Germany plans to intrench the internet giants like Facebook and Google by bolstering the powers of its competitive ombudsmen to avert such companies from becoming monopolies by nipping them in the bud.
Announced on Tuesday, the campaign can potentially block key players from arrogating the smaller rivals and fulfilling the pledge by Chancellor Angela Merkel’s alliance to prevent US internet companies that have become too powerful in the eyes of many German lawmakers.
Economy Minister Peter Altmaier said, “My goal is to make our competition law more effective.” He further articulated, “In doing so we must find the right balance between the growth chances of German and European platforms and preventing the abuse of market power.”
A 173-page analysis bespoke by Peter Altmaier demands that German antimonopoly watchdog should be given the authority to take action before any firm reaches a significant “game-changing moment” on its way to become a monopoly – an incident that can happen in an eyeblink owing to the way it functions as a network.
For instance, it can include limiting the attempts to prevent “multihoming”, a platform where a company demands its alliance partners to work with it exclusively and not with any of its rivals.
In its second proposition, the study’s writers put forth the argument that the supervisory body should be given the authorization to prevent the giant players from seizing the smaller rivals in a bid to sideline competitors.
LOOKING IN THE PAST
The decision reflects a widely prevailing opinion among the German regulators that European watchdog should never have approved Facebook’s arrogation of the picture-sharing app Instagram in 2012, and of messaging platform WhatsApp in 2014.
The US “family” of social networking apps now amounts up to 2.5 billion users, however, Germany, Europe’s largest economy is yet to come up with a global scale internet company.
Head of the Duesseldorf Institute for Competition Economics and a Co-author of the study, Justus Haucap said, “Looking back, it’s not clear that it was the right thing to do to allow those deals.”
The German antitrust watchdog awaits to take an action in the current investigation against Facebook after stumbling upon the fact that the social media genius exploited its market supremacy to collect people’s data without their consent or knowledge.
The Federal Cartel Office opposes the way Facebook gathers people’s data from the third-party app including WhatsApp and Instagram, and its online stalking of people who aren’t even members.
The study also puts forth a new “data-for-all” law requiring principal platform enterprises to share the data that boosts them – an idea already advocated by the leader of the Social Democrats that co-rules with Merkel, Andrea Nahles.
This would, for instance, sanction the competitors to prepare their software algorithms to a standard similar to the market leader – consequently reviving a monopolized market in the competition.
Meanwhile, the other lawmakers contend that the major platforms should be forced to open up, making it possible to chat with a friend on a social networking site without being a member of it quite similar to the functioning of mobiles and emails.
Known as interoperability, this concept was, however, not addressed by the study’s authors but remains to be backed up by the party lines in the German parliament.
Nadine Schoen, a senior lawmaker in Merkel’s conservative party said, “We must support an innovative data policy and talk about new ideas – one would be to require interoperability.”
Furthermore, Altmaier will form a panel to outline the reforms that Germany’s competition law needs based on the report’s recommendation.