling for a reinforcement of the EU’s Digital Markets Act (DMA) in a range of areas, from member states involvement to merger control. 

Germany’s concerns about the DMA

However, the Commission’s DMA proposal and the GWB amendments are currently standing at odds and will need to be aligned at some point.

The DMA provides that EU countries may not impose additional legal obligations on gatekeepers. If adopted in its current form, it would therefore repeal section 19a of the GWB, which could be problematic for Germany if the DMA were to be less stringent than the GWB.

Such fears have already prompted the German, French and Dutch governments in May to call for the DMA to ensure member states have greater leeway to curb the dominant position of tech giants.

According to Mohrs, however, “national vanities” should be set aside when it comes to the DMA because taking action against globally active companies should be done at the European level.

However, if “the DMA is less stringent than Section 19a GWB, then stricter national regulations must not be displaced by the DMA,” Mohrs added.

As for Durz, he also stressed that the DMA is “one of the most important legislative projects for regulating the digital economy – in Europe, but also worldwide”. This is why he insists that some parts of the DMA need improvement.

Durz called for the DMA to be “more flexible” and “more open to changes in technology”, noting that the German approach of “abstract legal norms” is the right way to ensure the DMA can keep up with the rapid developments in digital markets.

Durz also called for national competition authorities to be more involved in the process – a request already made by the European Parliament’s DMA rapporteur Andreas Schwab.

In a draft report, Schwab called for the establishment of a “high-level group of digital regulators” to support the Commission in monitoring and complying with the rules of the DMA.

“We need a modus vivendi of cooperation between national and European competition authorities,” Schwab told EURACTIV.

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[Edited by Frédéric Simon]

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