The Bundeskartellamt (German Federal Competition Authority) has targeted online marketing.
The occasion.
The authority thus follows the call of some market players that large companies such as Google and Facebook have set up closed systems, so-called “walled gardens”, which made the market opportunities of smaller players more difficult. Due to these complaints and the great economic importance of online marketing – in Germany alone, the market volume amounts to up to nine billion euros – the Bundeskartellamt has initiated a sector inquiry.
The sector inquiry.
If rigid prices or other circumstances suggest that competition may be restricted or dis-torted, the Bundeskartellamt may investigate the relevant industry or sector as a whole. The market study is not directed against individual companies. The aim of such an in-vestigation is much more than that: to gain comprehensive knowledge of the structure of the sector and its business practices. In the past, the Bundeskartellamt has often initiated antitrust proceedings on the concerned markets as a result of sector inquiries.
The procedure.
Initially, the Bundeskartellamt will hold discussions with companies operating in the field of online advertising in order to identify market structures and further narrow down the matter of the investigation. In this context, the Office will deal in particular with options for measuring visibility, collecting data and preventing fraud as well as with services procuring ad spaces. It will then send its first questionnaires to market participants in the spring of 2018. After evaluation of the responses, the Bundeskartellamt will publish a final report.
The context.
Online commerce is increasingly becoming the focus of competition law: only last May the European Commission completed its sector inquiry on e-commerce (read the final report here). A few months later, in the “Coty” case, the European Court of Justice dealt with the admissibility of selective online distribution systems (click here for the ECJ’s press release). At the end of this year, the EU Commission plans to restrict geoblocking in online trade, which makes it more difficult for consumers to purchase goods and services from abroad, by means of an EU regulation. (More information on geoblocking can be found here).
The consequences.
Since antitrust violations can have serious consequences, the findings of the sector inquiry should be taken into account in the future contract design. It is worthwhile to make adjustments at an early stage. Otherwise, there is a risk of severe fines and high cartel damage claims. Old and new contracts may also be null and void, so that the contracting parties are no longer bound by these contracts.
(15 February 2018)