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By Ursula Knapp
KARLSRUHE, Germany (Reuters) -Apple lost its challenge at Germany's top civil court on Tuesday against its classification as a significant market power, a label which gives antitrust regulators more scope and flexibility to scrutinise its business practices.
Judges at the Federal Court of Justice backed the German cartel office's 2023 designation of Apple as a "company of paramount cross-market significance for competition".
With that, Apple joins Google parent Alphabet and Facebook owner Meta on Germany's growing list of tech giants subject to possible measures curbing their dominance.
Regulators worldwide have in recent years cracked down on Big Tech in an effort to open up markets to rival start-ups and give consumers more choice. The European Commission's Digital Markets Act (DMA) which became law in 2023 is seen as the benchmark.
Apple said it faced tough competition in Germany and that it disagreed with the court's decision.
"It neglects the value of a business model that places the privacy and security of users at its centre," a spokesperson for the company said in an emailed statement to Reuters.
While the court ruling is a win for the German antitrust watchdog, the crackdown by powerful EU regulators is more of a threat to Big Tech, said Assimakis Komninos, a partner at White & Case.
"The Court is saying that German legislation can stand. But the Digital Markets Act's scope is not affected and in real life it basically remains the primary standard for Big Tech," he said.
A judge had indicated in January that the German court would side with the regulator.
The court also declined to consult with the European Court of Justice in Luxembourg on the case, as requested by Apple's legal team.
Apple's App Store has faced particular scrutiny in Europe, where regulators have flagged concerns over the wealth of data it gathers on user behaviour.
Cartel office president Andreas Mundt welcomed the court ruling in a statement.
"This means that the highest court has confirmed that Apple is subject to stricter abuse control," Mundt said.
"Our ongoing review of Apple's tracking regulation for third-party apps is therefore on a solid footing, and we are working flat out on this case and other cases against the major internet companies," he added.
(Reporting by Ursula Knapp, writing by Rachel More, editing by Thomas Seythal and David Evans)
