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Digital developments in focus
| 2 minutes read

The beginning of the end? Google loses General Court challenge over Shopping fine

Today the General Court, the EU’s second highest court, largely dismissed Google’s challenge to the European Commission’s 2017 finding that Google had abused its dominant position and the EUR 2.42 billion fine imposed.

The Commission decision in June 2017 found that Google had abused its dominant position on the market for online general search by favouring Google’s own comparison shopping service (Google Shopping) over competing comparison shopping services.  In particular, the Commission found that product searches made using Google were positioned and displayed in a more eye-catching manner when the results came from Google Shopping rather than competing comparison shopping sites.  The fine imposed by the Commission as a result of the decision was the largest penalty issued by the Commission at the time.

The General Court ruling largely dismisses Google’s appeal on the following grounds:

The anticompetitive nature of Google’s conduct in favouring its own comparison shopping service while relegating the results from competing comparison shopping sites was upheld. In particular, the General Court noted that the importance of the traffic generated by Google and the behaviour of users (who concentrate on the first few results) meant that the practice was liable to result in weakening of competition in the market. The Court ruled that, in practice, overall, Google was favouring its own comparison shopping service rather than a better or more relevant result over another result.

The Commission was correct to find the practice could result in reduced traffic to competitor websites and therefore cause harmful effects on competition in respect of the market for specialised search services for comparison shopping, including the disappearance of comparison shopping services, less innovation on their market and less choice for consumers.

Google had not demonstrated efficiency gains related to its Google Shopping practices that would counteract negative effects on competition. On this point, the Court rejected Google’s argument that the practice improved the quality of its search service or that there were technical restrictions on Google providing equal treatment to competitors.

The Court rejected Google’s arguments that no penalty should have been imposed on it.  Following its own assessment of the facts, the Court found that the amount of the penalty should be upheld.

Notably, while the General Court largely ruled in favour of the European Commission, the Court did say that the Commission had failed to prove that Google had harmed the market for general search, striking out the Commission’s finding of breach on these grounds. 

There were also a number of aspects of the decision of particular relevance for competition law more broadly, including the General Court’s statement that the general results page has characteristics akin to those of an essential facility, but the Court ultimately rejected the application of stringent refusal to supply precedents. Overall, the decision, coming amid separate efforts in the EU to create new rules around big tech, may have impacts on how big tech firms more generally tackle Commission investigations in the future.

Google can now bring an appeal against the decision to the highest appeals court, the Court of Justice of the European Union, within two months and ten days.

By its judgment today, the General Court dismisses for the most part the action brought by the two companies, and upholds the fine imposed by the Commission.