Meta is of paramount significance for competition across markets under new German Competition Act.
The German Federal Cartel Office (FCO), the Bundeskartellamt, has found Meta (formerly Facebook) to be of paramount significance for competition across markets pursuant to Section 19(a)1 of the new German Competition Act (“GWB”).
The main purpose of Section 19a GWB is to enable the competition authority to intervene early in sectors where individual companies might have a “gatekeeper” function to prevent potential anti-competitive effects.
Meta is only the second company to be found of paramount significance for competition across markets. Alphabet, including Google, was the first company for which the German competition authority determined such a market position pursuant to the new law, which entered force last year.
According to the German FCO, Meta with its Facebook service is dominant in the national German market for social networks for private users and holds a strong position with respect to social media advertising (though it is left open if social media advertising constitutes the relevant market on the advertising side of Facebook’s platform). Meta is further found to be operating a data-driven ecosystem of services which risks limiting competition and innovation.
Meta has announced it will not appeal the decision. Following the finding of paramount significance for competition across markets, the FCO might in the future prohibit certain actions of and behaviour by Meta pursuant to Section 19(a)2 of the GWB.
Read the FCO’s press release here.
A Frontier team advised Meta throughout the German FCO’s investigation. Frontier Economics regularly advises clients on competition matters.
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