The EU’s General Court this morning upheld the record €2.42bn fine imposed on Google in 2017 for violating the European Commission’s antitrust laws with the way it treated searches on Google’s shopping comparison service.
The commission said this morning in a decision that “largely dismisses” Google’s challenge (and entirely upholds the fine) that it “recognises the anticompetitive nature of the practice at issue.”
It said in the ruling handed down today that:
by favouring its own comparison shopping service on its general results pages through more favourable display and positioning, while relegating the results from competing comparison services in those pages by means of ranking algorithms, Google departed from competition on the merits.
Google had challenged passages of the contested decision, saying the consequences of the practice could be reflected in search traffic – which it argued were not substantial. The General Court said “those arguments take account only of the impact of the display of results from Google’s comparison shopping service, without taking into account the impact of the poor placement of results from competing comparison shopping services in the generic results.” It ruled that this meant the practice had “effects … on competition.”
The court added that while it had taken “account of the fact that the abuse has not been demonstrated on the market for general search services, it also takes into consideration the fact that the conduct in question was adopted intentionally, not negligently.”
In 2017, the regulator found that Google had abused its market dominance as a search engine “by giving an illegal advantage to another Google product, its comparison shopping service,” and thus demoting rival services a full seven years after the probe began in 2010.
The Google search engine is Alphabet’s flagship product, providing search results to consumers who, as the commission pointed out, “pay for the service with their data.”
“Almost 90 per cent of Google’s revenues stem from adverts, such as those it shows consumers in response to a search query.”
Jonas Koponen, antitrust & foreign investment partner at the law firm Linklaters, said of the ruling: “It confirms that the commission’s analysis of such self-favouring behaviour by a dominant platform operator rests solidly in long-standing case law.”
Koponen added that the court’s ruling “vindicates the commission’s enforcement action in this first in a series of landmark ‘Big tech’ decisions. It is significant in itself, but to antitrust enforcement in the tech sector generally, and also to new regulation that is being proposed for platforms in Europe and elsewhere.”
The fine of €2.42bn amounts to a small portion of the giant’s takings, and he pointed out that “a large number of industry participants say that Google’s conduct has not changed in a way that allows flourishing competition in comparison shopping.
“Truly effective remedies remain an issue.”
Google’s lawyers have had a difficult fortnight after the firm conceded last week that it would comply with South Korea’s ruling and allow Android apps hosted on Google Play to include third-party in-app billing systems. Over in Japan, the firm on Monday became one of the targets (with Apple) in a probe into mobile OSes for antitrust issues.
Google will also certainly have countless briefs working on lawsuits all over the world having to do with its payment methods – filed variously by developers, consumers and governmental enforcers. Along with Apple, it has defended the revenue generated by its stores, saying it’s used to maintain robust software security and pay carriers and other expenses on the platform.
In the EU, the tech giant is also facing a probe into its online ads, with competition commish Margrethe Vestager saying “Google is present at almost all levels of the supply chain” for online advertising.
Before anyone feels sorry for the search behemoth, remember that it has just successfully fought off would-be class-action litigants in the UK who were looking for £3bn in their Safari Workaround ad-tracking cookie lawsuit – and that the story for this ruling – which – isn’t necessarily over.
Google can appeal today’s decision at the European Union’s highest court, the European Court of Justice.
The firm told The Reg: “Shopping ads have always helped people find the products they are looking for quickly and easily, and helped merchants to reach potential customers. This judgement relates to a very specific set of facts and while we will review it closely, we made changes back in 2017 to comply with the European Commission’s decision. Our approach has worked successfully for more than three years, generating billions of clicks for more than 700 comparison shopping services.” ®
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