Google and its parent company Alphabet have to be prepared for sensitive interventions in their business model.

With an important decision on Wednesday, the Federal Cartel Office created the conditions so that it can tighten the reins against the Internet giant.

To this end, the Bonn competition watchdogs classified the Internet giant as a particularly powerful company in a first step.

On this basis, they can now impose conditions and bans so that Google does not abuse its market power to undermine competition.

Helmut Bünder

Business correspondent in Düsseldorf.

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An important aspect is the wealth of data that Google has accumulated.

The Cartel Office can prevent Google from hindering competitors or closing off its market by processing “data relevant to competition”.

It would also be possible to prohibit Google from giving preference to its own offers in the search functions.

New competition rules that came into force at the beginning of 2021 include a long list of such requirements that the Cartel Office may impose in order to control particularly large digital corporations.

Similar proceedings are already running against Amazon, Apple and Meta, i.e. the Facebook group.

However, Google is the first Internet giant for which the Cartel Office has formally determined particularly far-reaching market power that justifies further steps.

"This is a very important step, because on this basis the Federal Cartel Office can now pick up specific behavior that is harmful to competition," said President Andreas Mundt.

"We have already started to deal more intensively with the processing of personal data by Google and the subject of the Google News Showcase".

Google has resigned itself to the classification

The procedure marks a paradigm shift. Before the reform of the Act against Restraints of Competition (GWB), the Cartel Office had to prove to a company that it was abusing a dominant position in order to hinder competition. Now the supervisor can intervene preventively. The prerequisite is that a digital company has "outstanding cross-market importance for competition". Google is a very natural candidate for this. In Germany, with a market share of more than 80 percent, the company is the dominant search engine and the main provider of search-related advertising.

Its digital ecosystem also includes YouTube, the Android operating system and the Playstore, all of which have very high user reach.

According to the assessment of the cartel office, Google can "specify the rules and framework conditions for other companies across the market".

The Cartel Office also sees Google's role in competition as underpinned by its huge market capitalization.

The company is currently worth almost two trillion dollars on the stock exchange.

Google has resigned itself to the classification and stated that it would not appeal against the decision of the Cartel Office.

The group is now subject to the new "special abuse control" for five years.

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