EU High Court Upholds EC Google Shopping Decision
A 2017 European Commission antitrust decision on Google Shopping was correct, as was the $1.7 billion fine (see 1903200004), the EU General Court confirmed Wednesday in Google and Alphabet v. Commission, case T-612/17. The court mostly dismissed Google's appeal. The ruling, which Google can appeal to the Court of Justice within two months, was cheered by consumers, rivals and the EC, which said it clears the path toward better platform regulation.
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In the contested decision, the EC sought to show Google was positioning and promoting its comparison shopping services on its general results pages more favorably than competing shopping services, driving traffic to its service and decreasing traffic to rivals', the court noted. The EC says that conduct could mean Google's dominant and anti-competitive position extending to markets other than the market in which it was already dominant -- those for specialized comparison shopping search services.
The court recognized "the anticompetitive nature of the practice," saying "Google favors its own comparison shopping service over competing services, rather than a better result over another result." Rivals were forced to change their business models, becoming Google customers rather than direct competitors. The EC correctly found harmful effects on competition, except for potential antitrust effects on the market for general search services, the court said. There were no objective justifications for Google's behavior, and the serious nature of the infringement justified the fine, it said.
The judgment "relates to a very specific set of facts and while we will review it closely, we made changes back in 2017 to comply" with the EC decision, a Google spokesperson emailed.
The judgment "delivers the clear message that Google's conduct was unlawful and it provides the necessary legal clarity for the market," said the EC. Antitrust enforcement works with EU legislative action to address specific issues that reach beyond competition law, such as the Digital Markets Act (DMA) now under discussion by the European Parliament and Council, it said.
The ruling offers strong political backing as the EU looks to regulate dominant digital platforms via both antitrust law and the DMA, blogged telecom consultant Innocenzo Genna. It also fully supports the EC's legal reasoning as it investigates Google and other platforms. Given the important issues at stake, which go far beyond the fine, it's expected that Google will appeal to the Court of Justice; but with a decision there foreseeable no earlier than 2023, the DMA might have already been adopted.
The ruling "confirms that consumers should enjoy freedom of choice based on full and unbiased information," said Monique Goyens, director general-BEUC European Consumer Organization. The decision doesn't "undo the considerable consumer and anti-competitive harm caused by more than a decade of Google's insidious search manipulation," emailed Shivaun Raff, CEO of rival Foundem, the lead complainant in the EC investigation. The judgment gives the EC a firm basis to enforce its 2017 decision, not just for the "beleaguered comparison shopping market" but also for the travel, local, jobs and other vertical search markets for which the ruling sets a precedent, she said.
Separately, the U.K. Supreme Court rejected a claim Wednesday alleging Google breached its duties as a data controller under the Data Protection Act by using the "Safari workaround" to bypass privacy settings on some 4 million Apple iPhones in 2011-12 and collecting and using users' browser-generated information. Richard Lloyd sued on his own behalf and for a class of others in England and Wales whose data was collected and sought permission to serve the claim out ot the jurisdiction. Google opposed the application.
The high court said the claim "has no real prospect of success" because it can't be brought as a class action since Lloyd made no attempt to show that Google misused personal data relating to all the phone users or that each person suffered any damage as a result of the DPA breach. However, the court noted, there's "no doubt" Lloyd could make a successful claim in his own right. Data protection authorities levied record fines this year under the EU general data protection regulation, but a "second 'under the radar' risk" exists -- being sued for damages, Pillsbury privacy lawyer Rafi Azim-Khan blogged: The decision left the door open to future damages and compensation claims for data law breaches.