The Cartel Senate of the German Federal Court of Justice (“Court”) confirmed a landmark decision by the German Federal Cartel Office (“FCO”) that established Apple Inc.’s (together with all subsidiaries “Apple”) “paramount significance for competition across markets” under Sec. 19a(1) of the Act against Restraints of Competition (“ARC”). The Court’s ruling of 18 March 2025 marks only the second instance where the Court has ruled on an appeal against such a finding.

The case is particularly significant as it affirms the application of Germany's modernised competition law tools designed to address the challenges posed by competition in the digital world. The decision upholds the FCO’s decision of 3 April 2023 that classified Apple as having paramount significance for competition across markets - a designation that allows for enhanced regulatory oversight of the company's business practices.

Facts of the Case and Key Findings

Apple’s Market Position

According to the Court, Apple runs an unparalleled digital ecosystem, developing and selling computers, smartphones, operating systems, and consumer electronics worldwide. With a market capitalisation exceeding USD 3 trillion and revenues of USD 394.3 billion in the financial year 2022, it stands as the world's most valuable company. The iPhone generates over half of Apple's revenue, with more than 2 billion units sold globally between 2007 and 2021. Central to Apple's business model are its “proprietary” operating systems pre-installed on devices and not accessible to other manufacturers.

Legal Framework and Analysis

The Court based its ruling on Sec. 19a ARC, which establishes a two-stage regulatory approach: first, determining whether a company has “paramount significance for competition across markets”; and second, potentially prohibiting specific behaviours. The Court rejected Apple's appeal, confirming that Apple is active to a significant extent on multi-sided markets, and has paramount significance for competition across markets.

In its analysis, the Court clarified that multi-sided markets under Sec. 18(3a) ARC include not only platforms facilitating business transactions between user groups but also those that draw attention from one user group to another or technically enable interaction. Apple's activities on multi-sided markets were deemed considerable based on impressive metrics: approximately 1.7 million apps available in the Apple App Store, downloaded over 30 billion times in 2020, generating total revenue of more than USD 640 billion. In 2021 alone, Apple generated net revenue exceeding USD 15 billion from the App Store.

Regarding the threshold for finding paramount significance, the Court reaffirmed that Sec. 19a(1) ARC does not require evidence of a concrete threat to competition or actual impairment. Rather, it is sufficient that the company possesses “access to the strategic and competitive opportunities whose abstract risk potential is addressed by Sec. 19a(1) ARC”. This preventative approach reflects the underlying purpose of the legislation: Sec. 19a(1) ARC is designed to enable the FCO to exercise more effective control over large digital companies whose significant resources and strategic market positioning potentially allow them to exert considerable influence on the business activities of third parties. The provision specifically targets companies that could distort the competitive process to their own advantage and leverage their existing market power to ever new markets and sectors before traditional competition law remedies can be applied effectively.

Factors Establishing Apple’s Strategic Position

The Court identified several factors establishing Apple's strategic and competitive potential, including its extraordinary financial resources, high-quality hardware devices (particularly the iPhone), proprietary operating systems, and highly integrated products and services largely reserved for Apple device users. Additionally, the Court noted Apple's creation of what it refers to as the “Apple ecosystem”, its broad access to user data, and its considerable influence over third parties' business activities, particularly app developers who rely on Apple's support to access Apple device users.

Relationship with the EU Digital Markets Act (“DMA”)

Beyond the German competition framework, a significant aspect of the ruling addresses the intersection with EU law. The Court found that the application of Sec. 19a(1) ARC is not precluded by Apple's designation as a gatekeeper under Art. 3 DMA. Despite Apple being subject to DMA regulations since 7 March 2024, the Court noted there was no evidence that compliance with these regulations had meaningfully changed Apple's competitive position in a way relevant to Sec. 19a(1) ARC.

Furthermore, the Court determined that a referral to the Court of Justice of the European Union was not necessary, despite recent academic commentary suggesting potential conflicts between the national and EU legal frameworks.

Conclusion

The Court's decision in the Apple case represents a significant development in the application of Germany's modernised competition law enforcement toolkit. By confirming Apple's paramount significance for competition across markets, the ruling empowers the FCO to exercise enhanced oversight over Apple's business practices for a five-year period, reinforcing the effectiveness of this legislative tool.

The decision solidifies the interpretation of Sec. 19a ARC as a preventative tool designed to address the abstract risk potential posed by large digital companies with extensive market influence. It also clarifies that German competition authorities may apply their national competition rules alongside the DMA where appropriate, establishing an important precedent for the coexistence of German and EU digital market regulations.

This landmark ruling reinforces the increasing regulatory scrutiny of digital ecosystems. It is relevant to both large platform operators and users seeking to secure their position in a world rapidly changed by technology, innovation, and regulation. 

For more information or guidance in this area, please contact Stephan Waldheim or 
Gitty Narymany Shandy.

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