President of the Federal Cartel Office, Andreas Mundt has said that Germany’s competition Regulator is looking in detail the issues related to processing of personal data and showcasing of News by Google. According to the briefing by, Bundeskartellamt, Alphabet Inc along with its subsidiary Google is under the abuse control regulations.
The step is enabled by newly incorporated provision under Section 19a of the Competition Act (GWB). The enhanced regulations enable Competition Watchdog to intervene early and effectively for keeping a check on the practices adopted by large digital companies and ensuring a fair market play for all the participant.
Andreas Mundt has said that Google is of paramount significance across markets and will take actions against Anti-Competitive Practices by Google and similar proceeding are going against other big tech companies like Amazon, Facebook and Apple.
Over the years Big Tech has become an integral part of our business world. Digital Companies are multi-operating as well as multi-sided. They provide services to their users and earned revenues from advertising.
Big Tech are able to expand their revenue based on their services almost limitlessly as there is no geographical boundaries for them. They have an unusual cost structure, wherein the initial investment to develop the technology and penetration in one time but the incremental marginal costs for increasing customers was minimal. They pose a potential entry barrier for the new entrant because of their size. The more customers they accumulate, the more data Big Tech generates enabling them to enrich their services and develop targeted advertising to earn revenues.
Technology Companies business model indicates a priority on growth over profits, i.e., they grow and creates a potential for future profits. They have demonstrated the power of data and as a result data have become the new oil of the digital economy and therefore Big Tech are in relentless pursuit to collect more data.
Globally Competition issues are occupying centre stage in digital economy. These issues are not just based on the economics of commerce but also political and social in Nature.
Due to absence of Geographical boundaries, there is complexity in determining the markets
Neutrality and fairness of the platform is key issue. Performance of the platform is driven by the quality and fairness of the underlying Algorithm. The present competition law has to keep evolving in line with the need of time. However, Competition watchdog also need to provide flexibility of innovation
Bureau Galactik Views