Sunday, July 21, 2024

EU wins €2.4bn Google Shopping case

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Google has lost its appeal against a €2.42bn EU competition fine over its Shopping service, in a ruling that is likely to re-energise antitrust investigators looking at how Big Tech promotes its own businesses.

The European General Court in Luxembourg ruled on Wednesday that Google favours “its own comparison shopping service over competing services” in its search results, rather than delivering the “better result”.

Margrethe Vestager, the EU’s antitrust chief, accused Google in 2017, after a seven-year investigation, of abusing its market power to give an “illegal advantage” to another arm of its business. Some price comparison websites have gone bust since Google engaged in this behaviour.

Shivaun Raff, co-founder of Foundem, a now defunct shopping comparison website that was an original plaintiff in the EU’s investigation, said: “While we welcome today’s judgment, it does not undo the considerable consumer and anti-competitive harm caused by more than a decade of Google’s insidious search manipulation practices.”

Google said the judgment on Wednesday related to a “very specific set of facts” and that it made changes in 2017 to comply with the European Commission’s decision.

The ruling is likely to be appealed. But it marks the first time that a European court has ruled against Google on an antitrust case.

It also strengthens the hands of antitrust investigators looking to take on similar cases where tech companies have used their dominance in one field to successfully move into another. The practice is known as “self-preferencing”.

“The rules gives new and immediate vigour to straightforward enforcement of existing competition rules without the need to await the new legislation being adopted and coming into force,” said Alec Burnside, a partner at Dechert in Brussels who has worked with complainants against Google.

He added: “The ruling infuses more oxygen to Vestager’s move to tackle big tech. The commission took the Shopping case decision to establish a precedent and that has now been validated.”

Nevertheless Raff said the EU was moving too slowly to rein in Big Tech, saying that in the 12 years since Foundem submitted its initial competition complaint, Google has not yet been forced to “end or mitigate its unlawful conduct.”

Richard Stables, chief executive of comparison shopping site Kelkoo, said it had lost “millions of euros of revenue during this abuse and we are not seeing a fraction of that coming back”.

The European Commission said that it would “continue to use all the tools at its disposal” to try to address problems in the market.

Google is also contesting another two multibillion euro fines for alleged anti-competitive behaviour. It has been accused of abusing its dominance in the Android operating system and allegedly forcing users to use its services over rivals, and is also appealing a €1.5bn fine for blocking competitors in the online advertising market.

The cases come as the European Parliament and member states are debating how to enact new tech regulation to hold Big Tech to account.

Andreas Schwab, the MEP leading the debate on the Digital Markets Act at the European Parliament, said: “The decision of the court proves that the EU is on the right track.

“Unfortunately we have lost a lot of time for imposing our rules on the gatekeepers. This will change soon with the DMA. In the future it will be the authority to apply the law again in time — and not too late any more.”

This article has been amended since publication to correct the number of years Foundem’s competition complaint from 16 to 12.

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