European Court upholds € 2.42B fine for Google for favoring Google Shopping

The appeal that was lodged by Google and parent company Alphabet is dismissed. The European Court of Justice maintains the € 2.42 billion fine that was imposed by the European Commission to Google for favoring its own online shopping service.

In June 2017, former Commissioner of Competition Margrethe Verstager concluded that Google was favoring its own price comparison service Google Shopping in thirteen countries in the European Economic Area (EEA) on its general search results page.

Google Shopping results were easily recognizable: they were placed on top of the screen in ‘boxes’ with accompanying images and text information. By contrast, the competition’s comparison shopping services only appeared as common, generic search results, thus being susceptible for being demoted by Google’s algorithms.

After thorough investigation, the European Commission came to the conclusion that Google had abused its dominant position on the markets for online price comparison services and imposed a fine of € 2,424,495,000.

“What Google has done is illegal under EU antitrust rules. It denied other companies the chance to compete on the merits and to innovate. And most importantly, it denied European consumers a genuine choice of services and the full benefits of innovation,” Commissioner Vestager argued.

Google and Alphabet challenged the European Commission’s decision before the General Court. The Court ruled that there was no evidence that Google’s practices had anticompetitive effects, but found an infringement of the prohibition of abuse of a dominant position of that market.

Google and Alphabet then lodged an appeal with the European Court of Justice, seeking that the judgment of the General Court be set aside in so far as it had dismissed their action and that the Commission decision be annulled.

However, things didn’t go as planned. The European Court of Justice dismissed the appeal, thus upholding the multi-billion euro fine that was laid down by the European Commission.

“The Court of Justice states that it is true that 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. However it finds, in the present case, that the General Court correctly established that, in the light of the characteristics of the market and the specific circumstances of the case, Google’s conduct was discriminatory and did not fall within the scope of competition on the merits,” the ruling of the European Court of Justice states.

Executive Vice-President Vestager has called the ruling of the Court “a landmark in the history of regulatory actions against big tech companies”.

“Dominant companies, as any other companies, are of course free to innovate in all fields, but in doing so, they should compete on the merits. However, they cannot lean on the competitive advantage that they hold because of their market power. Going forward, the Commission will make sure that the principles enshrined in this judgement, which is now final, are upheld for the benefit of all European consumers,” Vestager points out in a speech.

Google isn’t happy with the Court’s verdict. “This judgment relates to a very specific set of facts. We made changes back in 2017 to comply with the European Commission’s decision,” a spokesperson told Reuters.

The ruling is final and cannot be appealed.