The General Court of the European Union Rules that Google Abused Its Dominant Position by Upholding the Decision of the European Commission

Rekabet Hukuku

In the Case of T-612/17 Google and Alphabet v Commission, the General Court of the European Union (“Court”) upheld the fine of €2.42 billion imposed on Google by the European Commission (“Commission”) with the accusation of abusing the dominant position on the market for online general search services in 13 countries in the European Economic Area. According to the Court, Google abused its dominant position by favouring its own comparison shopping service over competing comparison shopping services.

The Commission found that the results of product searches made using Google’s general search engine were positioned and displayed in a more eye-catching manner when the results came from Google’s own comparison shopping service than when they came from competing comparison shopping services.

Moreover, the latter results, which appeared as simple generic results, were accordingly, unlike results from Google’s comparison shopping service, prone to being demoted by adjustment algorithms in Google’s general results pages. In respect of that infringement, the Commission imposed a pecuniary penalty on Google of €2 424 495 000, of which €523 518 000 jointly and severally with Alphabet, its parent company. Google and Alphabet brought an action against the Commission’s decision before the Court.

The Court dismissed for the most part the action brought by the two companies, and upheld the fine imposed by the Commission by recognising the anticompetitive nature of the practice at issue. First of all, the Court considers that an undertaking’s dominant position alone, even one on the scale of Google’s, is not a ground of criticism of the undertaking concerned, even if it is planning to expand into a neighbouring market. However, the Court found 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.

The Court rejected the arguments put forward by Google in challenging the passages of the contested decision relating to the consequences of the practice at issue for traffic and found harmful effects on competition. The Court pointed out that 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. Yet the Commission had called into question the combined effects of those two aspects, relying in that respect on numerous factors, including specific traffic data and the correlation between the visibility of a result and the traffic to the website from which that result comes, to establish the link between Google’s conduct and the overall decrease in traffic from its general results pages to competing comparison shopping services and the significant increase in traffic for its own comparison shopping service.

Following a broad assessment of the infringement, the Court concluded its analysis by finding that the amount of the pecuniary penalty imposed on Google must be confirmed.

You can find the press release on the case here.

 

Kind regards,

Zumbul Attorneys-at-Law

info@zumbul.av.tr