The Court of Justice upholds the fine of €2.4 billion imposed on Google for abuse of its dominant position by favouring its own comparison shopping service. The appeal lodged by Google and Alphabet is dismissed.
When the competing price comparison site Foundem in 2009 alleged that Google demoted competitor offerings in search results and offered far more advanced technical features for its own Google Shopping ads, little did they know the turns to follow.
First, there were several years where Google and the European Commission negotiated a commitment solution to the case, which would have brought an end to the investigation without need for a formal decision on the abuse as such. At the end, the hope for a smooth commitment solution was dashed by comments from third parties, leaving no other option for the Commission than to proceed to a formal decision.
And in in June 2017, the European Commission concluded its investigation with a record breaking fine of 2.42 billion euros for abuse of dominant position by monopolizing the new market for online price comparison services and through monopoly maintenance.
The decision was (of course) appealed to the General Court which in 2021(2021) upheld all operative elements of the decision (including the fine). Even if the General Court rejected the monopoly maintenance motive, as the European Commission had failed to substantiate this theory, that was ultimately not of relevance for the outcome of the case. More importantly, the General Court also explained that it was the self-favouring of Google in combination with the simultaneous demotion of results from competing comparison services by adjustment algorithms that made up the anticompetitive behaviour, this was especially true where end-users expected neutrality. While the confirmation that self-preferencing in isolation did not make up the abuse was a welcomed clarification, the General Court added to the confusion by embracing an obligation of neutrality, at least for ultra dominant undertakings.
Google appealed to the Court of Justice on four grounds, namely that the General Court:
- failed to have regard to the fact that Google was under no obligation to grant competing comparison-shopping services non-discriminatory access to its internet search service, in particular to the ‘boxes’ intended for the product search service.
- committed several errors of law in recognising that the contested decision demonstrated that Google’s conduct deviated from the means of normal competition on the merits.
- committed errors of law in its assessment of the causal link between the alleged practices and their probable effects.
- committed an error of law in finding that the Commission does not have a duty to examine whether the alleged practices were capable of driving as-efficient competitors from the market.
Advocate General Kokott (11 January 2024) suggested that the appeal in its entirety must be dismissed. Statistically expected, the Court of Justice agreed with AG Kokott.
Today, 10 September 2024, the Court of Justice dismissed the appeal lodged by Google and Alphabet and upheld the fine of €2.4 billion imposed on Google for abuse of its dominant position by favouring its own comparison-shopping service.
Some clarifying highlights from the Court of Justice:
- […] it cannot be considered that, as a general rule, a dominant undertaking which treats its own products or services more favourably than it treats those of its competitors is engaging in conduct which departs from competition on the merits irrespective of the circumstances of the case (p 186)
- However, in the present case, the General Court, in upholding the Commission’s analysis, did not merely note the existence of such more favourable treatment by Google of its own comparison shopping service, but established that, having regard to the characteristics of the upstream market and the specific circumstances identified, the conduct at issue, with its two components, namely the highlighted presentation of its own results and the demotion of those of competing operators, was discriminatory and did not fall within the scope of competition on the merits. (p 186)
- It is not the purpose of Article 102 TFEU to prevent an undertaking from acquiring, on its own merits, a dominant position on a market, or to ensure that competitors less efficient than an undertaking in such a position should remain on the market. On the contrary, competition on the merits may, by definition, lead to the departure from the market or the marginalisation of competitors which are less efficient and so less attractive to consumers from the point of view of, among other things, price, choice, quality or innovation. (p 164)
Link to the verdict on CURIA, CURIA - Documents (europa.eu)
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