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German Federal Cartel Office continues fight against over-powerful internet platforms

FOCUS: Germany's Federal Cartel Office is continuing a fight against what it sees as the risk of content and demand becoming concentrated in a small number of internet platforms.24 Jan 2017

In a recent press release, the office noted that it has ended proceedings in a case against Audible and Apple.

Audible, owned by Amazon since 2008, is the world's largest seller and producer of downloadable audiobooks and other spoken-word content. Previously, audio books from Audible were only available through Apple's iTunes store.

However, after discussions with the European Commission and the German regulator the two companies agreed to end their exclusivity obligations. Audible will now be free to supply its books through third party platforms, and Apple will be able to source books from other suppliers.

This represents a victory for the Federal Cartel Office, and falls nicely in line with its policy of preventing any one platform from becoming too powerful. The office has a task force set up specifically to look at such internet platforms, and works on the theory that more content, and particularly exclusive content, attracts more demand, and more demand in turn attracts more content and so on, in what is known as a 'network effect'. This allows a platform to become increasingly powerful until there are no competitors left in the market, known as the 'tipping' of the market.

This interesting case has shown that the Federal Cartel Office and its task force are unafraid to go into battle on such cases and that the European Commission will work with it to reach a satisfactory result. 

Michael Reich is a competition law expert with Pinsent Masons, the law firm behind Out-Law.com.