German FCO issues statement of objections against Google's data processing conditions | Fieldfisher
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German FCO issues statement of objections against Google's data processing conditions

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Germany

The German Federal Cartel Office (FCO) is conducting administrative proceedings against Google. According to the current state of proceedings, the FCO assumes that the Google group Alphabet must give its users more choice in the processing of their data. Based on the currently applicable conditions, Google users would not have sufficient choice as to whether and to what extent they agree to the far-reaching cross-service processing of their data, according to the FCO's assessment. This decision of the FCO represents a further step in the application of section 19a of the Competition Act (GWB) against Google, Apple, Facebook and Amazon (GAFA) (for further proceedings, for example against Meta and Amazon, see "Proceedings against Amazon based on new rules for large digital companies" and "German Federal Cartel Office classifies Meta (formerly Facebook) as a company with paramount significance for competition across markets").

 

Background

As part of its proceedings, the FCO sent Alphabet Inc, Mountain View, United States, Google Ireland Ltd, Dublin, Ireland and Google Germany GmbH, Hamburg, its preliminary legal assessment of Google's data processing conditions on 23 December 2022.

The current conditions enable Google to combine a large amount of data from a wide range of services and thus create detailed profiles- about consumers. The company can then use this data for advertising, among other things. The conditions stipulate that Google can use its own services, but also numerous third-party websites and apps, to collect data for a wide variety of purposes and process it across services.

Due to the warning, the company now has the opportunity to comment on the preliminary assessment of the FCO and to present further reasons for justification or proposals for solutions.

Google said the company's goal is always to offer products that put users first and meet the requirements of regulators, stating: "One of the ways we fulfil our responsibility is by continuously adapting our services. We will continue to engage constructively with the FCO and try to address the concerns."

 

Justification of assessment

The FCO assumes that the new regulations for digital groups (pertinent to section 19a of the GWB) are relevant and that Google must therefore adapt its data processing conditions and the practice based on them.

In December 2021, the authority found that Google has an overriding importance for competition across markets under section 19a of the GWB and therefore has the possibility to prohibit certain practices of the company that threaten competition.

Andreas Mundt, president of the FCO, said: "Google's business model is fundamentally based on the processing of user data. Google has a strategic advantage over other companies here due to its established access to relevant data from a very large number of different services. Google must be measured against the requirements of the new competition regulations for digital corporations. The company must give users sufficient choice regarding the processing of their data."

The choices offered so far are too untransparent and blanket, insofar as Google offers choices at all. Sufficient options would require, among other things, that users limit the data processing to the service they use and that they can differentiate according to the purposes of the data processing.

Moreover, the options offered must not be designed in such a way that they make it easier for users to give their consent to cross-service data processing than not to give it, according to the FCO's assessment. Furthermore, it is not permissible for data to be processed across all services on an unprovoked and preventive basis, not even for security purposes, without users having any choice.

 

Competence of FCO

In its press release, the authority announced that the European Digital Markets Act (DMA), the enforcement of which falls under the exclusive competence of the European Commission, would also be applicable to certain Google services in the future. The DMA also contains a provision that addresses cross-service data processing, but only if so-called "central platform services" yet to be named by the European Commission are involved. The present procedure on the basis of the national section 19a of the GWB partly goes beyond the
future requirements of the DMA. The FCO stated that it was in dialogue with the Commission on this matter.

 

Comment

The future course of the proceedings remains to be seen. The most likely outcome is that the proceedings will be terminated by the submission of undertakings or an adjustment of Google's data processing and a subsequent discontinuation of the proceedings.However, if the FCO and Google cannot come to an agreement, a prohibition order by the FCO could also be considered. A final decision on the matter is expected in 2023.

The warning now issued represents a further step in the FCO's action against the so-called GAFA, the large digital groups under section 19a of the GWB. On the basis of this provision, the FCO has already initiated proceedings against Facebook, Amazon and Apple, see press release of 28 January 2021press release of 18 May 2021 and press release of 21 June 2021.

 

 

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