After AdTech and Android anti-trust cases in European Commission, Google under the scanner of German competition regulator for non-transparent data processing norms

• Google has been running into a few hurdles of late, mainly related to its practices in online advertising in the UK and EU, for its data privacy norms in France, and abuse of dominance in the Android OS space in the EU and India

• Now, the bigtech has come under the scanner of the German competition regulators for its data processing norms.

• ADIF calls for a larger probe at a global scale to ensure that such anti-competitive practices are kept in check

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Bundeskartellamt, or the Federal Cartel Office (FCO), which is Germany's national competition regulatory agency, released its preliminary legal assessment in the proceeding initiated due to Google’s data processing norms which states that Google must modify its terms for processing data and related procedures in order to comply with the new rules for big digital businesses of the German Competition Act (GWB).

The regulatory body observed that Google has a distinct competitive advantage over other businesses regarding data processing because of its long-standing access to pertinent data collected from a variety of different services. It also stated that they must provide customers enough control over how their data is handled.

Current terms of Google related to data processing

According to its existing terms, Google can aggregate a range of data from different services and use them, for instance, to generate incredibly detailed user profiles that the business can use for advertising and other purposes, or to enhance services' built-in features. As per them, Google is also permitted to collect and process data across services including through its own services like Google Search, YouTube, Google Play, Google Maps, and Google Assistant, as well as through a variety of websites and apps operated by third parties. This also applies Google's so-called background services, such as the Google Play, which collects information from Android devices.

Bundeskartellamt’s preliminary conclusion

The Bundeskartellamt has reached the preliminary conclusion that users must be able to restrict the processing of their data to the specific services they use, and also be able to distinguish between the different reasons for which the data are handled in order to have sufficient choice. The other concern is about retaining and processing data across services without a specified reason, be it even for security concerns, without providing users with a choice. As a result, the Bundeskartellamt is preparing to order the corporation to alter the options it provides.

The Bundeskartellamt’s judgement is currently based on the German competition law. In the future, it's possible that some Google services may be subject to the European Digital Markets Act (DMA), which is solely enforced by the European Commission.

Google’s previous hurdles with the FCO and EU

This German watchdog had already initiated a proceeding back in June 2022 into Google Maps and its possible abuses related to how Google operates it, which may be giving it an unfair advantage over competitors. The investigation is ongoing, but the primary concern is that Google may be restricting the combination of its own map services with third-party map services.

The European Commission has also already penalized Google for antitrust breaches in 3 separate cases amounting to over €8 billion. In 2017, Google was found guilty for its questionable search practices and was fined €2.4 billion. This was followed by a penalty of €4.3 billion in 2018 due to its practices in the Android operating system space and of €1.49 billion in 2020 due to its abusive practices in online advertising.

Way forward

Bundeskartellamt’s statement of objections is a first intermediary stage which provides the company with the chance to elaborate on the authority's initial evaluation and provide additional justifications for its practises or solutions to allay the Bundeskartellamt's worries. After this, it upto the authorities to decide whether they would like to to drop the claim, direct commitments to the business, or the competition authority might decide to forbid Google's actions. A final judgement can be expected in 2023.

ADIF’s view

ADIF feels that a larger probe should be conducted at a global scale to keep Google’s conduct in check and to ensure that such anti-competitive practices do not result in an unfair ecosystem where other players struggle to flourish.