EU court upholds $2.7 billion antitrust fine against Google

LUXEMBOURG (CN) — The European Union’s second-highest court on Wednesday upheld a $2.7 billion antitrust fine against Google’s parent company Alphabet for anti-competitive behavior. 

The European General Court held that Google abused its dominance in online search to illegally promote its own shopping comparison service over rivals and upheld the EU’s billion-dollar fine. 

In 2017, the European Commission, the EU’s executive body, slapped the tech giant with a 2.4 billion euro ($2.7 billion) fine for breaching antitrust regulations, following a seven-year investigation. At the time, it was the highest ever fine the commission handed down. Regulators found that the company used its search product, Google Search, to boost its own price comparison website, Google Shopping, over competitors. At the time, around 95% of online searching was done via Google. 

Google contested the fine, arguing during hearings before the Luxembourg-based General Court on Valentine’s Day 2020 that its algorithm was simply connecting consumers to the products they wanted and its dominance was due to offering a superior product. 

In Wednesday's ruling, the five-judge panel found no “objective justifications” for Google’s behavior. “In reality, Google favours its own comparison shopping service over competing services, rather than a better result over another result,” the court wrote in a statement. 

However, the court didn’t agree with the commission that Google was abusing its power in the search market. The EU was unable “to show that there are anticompetitive effects, even potential effects” the court wrote. This makes the path for the EU's two other cases against Google pending before the court – involving a 1.49 billion euro ($1.7 billion) fine for abusing its search dominance in the online ad market and a 4.34 billion euro ($5 billion) fine for abusing the dominance of its Android mobile operating systems – more difficult. 

Wednesday’s ruling was met with mixed reactions. The European Commission’s antitrust czar Margrethe Vestager celebrated the decision as a win.

“Today's judgment delivers the clear message that Google's conduct was unlawful and it provides the necessary legal clarity for the market,” she said in a statement. Vestager has been engaged in a crackdown on tech companies the EU sees as monopolies abusing their market position.

But the originator of the complaint, British comparison shopping site Foundem, was less enthusiastic.

“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,” said Shivaun Raff, the company’s co-founder. 

The length of time the process has taken - the investigation was first opened into Google’s behavior in 2010 - has also drawn ire. Both Google and the EU could appeal the General Court's decision to the European Court of Justice, a process that would likely drag on for several more years. 

In an emailed statement, Google said that it was reviewing the decision. “Our approach has worked successfully for more than three years, generating billions of clicks for more than 700 comparison shopping services,” a company spokesperson said. They didn’t say whether the tech giant plans to appeal. 

Google has already paid the fine and adjusted its business practices, but comparison shopping rivals say the company is still undercutting them. Such behavior has prompted the EU to draw up new competition rules. A draft law — the Digital Markets Act — would expand the power of regulators, giving them new tools to block companies from growing too large. It is expected to pass next year. 

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