Google does not invalidate EU antitrust decision on €2.42 billion purchases

Google’s challenge to a 2017 EU antitrust ruling relating to its shopping comparison service (Google Shopping) was largely rejected by the General Court of the European Union.

This is an important victory for the Commission’s antitrust division, which has carried out a number of enforcement actions against large technology companies in recent years, including many decisions against Google. But this summer, he lost a major case against Apple’s back taxes.

Today, the EU General Court upheld a €2.42 billion fine imposed more than four years ago on Google and its parent company Alphabet for antitrust abuses related to Google Shopping, a product comparison service.

It is unclear whether Google will attempt to file further appeals against Google Shopping. When asked about this, the spokesman declined to comment.

Back in 2017, the Commission found that Google had abused its dominance in search by giving prominence to its comparison shopping service of the same name while demoting competitors in organic search results.

Google and its parent Alphabet appealed the decision, but the Court dismissed most of their claims, agreeing that the sanctioned actions were anticompetitive and that Google favored its own price comparison service over competing services rather than providing a better result.

In its press release regarding the judgment, the Court also points to another problematic tactic, writing: “Although Google subsequently enabled competing price comparison sites to improve the display quality of their results by appearing in ‘boxes’ in exchange for payment, the Court noted that this service consisted in that price comparison sites have changed their business model and are no longer direct competitors of Google, becoming instead its customers.

In additional findings, the Court acknowledged that Google’s anticompetitive conduct had harmful effects on Google’s competitors. It also rejected Google’s argument that competition in price comparison services remains strong due to the presence of marketplaces in that market, agreeing with the Commission’s assessment that those marketplaces do not operate in the same market.

In a bright spot for Google, the Court found that the Commission had failed to demonstrate that the tech giant’s conduct had (even potential) anti-competitive effects in the market for general search services. It therefore annulled the finding of infringement only in respect of that market.

However, it reiterated the Commission’s analysis of the market for specialized price comparison services (and Google’s anti-competitive activities in this market).

The Court also rejected Google’s claim that its conduct was objectively justified because it “improved the quality of its search service.”

It also rejected another request from Google regarding technical limitations preventing it from ensuring equal treatment.

“Google has not demonstrated performance gains associated with this practice that would counteract its negative impact on competition,” it added in a press release.

In upholding the amount of the fine imposed by the Commission, the Court noted that the part of the decision it annulled had no impact on the amount of the fine (‘because the Commission did not take into account the value of sales on that market in order to determine the basic amount of the fine’); and emphasized what is described as the “particularly serious nature of the breach” – also taking into account the fact that the conduct was intentional and not negligent.

The commission said the judgment “sends a clear signal that Google’s conduct was unlawful and provides the market with necessary legal clarity.”

“The price comparison service provides consumers with an important service at a time when e-commerce is becoming increasingly important to retailers and consumers. As digital services have now become ubiquitous in our society, consumers should be able to rely on them to make informed decisions and impartial choices,” the Commission said in a statement.

It added that it would continue to use “all the tools at its disposal to address the role of large digital platforms from which businesses and users access end-users and digital services respectively” – pointing to its regulatory proposal for the Digital Markets Act. which the European Parliament and the Council are currently debating and which it claims aims to ensure “fairness and competitiveness”.

In response to the ruling, in a statement, a Google spokesperson sought to downplay any significance of the ruling, writing:

However, one of Google’s competitors in the local search space – Yelp – upheld the ruling, saying it established a framework for “a rapid assessment of the illegality of this type of behavior in other industries” and calling on the Commission to take action against Google over local search.

“Whine “Welcomes today’s ruling by the European Court of Justice which found Google guilty of abusing its dominant position in general search to eliminate competitors in vertical search services without any performance justification,” Luther Lowe, vice president for public policy, said in a statement. “While the decision focuses on price comparison, it establishes a framework to quickly assess the illegality of this type of behavior in other industries, namely local search. The local search market has yet to tip over, and European consumers conduct local searches on Google billions of times a week.

“Rather than accept a pyrrhic victory, the European Commission must now take this positive precedent and prosecute Google for parallel abuses in the local search market and enable services such as Whine compete on a substantive level,” he continued. “It may be hard to remember now, but Google and its Big Tech representatives weren’t always so unpopular. In 2015, Vice President Vestager showed incredible courage in showing the world that Google’s abuses are unacceptable. She should be commended for this courage.

“However, history’s verdict on this period will depend on whether this odyssey ultimately delivered a tangible impact on European consumers, so it is vital that these tools are used in markets where competition can still be saved.”

Meanwhile, Google already has plans to appeal other EU competition law findings (Android and AdSense), as well as an open EU investigation into its advertising technology – not to mention a number of antitrust cases in its home country.

So his lawyers will be very busy, regardless of the consequences of today’s loss.