Google illegally favoured own online shopping comparison service, demoting rivals
On 27 June, the European Commission (EC) fined Google a record €2.4bn for abuse of dominance in online shopping comparison search, paving the way for a raft of damages claims.
The regulator’s seven-year probe found that Google had breached antitrust law by illegally promoting its own shopping service above others.
Google must end its illegal conduct within 90 days or face penalties of a maximum of 5% of its parent company Alphabet’s average daily worldwide turnover.
Cleary Gottlieb Steen & Hamilton partners Maurits Dolmans, Thomas Graf and Robbert Snelders acted for Google. Julia Holz co-ordinated Google’s in-house defence.
Clifford Chance partner Thomas Vinje represented eight-company complainant consortium FairSearch. Covington & Burling’s Miranda Cole advised TripAdvisor, Expedia and Trivago.
The decision ‘sets a powerful precedent’ that the EC can use to restore competition on ‘other specialised online search services’, FairSearch said.
EC competition chief Margrethe Vestager said Google’s comparison shopping service strategy had ‘abused its market dominance as a search engine by promoting its own’ service in search results. Its algorithms ‘systematically’ demoted those of competitors, she said.
Google’s activity was illegal under EU antitrust rules. ‘It denied other companies the chance to compete on the merits and to innovate’ and ‘denied European consumers a genuine choice of services and the full benefits of innovation’, Vestager said. Its shopping service was ‘far more visible in Google’s search results than its rivals’, she added.
Google said it will consider an appeal, and that its shopping comparison service ‘connects users with thousands of advertisers, large and small, in ways that are useful for both’.
Peter Willis, Bird & Bird EU competition co-head, called the decision ‘significant’. It is the EC’s largest fine on a single company.
The EC’s position ‘will be that it has fined Google not because it is a large US tech company, but because it has abused its dominant market position by squeezing out its rivals in related markets’, Willis said.
The finding will likely enable ‘a series of damages claims to be brought by the rivals that were excluded from the market by Google’s conduct’, before the national courts.
As the EC’s decision will ‘establish Google’s liability’, a damages claim will in principle be limited to determining loss, Willis added.
Google’s search engine provides results to consumers who pay for the service with their data. Nearly all of Google’s revenues come from advertising, much of which is shown on consumer searches.
Two separate EC antitrust investigations, into Google’s use of Android and its AdSense service, remain pending.
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miriam.kenner@legalease.co.uk