After the German digital competition rules were updated in 2021, meta, the renamed parent company of Facebook, became the next technology giant confirmed to be bound by the German special competition abuse control system. As stated in the legal text, the rules focus on large digital companies and are considered to be "of great significance to the competition in the whole market".
The designation is valid for five years, and the law authorizes the Federal Cartel Office (FCO), the regulator, to take faster action to deal with competition issues related to meta's business by imposing operating conditions aimed at correcting antitrust abuse.
The FCO said that meta did not seek to appeal the appointment - meta confirmed this. But the social media giant disagrees with some of the findings, such as its dominant position in the private social networking market. Meta claims that other social platforms such as tiktok, youtube, snap and twitter are competing fiercely for consumers' attention.
A spokesperson for meta said in a statement on the designation:
"Although we disagree with the reasons leading to FCO's decision, our focus is still to provide our users in Germany with the best possible experience in compliance with all laws and regulations. We look forward to continuing our constructive cooperation with FCO."
As early as January this year, FCO designated Google as the first technology giant to meet the threshold of applying the ex ante competition regulation system. Shortly thereafter, with the FCO's survey of showcase brochures (which has been conducted since June 2021), it was confirmed that the technology giant offered concessions on the way Google showcase, its news licensing product, operates in the country.
FCO also has some existing cases related to the meta business - including its groundbreaking decision in 2019 to prohibit Facebook from merging user data into its series of social platforms without people's consent. Facebook challenged the order in court, arguing that the competition regulator had no jurisdiction over privacy related issues. The FCO believes that Facebook spared no effort to merge user data in order to establish a "super profile" for advertising positioning, which is equivalent to "exploitative abuse". According to German law, leading companies are not allowed to engage in this practice.
In March last year, the German court submitted some legal issues related to the "super file" case to the EU Supreme Court, which has not yet made a judgment. Therefore, whether meta is now subject to the latest German competition system or not, given that the intervention is earlier than the revised legislation, the progress of this specific antitrust intervention may still await the opinion of the European Court of justice.
Since 2020, FCO has also been investigating meta's linking the use of its VR platform oculus to owning a Facebook account as another potential anti competitive abuse.
The FCO said that designating meta as a company "of great significance to the competition in the whole market" means that it will be able to complete such procedures faster than in the future - indicating that when the technology giant seeks to implement the already expensive "shift to the meta universe", German regulators will pay attention to any unfair manipulation before meta tries to complete this transformation.
Andreas Mundt, President of FCO, commented in a statement. "Because the digital ecosystem created by meta has a large number of users, the company is a core participant in the field of social media. According to our survey, meta is also a company with outstanding cross market importance in terms of antitrust law. After sometimes controversial procedures, we have now officially determined its status. Our findings enable us to take action against any violation of competition law Efficiency is much higher than the means we have been able to use so far. Meta has abandoned its appeal against our decision.
Germany has taken the lead in updating digital competition rules to deal with the market power of large technology companies, which has become a major concern for policymakers around the world.
The EU is making similar updates to the pan EU rules to introduce a pre emptive system called the digital market law (DMA), on which EU lawmakers reached a political agreement in March.
Some procedural steps have yet to be adopted, so DMA is not expected to apply until later this year.