On November 10, 2021, the General Court upheld the Commission’s decision finding that Google had committed an abuse by favoring its own comparison shopping service (“CSS”).[1] The Commission previously found that Google positioned and displayed, in its general search results pages, its own CSS more prominently than competing CSSs. The Commission imposed on Google a fine of €2.42 billion.[2] In the judgment, the General Court largely dismissed Google’s appeal against the Commission’s decision and confirmed the amount of the fine.
Abuse of favoring Google’s own CSS in terms of prominent display and positioning
The General Court first analyzed whether Google’s conduct deviates from competition on the merits. It considered how Google displayed product results on its general results pages. It found that Google favored its own CSS by (i) showing its own CSS in prominent boxes with rich display formats (called Shopping Units), while (ii) displaying competing CSSs only as generic results, which did not have rich display formats and were not prominent because they were prone to being demoted.
The General Court found that Google showing its own results prominently was a “form of abnormality,” which departed from competition on the merits and from rational conduct for a general search service. The General Court recognized that exclusionary effects alone are not sufficient to establish a violation of Article 102 TFEU. It is necessary to demonstrate that the conduct of the dominant firm departs from competition on the merits.
The General Court found that Google’s conduct departed from competition from the merits based on three specific circumstances. First, free Google traffic is an important source of traffic for CSSs. Second, users typically focus only on the top few results. And third, the proportion of traffic diverted from competing CSSs was substantial, and competing CSSs could not effectively replace it by other sources, such as winning traffic to their sites directly.
The General Court rejected Google’s argument that the Commission should have established the legal conditions for a duty to supply (indispensability and risk of eliminating competition). The General Court accepted that the case is not “unrelated to the issue of access,” but it found the conduct “can be distinguished in their constituent elements from the refusal to supply.” On that basis, the General Court held that the conduct constituted an “independent” abuse, separate from a refusal to supply. Accordingly, the Commission was not required to show that the duty to supply conditions were met. At the same time, the General Court found (unlike the Commission) that Google’s search service may have characteristics “akin to those of an essential facility” because Google’s traffic is “indispensable for competing comparison shopping services.”
Analysis of anticompetitive effects of Google’s conduct
The General Court found that the Commission had appropriately established the effects of Google’s conduct on the traffic diverted from competing CSSs, which was sufficient to show that the conduct was liable to decrease competition on the market for the comparison shopping services.
The General Court also dismissed Google’s argument that the Commission ignored the significant competitive pressure exerted by merchant platforms (e.g., Amazon), which precluded a finding of anticompetitive effects in comparison shopping. The General Court found only limited substitutability between CSSs and merchant platforms, because (i) they offer product search functions under different conditions and (ii) users typically use these two types of services in different ways.
The General Court also found that, even if merchant platforms were in the same market as CSSs, the anticompetitive effects on CSSs identified by the Commission would in any event have been sufficient to find an abuse.
On the other hand, the General Court found that the Commission had failed to establish even potential anticompetitive effects of Google’s conduct in general search. Accordingly, the General Court annulled the Commission’s finding of a competition law infringement with respect to the national markets for general search services.
No objective justification for Google’s conduct
The General Court dismissed Google’s arguments on the procompetitive rationale for showing Shopping Units and applying adjustment algorithms as improvements to its general search service. While both elements of Google’s conduct may be procompetitive improvements, according to the General Court that does not justify the unequal treatment of results between Google’s own CSS and competing CSSs. The Court seemed to accept that Google could not have treated competing CSSs equally as a technical matter, but found that this would not justify the competitive harm caused. The General Court concluded that Google did not demonstrate efficiency gains linked to the conduct which outweigh the competitive harm.
Unchanged amount of Google’s fine
The General Court dismissed Google’s argument that the Commission should have imposed no—or only a symbolic—fine, given the novelty of its theory of harm and its initial handling of the proceedings as a commitments case. The General Court held that the Commission was entitled to impose a fine on the basis that the infringement was “intentional.” This was based on Google’s awareness of (i) its dominant position, (ii) its importance as a source of traffic for CSSs, and (iii) that its conduct “undermined equality of opportunity.”
The General Court found that the Commission had committed multiple errors in calculating the fine. However, it exercised its unlimited jurisdiction to reset the fine at the original amount imposed by the Commission.
Conclusion
The Google Shopping judgment introduces two changes to the EU courts’ case law. First, the General Court seems to extend the application of the general principle of equal treatment—so far understood to apply to State measures—to conduct by non-public dominant undertakings. Second, the General Court considers practices relating to conditions of supplying access to alleged (semi-) essential facilities as a separate form of abuse of dominance, which is not subject to the duty to supply conditions.
[1] Google Shopping (Case T-612/17) EU:T:2021:763.
[2] Google Shopping (Case AT.39740), Commission decision of June 27, 2017.