How German authorities are cracking down on Google

Germany's antitrust regulator on Wednesday criticised the way Google handles users' data and threatened action against the US tech giant.

A man uses the popular search engine Google.
A man uses the popular search engine Google. Photo: picture alliance/dpa | Karl-Josef Hildenbrand

Data collected by Google was used to “create very detailed user profiles which the company can exploit for advertising and other purposes”, the Federal Cartel Authority said.

Based on a preliminary assessment, the watchdog determined that users were not given sufficient clarity on the “far-reaching processing of their data across services” by the tech company.

“General and indiscriminate data retention…  is not permissible” without giving users choice, the watchdog said.

The Federal Cartel Authority was therefore “currently planning to oblige the company to change the choices offered”, it said, adding that it expected to issue its final decision this year.

READ ALSO: Germany asks EU to rein in Twitter after ‘arbitrary’ bans by CEO Musk

“Google’s business model relies heavily on the processing of user data,” said the authority’s chief Andreas Mundt.

The digital giant had “access to relevant data gathered from a large number of different services” which meant it enjoyed “a strategic advantage over other companies”, Mundt said in a statement.

Google said in a statement it would continue its “constructive dialogue” with the Authority “in order to address their concerns”.

The warning comes after Google was classified as a company of “paramount significance across markets” in 2021.

The designation gives Germany’s regulators the option to intervene earlier against potentially uncompetitive practices by huge digital companies.

Wielding the new legislation, the watchdog has also opened probes into US tech giants such as Amazon and Facebook.

At the end of last year, the regulator shelved a separate investigation into Google’s News Showcase service, after the firm made “important adjustments” to ease competition concerns.

Big tech companies have been facing increasing scrutiny around the globe over their dominant positions as well as their tax practices.   

In July 2022, the European Parliament adopted the Digital Markets Act to curb the market dominance of Big Tech, with violators facing fines of up to 10 percent of their annual global sales.

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German business morale improves again in March

German business confidence climbed for the sixth straight month in March, a key survey showed Monday, but analysts warned that recent banking turmoil could still rattle Europe's biggest economy.

German business morale improves again in March

The Ifo institute’s monthly confidence barometer, based on a survey of about 9,000 companies, jumped to 93.3 points, up from 91.1 points in February.

The improvement was better than expected, with analysts surveyed by Factset predicting a reading of 91.2 points.

“Despite turbulence at some international banks, the German economy is stabilising,” said Ifo president Clemens Fuest.

Lower energy prices and the reopening of China’s economy have boosted confidence in recent months, as Germany proved more resilient than initially feared to the fallout from the Ukraine war.

But the economy is not out of the woods yet, said ING bank economist Carsten Brzeski.

“We fear that the latest financial turmoil will reach the real economy in the coming months,” he said, in a nod to recent stress in the global banking system.

The impact was already visible in Germany’s closely-watched ZEW investor confidence survey last week, which fell for the first time in six months following the collapse of several US regional lenders and the forced UBS takeover of Credit Suisse.

“The Ifo index can react with a delay of one to two months to unexpected events and financial market turmoil can clearly affect the real economy over time,” Brzeski warned.

READ ALSO: EXPLAINED: How America’s banking crisis could hit consumers in Germany