On February 3, 2022, the German Federal Cartel Office (“FCO”) declared that it will not—at this stage—launch an investigation in the area of Domain Name System (“DNS”) services. Following indications from market participants, the FCO conducted a preliminary investigation lasting several months, but found that the suspicion of anticompetitive conduct in this field has not been substantiated.
In order to reach a particular website, users usually enter the website’s name into the browser, but to open the desired website, the website’s name needs to be translated into an IP-address. This service is provided by so-called “DNS resolvers” or “clients”, which perform name resolution services in the internet. DNS resolvers are usually provided by the internet access provider whose services are often set as default in the operating system. However, users can change their settings to use different proprietary or public DNS resolvers.
The market for public DNS resolvers is highly concentrated and their use has increased significantly over the last years. According to the FCO, this trend could (also) be driven by the fact that public DNS resolvers often offer encryption when accessing a website while to date, only few internet access providers offer encrypted DNS services.
In this vein, the FCO conducted preliminary investigations to identify potential antitrust infringements in the course of the introduction of encrypted DNS services. The FCO focused particularly on competing types of encryption, changes of default settings in browsers and operating systems, and DNS-related services in the area of safe browsing and child protection filters.
While the FCO’s preliminary investigations did not confirm the suspicion of any anticompetitive conduct, the FCO announced that it will continue to monitor this field and launch an investigation at a later stage if necessary.
Editors: Katharina Apel and Anna Lubberger