On March 18, 2025, the German Federal Court of Justice (“FCJ”) confirmed the designation of Apple Inc. (“Apple”) as a company of “paramount significance for competition across markets” (“PCMS”) under Section 19a(1) of the German Act against Restraints of Competition (“ARC”) which enables the German Federal Cartel Office’s (“FCO”) to prohibit specific conduct of Apple in the future.[1] This marks the FCJ’s second ruling in which the highest court affirmed the designation decision of the FCO under Section 19a(1) ARC.[2]
The Two-Step Procedure Under Section 19a ARC
Section 19a ARC sets out a two-step procedure before the FCO can prohibit certain conduct of companies with substantial cross-market influence:[3]
- Designation of PCMS (Sec. 19a(1) ARC): The FCO first needs to show that a company has “paramount significance for competition across markets” based on a set of qualitative criteria. This includes considering the company’s role in, for example, digital ecosystems and its potential to influence competition across various markets.
- Behavioral Measures (Sec. 19a(2) ARC): Following the designation, the FCO may prohibit specific conduct to prevent distortion of competition, without having to show anti-competitive effects.
The FCO’s PCMS Designation of Apple
The FCO initiated its investigation into Apple’s market position under Section 19a(1) ARC in June 2021.[4] It concluded that Apple’s market power extends beyond individual markets, affecting competition across various sectors, like digital distribution and mobile operating systems. Apple’s significant position in these markets was seen as undermining competition, especially considering Apple’s control over its App Store and the closed nature of its ecosystem.
In April 2023, the FCO formally designated Apple as a company with PCMS according to Section 19a(1) ARC (“FCO’s Designation Decision”).[5] Apple appealed this decision to the FCJ, which rules on the designation in the first and final instance. With the appeal, Apple challenged the validity of Section 19a ARC and disputed that Apple met the criteria for such a designation.
FCJ upheld the FCO’s Designation Decision
The FCJ confirmed the FCO’s Designation Decision on March 18, 2025,and clarified several key issues in relation to (i) the validity of Section 19a ARC and (ii) the criteria for the designation under Section 19a(1) ARC:
1. Validity of Section 19a(1) ARC
- Constitutionality and Compatibility with EU Law. In its previous ruling in 2024,[6] the FCJ already held that the appeal limited to only one instance did not violate the German constitutional right, in particular the court rejected a violation of the right to be heard. By reference to its previous designation ruling, the court also reaffirmed that the national legal framework for designating companies of PCMS does not conflict with EU principles.
- “Gatekeeper” Designation under the DMA does not exclude PCMS Designation. Apple’s designation as “gatekeeper” under the EU Digital Markets Act (“DMA”) in September 2023,[7] did not prevent the FCO from designating Apple as a company with PCMS as there have not been any significant changes in Apple’s business practices since the DMA designation that did affect its competitive position.
- No Need for Referral to the ECJ. The FCJ took the view that, despite overlaps between national and the EU “gatekeeper” provisions, the case did not raise new or unresolved EU law questions. In its initial designation ruling of 2024, the FCJ already declared that Section 19a ARC is applicable in parallel with the DMA and that Section 19a(1) ARC violates neither the E-Commerce Directive nor the Transparency Directive.
2. PCMS Designation Criteria
- Operating to a significant extent on multi-sided markets. Apple operates to a significant extent on multi-sided markets within the meaning of Section 18a(3a) ARC. The FCJ clarified that “multi-sided markets” is not limited to platforms for business transactions between different user groups. Rather, it is sufficient to show that the platform draws the attention to another user group or technically enables interaction between different user groups. Thus, Apple’s operating systems for iPhones and iPads and the Apple App Store constitute multi-sided markets.
- No Concrete Risk or Impediment on Competition. Determining PCMS does not necessitate a specific competitive risk, an existing obstacle, or evidence that the target company is misusing its competitive capabilities.
- Apple’s strong market position The FCJ held that Apple meets the criteria for a company with PCMS specifically because it possess “extraordinary” financial and other resources (e.g., its ability to leverage its strong position in markets for hardware devices in other areas, its strong vertical integration, and closed Apple ecosystem). Furthermore, Apple has “broad and deep” access to user data.
