The court gave the EC an important victory, and could pave the way for more antitrust action
The first hefty antitrust fine for Google in the EU: On Wednesday, the General Court of the European Union largely dismissed Google’s legal challenge against a 2017 decision of the EC, which fined Google €2.4bn for abusing its market dominance as a search engine. Google was found to be systematically favouring its own comparison shopping service, and demoted rival comparison services in search results. Google appealed the decision in October 2017, arguing that the changes it made to its algorithms were designed to improve quality of service rather than drive traffic to Google’s own comparison shopping service. Google also maintained that the EC did not take into account competitive constraints from other companies such as Amazon and eBay.
The court’s decision is almost entirely a victory for the EC: The court recognised the anticompetitive nature of Google’s behaviour, since the company favoured its own shopping service over competing services rather than a better result over another. The company’s main argument was also thrown out. The court found that Google did not demonstrate any efficiency gains that would counteract the negative effects of its conduct on competition. Google did obtain a partial victory, since the court said that the EC did not prove harmful effects on competition in the market for general search. That part of the decision was therefore annulled, but the size of the fine was confirmed since the EC did not use the value of the general search market to set the penalty.
Antitrust authorities and rival services could seize the opportunity: The ruling vindicates the EC’s approach and could embolden antitrust authorities to take further action in Europe and elsewhere. As shown in our Platforms and Big Tech Tracker, the €2.4bn fine of 2017 was the first of three large fines issued by the EC to Google, currently totalling €8.3bn. In June this year, the EC also launched an investigation into Google’s conduct in the Adtech sector. In the US, the Department of Justice is reportedly considering mirroring the initiative. Comparison shopping services such as Kelkoo and Yelp welcomed the ruling and urged the EC to demand more substantial changes from Google, arguing that the existing remedies are ineffective. The European Consumer Organisation (BEUC) also “applauded” the ruling, and asked the EC to make sure that Google does not give preference to its own services in other markets.
