cartel regulations

Economics minister wants more power over upstarts

Peter Altmaier
Hoping to button up companies. Source: DPA

Germany is contemplating a revamp of its anti-competition rules to allow regulators to get a grip on rapidly growing companies before they dominate their markets. Watchdogs are concerned about the unstoppable ascension of internet giants like Google and Amazon, with hopes of reining in the next wave of upstarts.

“In the future, competition authorities must be able to intervene if a company is on the way to market dominance by unfair means,” Economics Minister Peter Altmaier told the Frankfurter Allgemeine Sonntagszeitung or FAS. His words precede the release of a Tuesday study by former competition watchdogs and economists suggesting changes to current anti-monopoly activities.

The study is to serve as the basis for a committee that will ultimately suggest changes to current competition law. The hope is that governments can step in when companies misbehave but don’t yet control a market, according to the FAS. Uber, for example, reportedly has software that can detect when one of its drivers is also working for rival Lyft, allowing it to illegally retaliate. Facebook founder Mark Zuckerberg has also been very successful in buying up rivals before they become a threat, such as the $19 billion acquisition of WhatsApp in 2014.

And the winner takes it all

Both behaviors could alert competition regulators in the future. “When it comes to digital platforms, we especially see markets that function according to the winner-takes-it-all principle. But the best company for consumers should be the one that succeeds on the free market,” Mr. Altmaier said.

Regulators also want to make it easier for consumers to switch between companies and are considering forcing companies like Google to share data on consumers with each other to lessen digital advantages.

The actions come after back-to-back record fines for Google. Last year the European Commission slapped it with a €2.4 billion ($2.8 billion) fine for using its search dominance to feed traffic to its own shopping portal. Then, this summer, the Commission hit it with a €4.3 billion penalty for forcing companies that installed its Android smartphone operating system to also install 11 Google apps.

Andrew Bulkeley is an editor in Berlin for Handelsblatt Global. To contact the author: a.bulkeley@handelsblattgroup.com

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