The Federal Cartel Office is calling on the Google Group Alphabet to give its users more options when processing their data. The federal authority sent Google its preliminary legal assessment in the proceedings regarding Google's conditions for data processing, colloquially known as a warning.

Cartel Office: Google business model is based on user data

Based on the current status of the proceedings, the Federal Cartel Office assumes that the new regulations for digital companies (Section 19a GWB) are relevant and that Google must therefore adapt its data processing conditions and the practice based on them.

“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 companies. The company must give users sufficient options regarding the processing of their data.”

Andreas Mundt, President of the Federal Cartel Office

Highly detailed consumer profiles from many sources

Based on its current conditions, Google can combine a variety of data from a wide variety of services and, for example, create very detailed profiles about consumers that the company can use for advertising and other purposes, or can also train the functions of services.

The conditions stipulate that Google uses data, for example with the help of its own numerous services, some of which have a very wide reach, such as Google Search, YouTube, Google Play, Google Maps and the Google Assistant, but also with the help of numerous third-party websites and apps, for a wide variety of purposes collect and process across services. This also applies to data from so-called background services from Google, such as Play Services, some of which regularly collect data from Android devices.

Cartel Office: Choices are not transparent and too general

The Federal Cartel Office has come to the preliminary assessment that, based on the current conditions, users do not have sufficient choice as to whether and to what extent they agree to this extensive cross-service processing of their data. The choices offered so far are particularly too opaque and general, to the extent that Google offers choices at all.

According to the Federal Cartel Office's current assessment, sufficient options require, in particular, that users can limit data processing to the service they are using. In addition, they must also be able to differentiate according to the purposes of data processing.

Inappropriate advantage for agreeing to release rather than rejecting

The options offered must also 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. Furthermore, area-wide, cross-service retention data processing without any reason or preventatively is not permitted, not even for security purposes, without any choice for users.

Cartel wants to give Google “homework”.

The Federal Kaglertellamt therefore currently intends to order the company to redesign the options offered.

In December 2021, the authority already determined that Google has outstanding cross-market importance for competition according to Section 19a GWB.

Under this condition, the new digital regulation allows certain anti-competitive practices of such companies to be prohibited. The Federal Cartel Office bases its proceedings on German competition law. The European Digital Markets Act (DMA) will likely also apply to certain Google services in the future, the enforcement of which falls under the exclusive jurisdiction of the European Commission. The DMA also contains a regulation that addresses cross-service data processing, but only if so-called central platform services that have yet to be named by the European Commission are involved. The present procedure based on national Section 19a GWB partially goes beyond the future requirements of the DMA. The Federal Cartel Office is in contact with the European Commission on this matter.

Official procedure

The Federal Cartel Office is conducting administrative proceedings against Google. The detailed warning is initially an intermediate step that gives the company the opportunity to comment in detail on the office's preliminary assessment and to present further justifications or suggested solutions. In the end, the proceedings may be discontinued, the company may be obliged to commit, or the antitrust authorities may ban the action. A final decision on the matter is expected to be made in 2023.

Source:

Federal Cartel Office

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