Next Steps: FCO’s Continued Investigation into Apple
Following the FCJ’s ruling, the FCO will continue its investigations into Apple’s practices, particularly regarding potential self-preferencing. Apple’s App Tracking Transparency Framework (“ATTF”) is already under the FCO’s scrutiny. In an investigation launched in June 2022, the FCO examines whether Apple’s practices unfairly favor its own offerings over those of competitors.[8] On February 13, 2025, the FCO issued its preliminary findings [9] in which it views the obligation under the ATTF to obtain user consent before accessing certain data for advertising purposes that applied only to third-party app providers and not to Apple’s own services as self-preferencing potentially in violation of Section 19a(2) ARC and Article 102 TFEU. The FCO has specifically identified three main concerns:
- Definition of “Tracking”. ATTF’s definition focuses on cross-company data processing for advertising but similar practices within Apple’s own ecosystem are excluded.
- User Consent Dialogues. The consent prompts for Apple’s services appear to be designed in a more user-friendly way than those of third-party apps, possibly encouraging users to grant consent more readily to Apple.
- Restrictions on Third-Party Tracking. The ATTF’s limitations on third-party tracking may disproportionately affect competing app providers who rely on advertising revenues, thereby strengthening Apple’s market position.
If the FCO upholds its concerns, it will likely order Apple to remedy competition concerns. The FCO will therefore likely choose a different approach from the French Competition Authority (“FCA”), which imposed a €150 million fine on Apple for implementing its ATTF on March 31, 2025.[10] Both agencies are leaving it to Apple to decide how to end the alleged infringement.
Conclusion
The FCO’s investigation into Apple is one of several parallel investigations against digital cooperations with its new more extensive powers under Section 19a ARC.
Since the FCJ’s Apple decision was limited to Section 19a(1) ARC, questions remain in relation to Section 19a(2) ARC. These include the inapplicability of some provisions of Section 19a(2) ARC due to a potential breach of the notification requirement under Article 5(1) of the so-called Transparency Directive[11] or whether non-core platform services of designated DMA “gatekeepers” can also be subject to similar obligations under Section 19a(2). The FCJ’s ruling does not preclude Apple from challenging subsequent FCO decisions pursuant to Section 19a (2) ARC.
[1] Apple (KVB 61/23), FCJ decision of March 18, 2025, Press Release only available in German here. The full-text decision was not available when this article was published, but is expected to be available soon here.
[2] KVB 56/22, FCJ decision of April 23, 2024, available only in German here.
[3] See our Digital Market Regulation Handbook for Germany, available here; and our blog posts available here and here.
[4] FCO Press Release of June 21, 2021, “Proceeding against Apple based on new rules for large digital companies (Section 19a(1) GWB) – Bundeskartellamt examines Apple’s significance for competition across markets”, available in German here and in English here.
[5] Apple (B 9-67/21), FCO decision of April 3, 2023, available in German here and in English here; Press Release of April 5, 2023, available in German here and in English here.
[6] Amazon (KVB 56/22), FCJ decision of April 23, 2024, available only in German here; Press Release available in German here and in English here.
[7] Apple – online intermediation services – app stores (Case DMA.100013), Apple – operating systems (DMA.100025) and Apple – web browsers (DMA.100027), Commission decision of September 9, 2023, available in English here.
[8] FCO, Press Release of June 14, 2022, “Bundeskartellamt reviews Apple’s tracking rules for third-party apps”, available in German here and in English here.
[9] FCO, Press Release of February 13, 2025, “Bundeskartellamt has concerns about the current form of Apple’s App Tracking Transparency Framework (ATTF)”, available in German here and in English here.
[10] See FCA, Press Release of March 31, 2025, “Digital Targeted advertising: the Autorité de la concurrence imposes a fine of €150,000,000 on Apple for the implementation of the App Tracking Transparency (“ATT”) framework”, available in French here and in English here. Similar to the FCO, other EU antitrust enforcers in Italy, Romania, and Poland have initiated investigations into Apple’s ATTF (see the Italian national competition authority’s (AGCM) Press Release dated May 11, 2023 here; the Romanian national competition authority’s (Consiliul Concurenței) Press Release dated October 2023 here (only available in Romanian); and the Polish national competition authority’s (UOKiK) Press Release dated December 13, 2021 here.
[11] Directive 2004/109/EC of the European Parliament and of the Council of 15 December 2004 on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market and amending Directive 2001/34/EC.