Gene Glover

Few German bureaucrats have offices as lavish as Andreas Mundt's. As the president of the nation's Federal Cartel Office, or Bundeskartellamt, Mundt works from what was once known as Bonn’s “White House” – the seat of the West German government until Germany’s reunification in 1990. “We got lucky,” Mundt says, looking around the wood-panelled room. Like some of his office’s former occupants, Mundt has some potentially world-shaping plans.

One of them involves altering the way global technology companies do business. In February 2019, Mundt’s agency – which is in charge of preventing any one company from having too much power in the German economy – issued a groundbreaking decision against Facebook.


The Bundeskartellamt believes Facebook has abused its dominant position among social media platforms. At the moment, every time you log onto Facebook, it collects data about you; it does the same when you are using Facebook-owned applications Instagram and WhatsApp, or visiting a website that features a Facebook “Like” or “Share” button. As a user, you can forbid Facebook from collecting all this information. But if you do that, you cannot use Facebook any more.

The Federal Cartel Office argues that the company is forcing consent from users by taking advantage of its dominant position – as there are few alternative social networks to which dissatisfied Facebook users can turn. Worse, Facebook’s data-gobbling helps it further consolidate its dominance at the expense of potential competitors. That is why the Bundeskartellamt has told Facebook to stop combining data from all those different sources without explicit permission from each German user. Lacking that permission, Facebook can keep harvesting data, but not combine it.

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The upshot is that Facebook will have to change the way it does business, in a process akin to an internal break-up of the company. Critics have argued that the decision strays well beyond the remit of antitrust law, venturing into data privacy and consumer protection territory; Facebook has appealed against the decision in court. If the Bundeskartellamt’s decision is upheld, it would only apply to German Facebook users – but it might set an important example for regulators across the world. A string of scandals, abuses and faux pas have seen politicians in Europe and the US call for constraints on social media platforms. Privacy laws and multi-billion-dollar fines do not seem to be having much impact, though. Many hope that cartel law will.

“They are approaching the problem the right way,” says Matt Stoller, a fellow at the Open Markets Institute in Washington. “Facebook has a business model that allows them to create a manipulation machine, that they then rent out to [advertisers]. That is fundamentally dangerous. The German cartel office has come the closest to undermining [Facebook’s] ability to profit from that machine.”


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In Germany, Mundt has been described as a digital pioneer for his work. Margrethe Vestager, the formidable European Commissioner for Competition, says that the German cartel authority’s approach is very important during the current technology “industrial revolution“. Insiders say Mundt loves talking about this case – unlike Vestager, who spurns all social media but Twitter, the 58-year-old himself has accounts on Facebook, Instagram and even Snapchat, to better grasp how those platforms work – and enjoys the recognition his work is getting. Publicly, though, the Bundeskartellamt’s team is unassuming. “We‘ve also been doing a lot of work with beer and sausage cartels,” one staffer says, referring to a recent rash of grocery monopoly-related cases.

The German cartel authority first started looking at the digital economy around ten years ago, Mundt says. “We simply saw early on this was a sector of the economy where there were new competition issues at stake.” At first, he believed the internet would regulate itself; now he knows that will not happen.

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“Google’s chief economist, [Hal] Varian, always said that competition is just one click away – but at some stage I said to myself that simply isn’t true,” Mundt says. “The competitor may be a click away. But is it really competition for Google?”


Historically, German competition law tends towards a wider interpretation of what dominance is and, by 2014, scepticism about American internet giants was rising in Germany. Several senior politicians even suggested that Google be broken up. Plans were floated for a new government agency that would deal specifically with online issues – and those plans, says a German cartel law expert, might have pushed the Bundeskartellamt to take bolder action against tech giants.

Whatever the reason, by the mid-2010s, the German cartel authority had started to look more closely at online businesses, including online real estate agencies, event ticket sales, and dating platforms. In early 2015, an internal think tank was asked to work out whether theories about online competition could be translated into law. In 2016, the group released a working paper, arguing that – contrary to traditional cartel law, whose focus is generally on monopolists charging unfair prices – even if social media were free to use, they could still engage in monopolistic behaviour. Indeed, user data itself could be considered as currency. This theory would go on to underpin the case against Facebook.

Initially, the authority’s trailblazing raised eyebrows. “Previously, when I had gone to international conferences, everyone had asked me: ‘What the hell is the Bundeskartellamt doing in the Facebook case?’,” says Rupprecht Podszun, a law professor at Heinrich Heine University, in Dusseldorf. “But after the Cambridge Analytica scandal, and after [Facebook CEO Mark] Zuckerberg went to Congress, I sensed much more sympathy for this case, as if other enforcers and competition scholars were now seeing what Mundt and his team had seen earlier.”

Although Facebook is notoriously reluctant about revealing internal company data, Mundt says the German government compelled the company to hand it over or risk a fine. Building the case involved analysing that information, talking to potential competitors in the market, and surveying customers. “That’s our work – assembling many pieces of the puzzle to understand how a market really functions,” Mundt says. He will not say exactly how many of his around 350 employees – a mix of mathematicians, lawyers, data scientists and economists across 12 departments – were assigned to the Facebook case, but says that even at the busiest times, the team was only ever in the double digits. Nonetheless, he thinks Facebook, a global behemoth with 35,000-plus staff, takes the Germans seriously.

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The Bundeskartellamt’s example has often been followed. In 2013, the agency’s pressure on Amazon saw the online retailer change the rules for its suppliers, first in Germany, then in the UK, in all of Europe, and finally in the US. The Google shopping case pursued by the European Commission originated from a complaint Mundt’s office passed to Brussels.

Mundt insists that the agency’s aim is not to break Facebook up, but to change a business model that is responsible for allowing privacy breaches, fomenting political extremism, and facilitating the spread of disinformation. “In social and political terms, we as a society have got to get a handle on this,” Mundt says. “I don’t want to minimise the social and political factors but [the Bundeskartellamt] can only deal with specific [economic] aspects. If we find that the business model is anti-competitive, then we must change that business model.”

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