Google loses challenge against EU’s €2.42bn fine

Luxembourg — Alphabet unit Google lost an appeal against a €2.42bn antitrust decision on Wednesday, a major win for Europe’s competition chief in the first of three court rulings central to the EU push to regulate big tech.

Competition Commissioner Margrethe Vestager fined the world’s most popular internet search engine in 2017 over the use of its own price comparison shopping service to gain an unfair advantage over smaller European rivals.

The shopping case was the first of three decisions that saw Google rack up €8.25bn in EU antitrust fines in the past decade.

The company could face defeats in appeals against the other two rulings involving its Android mobile operating system and AdSense advertising service, where the EU has stronger arguments, antitrust specialists say.

The court’s support for the commission in its latest ruling could also strengthen Vestager’s hand in her investigations into Amazon, Apple and Facebook.

“The General Court largely dismisses Google’s action against the decision of the commission finding that Google abused its dominant position by favouring its own comparison shopping service over competing comparison shopping services,” the court said.

The court said the commission correctly found Google’s practices harmed competition and dismissed the company’s argument that the presence of merchant platforms showed there was strong competition.

It backed the commission’s fine, citing the serious nature of the infringement and that “the conduct in question was adopted intentionally, not negligently”.

Google said it would review the judgment and that it has already complied with the commission’s order to ensure a level playing field for rivals. It did not say if it would appeal to the EU Court of Justice, Europe’s top court.

The commission welcomed the ruling, saying it would provide legal clarity for the market.

“The commission will continue to use all tools at its disposal to address the role of big digital platforms on which businesses and users depend to, respectively, access end users and access digital services,” the EU executive said in a statement.

Ongoing investigations

In other investigations, the EU watchdog is focusing on Google’s use of data and its digital advertising business. The company is seeking to settle the latter case, a person familiar with the matter said.

Thomas Vinje, a partner at law firm Clifford Chance and who advises several Google rivals, said Vestager should expand her investigation into other areas.

“Today’s judgment gives the European Commission the ammunition it needs to tighten the screws on Google in other areas where it is throwing its weight around, like in online advertising, app stores and video streaming,” he said.

Lawmaker Rasmus Andresen at the European parliament, which wants to beef up tech rules proposed by Vestager, said Europe needs both antitrust enforcement and legislation to tame US tech giants.

“Only when big tech feels economic consequences through penalties and regulation we will see change,” he said. “In addition to an adjustment of the Digital Markets Act, we call for a tightening of competition law to make it easier to split up platforms that are too dominant.” 

To augment her antitrust powers, Vestager last year proposed new rules that will force US tech giants to change their business models to ensure a level playing field for rivals.

Separately, on Tuesday, the UK Supreme Court blocked a planned $4.3bn class action against Google over allegations that the internet giant unlawfully tracked the personal information of millions of iPhone users.

Reuters