Google loses $2.7 billion antitrust case in major win for Brussels

(CN) — The EU’s high court on Tuesday upheld a 2.4 billion euro ($2.7 billion) fine against search giant Google for illegally promoting its own shopping comparison service over rivals.

The European Court of Justice handed the European Commission’s antitrust czar Margrethe Vestager a pair of victories, confirming a lower court ruling against Google’s parent company Alphabet and, in a separate case, ordering Apple to pay 13 billion euros ($14.3 billion) in back taxes to Ireland.

The “discriminatory conduct on Google’s part had had a significant impact on competition in that it had enabled Google to redirect, in favor of its own comparison shopping service, a large proportion of traffic,” the Luxembourg-based court wrote.

Following a seven-year investigation, Brussels slapped the tech giant in 2017 with what was then the highest fine ever given. 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 in 2020 that its algorithm was simply connecting consumers to the products they wanted and its dominance was due to offering a superior product.

A lower court upheld the fine in 2021, finding no “objective justifications” for Google’s behavior.

“It is one of the first cases against a major digital company, and this marked a shift in how companies were regulated and perceived. This paved the way for the Digital Markets Act,” Vestager told reporters after the rulings were handed down.

The commission began investigating Google for antitrust violations in 2010 as part of a sweeping effort by the EU to rein in American tech giants and force them to comply with EU rules and laws.

Vestager’s office has had mixed results in Luxembourg. In 2022, the court overturned a $1.2 billion antitrust fine against Intel for giving rebates to computer manufacturers to shut out rivals. It also annulled a $1.05 billion antitrust fine against U.S. chipmaker Qualcomm for paying smartphone maker Apple not to use chips from rival companies. Appeals on those cases are still pending.

In May, the bloc’s Digital Markets Act, or DMA, went into effect for large companies including Alphabet, Google, Apple and Facebook parent company Meta, and prohibits them from combining data across services or preferencing their own products.

In a statement, Google expressed disappointment at the outcome. “Our approach has worked successfully for more than seven years, generating billions of clicks for more than 800 comparison shopping services,” the company said in a statement.

Google is still fending off two other anti-competition fines. The EU’s lower court shaved about $200 million off the original 4.34 billion euro ($4.4 billion) fine for abusing market dominance in the mobile phone market in 2022. The company has appealed.

It has also appealed a 1.49 billion euro ($1.6 billion) fine for blocking competition in the online advertising business.

In a separate case, the court dismissed an appeal from Apple over a tax deal with Ireland. In 2016, Brussels found that Apple had enjoyed illegal sweetheart tax arrangements going back to 1991 and it ordered the company to pay 13 billion euros ($14 billion) in back taxes and interest.

Both decisions are final and cannot be appealed.

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