Today’s ruling was a key test in the EU’s competition commissioner Margrethe Vestager’s campaign to hold Big Tech to account.
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Google’s attempt to challenge a $2.8 billion antitrust fine for favoring its own shopping services in search results was rejected by Europe’s second-highest court providing a boost for the European Union’s competition commissioner Margrethe Vestager’s Big Tech antitrust campaign.
The ruling from the EU’s General Court confirmed that Google’s parent company Alphabet had broken antitrust rules by favoring its own in-house price comparison tools over smaller European rivals, and upheld the $2.8 billion fine. However the Luxembourg court rejected regulators’ claim that Google had distorted competition among search engines.
“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 in a statement. Google can still appeal the ruling to the European Court of Justice.
Europe’s Competition Watchdog
The European Commission, the EU’s top antitrust enforcer, under Margrethe Vestager has repeatedly tried to check Alphabet, and the dominance of other Silicon Valley giants in recent years. Google is currently fighting in the EU courts a $5 billion fine, the largest ever antitrust penalty from Brussels, levied in 2018 for its control over the Android operating system, and a $1.7 billion fine in 2019 for allegedly engaging in “illegal practices” to maintain its lead in online advertising.
Today’s ruling provides a boost for Vestager’s campaign after the European Commission lost a court case in July 2020 over whether the Irish government broke state aid rules by awarding Apple $15 billion in tax breaks. The case has been appealed to the EU’s highest court but it could take years for a final ruling to emerge.
That setback came shortly after Vestager’s antitrust unit opened an investigation in June into whether Google favored its own online advertising technology like Google Ad Manager on YouTube to squeeze out European rivals, and publishers. This investigation would cut to the heart of Google’s business in display advertising but the potential penalties that can be levied by the EU are dwarfed by the scale of Alphabet’s recent record-breaking profits but a new law could strengthen Vestager’s hand.
The Digital Markets Act was unveiled in December 2020 and faces a long journey to approval by the EU’s lawmakers but would class companies like Alphabet as “gatekeepers” and could potentially force them to sell off units, or bind them not to rank internal products like Chrome over rivals. Today’s ruling will also provide a boost to Google’s European price comparison rivals like Kelkoo who have filed multi-billion dollar damages lawsuits off the back of the European Commission finding.
A Gathering Storm
Alphabet, Apple, Facebook and Microsoft don’t only face challenges from Brussels. A growing international pushback on the dominance of Big Tech from lawmakers and antitrust regulators threatens further scrutiny at every step. Australia’s antitrust regulator has called for laws to break Google’s lock over the local display advertising market while the U.K’s increasingly activist Competition And Markets Authority has opened a probe into changes to Alphabet’s Chrome browser.
Across the Atlantic, Alphabet faces a trio of major antitrust lawsuits in the United States. The Department of Justice was joined by 11 Republican state attorney generals in June 2020 to sue Google over its tactics to remain the de facto search engine on many devices and browsers, while in December a coalition of 38 states sued Google over claims it designed search results to favor its own services, while a third lawsuit also filed in December claims Google and Facebook worked together on advertising sales.
A Minor Victory
Google does however have some cause to celebrate after the U.K.’s Supreme Court earlier on Wednesday blocked a class action lawsuit that was seeking $4.3 billion in damage over claims that it had illegally tracked the personal data of around 4 million Apple iPhone users. The ruling represents a setback for similar cases against tech giants like TikTok and Facebook over data handling that are working through Britain’s courts.