With three cases recently closed, Google has been in the crosshairs of European Union Competition Commissioner Vestager and her team for the last few years. Google’s fines so far amount to more than €8.2 billion in total.
Yet this was not the only problem arising from the European Commission’s (EC) attention. Google has initially struggled to comply with the remedies the EC imposed in 2017 in its Google Search (Shopping) decision (Google Shopping). Eventually, in March 2019, Commissioner Vestager referred to Google’s initiatives to tackle the EC’s concerns as positive.
BACKGROUND TO THE GOOGLE SEARCH (SHOPPING) CASE
On June 27, 2017, the EC imposed a fine on Google totaling €2.42 billion. The EC concluded that Google had abused its dominant position and therefore infringed Article 102 of the Treaty on the Functioning of the European Union (TFEU) by favoring its own shopping comparison service in its general results pages over the services of its competitors. As well as imposing commitments on Google, the EC decision included a cease and desist order binding Google and its mother company Alphabet Inc., ordering Google to immediately bring the infringement to an end.
Since the opening of the investigation in 2010, Google had proposed commitments on three occasions in an attempt to address the competition concerns identified by the EC.
The first set of commitments was submitted to the EC in April 2013 following the EC’s preliminary assessment in which it considered that Google could be abusing its dominant position in four different ways.2 However, Google’s proposal failed to convince the EC and the market players that had been invited to comment. In November 2013, Google therefore offered amended commitments, which it considered made changes to provide a greater visibility for rival services and tackle other specific concerns raised by the EC; however, the EC disagreed.
In February 2014, in a third attempt to assuage the EC’s concerns, Google agreed to promote, on its general search web, three rival services on the basis of objective criteria every time it promoted its own services. The EC was receptive to these commitments, but received negative comments during its market test. Therefore, as Google failed to offer remedies that convincingly addressed the EC’s concerns, the latter issued a statement of objections (SO) in April 2015.
The EC considered that Google held a dominant position in the general search market with a market share of more than 90% in many of the countries in which the infringement was taking place and that it had abused its dominant position by favoring its own shopping comparison service in its general search results. According to the EC, Google was leveraging its dominant position in internet search to gain a competitive advantage for its shopping services, and therefore instead of competing on merit, Google was illegally promoting its services to the detriment of its competitors.
The EC considered that Google should treat its own comparison shopping services the same way as those of its competitors’.3
COMMITMENTS AND THE PATH FORWARD
In its final Google Shopping decision, the EC confirmed its preliminary position as set out in the SO and imposed a multibillion euro fine. In addition, it stated that Google had “90 days from the date of the notification of this Decision to implement measures that bring the infringement effectively to an end.” 4 With no further indication as to what it should do, it was left to Google to devise a satisfactory remedy. If it failed to do so, the EC reserved the right to impose “a daily periodic penalty payment of 5% of Alphabet’s average daily turnover in the business year preceding such a failure to comply.”5
The EC decision further stated that whatever remedial measures Google chose to adopt must: “(a) apply to all devices, irrespective of the type of device on which the search is performed; (b) apply to all users of Google situated in the thirteen EEA countries in which the Conduct takes place […]; (c) subject Google’s own comparison shopping service to the same underlying processes and methods for the positioning and display in Google’s general search results pages as those used for competing comparison shopping services […], (d) not lead to competing comparison shopping services being charged a fee or another form of consideration that has the same or an equivalent object or effect as the infringement established by this Decision.”6
Therefore it was up to Google to craft effective remedies that would put an end to its illegal conduct. The looseness of the Google Shopping decision in relation to the remedies Google must implement is surprising given the various commitment packages Google submitted to the EC over the course of the 7 years that the EC investigation was ongoing. Rather than setting out a detailed remedy package, in its final decision the EC limited itself to the statement of principle that it expected Google to “compl[y] with the simple principle of giving equal treatment to rival comparison shopping services and its own service.”7 Commissioner Vestager explained that “It is Google’s sole responsibility to ensure compliance and it is for Google to explain how it intends to do so.”8
Google devised the following remedy: everybody can bid for ad placements in Google’s Shopping search engine without having a specific slot reserved for Google Shopping or other comparison shopping services. Users can also choose whether the shopping service shows links to comparison shopping sites or directly to sites where merchants and products are available. Commissioner Vestager described these developments as “positive” in March 2019, though she noted that the EC would continue to monitor the market.9 Other EC officials have also welcomed the changes; Nicholas Banasevic, Head of Unit at EC’s Directorate General for Competition, who led the investigation, stated that Google’s changes were “an example of engagement where we see the remedy working.”10
However, doubts as to the effectiveness of the remedy remain. Rivals of Google have argued that the changes do not give sufficient prominence or detail to rival search results.11 The consumer protection association BEUC has also expressed concerns; in April 2019, it wrote to Commissioner Vestager challenging what it describes as “signals” displayed by the EC that Google’s changes are compliant with the decision.
WHAT WILL HAPPEN NEXT?
Although the EC considers that Google is on the right track, continued full compliance with the decision will be necessary or it will face another fine. Indeed, companies have been fined for failure to adequately implement remedies. In 2013, Microsoft was fined €561 million for non-compliance with commitments it had offered in 2009 to address the EC’s concerns in relation to the tying of its web browser, Internet Explorer, to its PC operating system, Windows.
Nor did Google’s woes end with the Google Shopping case. In 2018, Google faced a second EC decision imposing a fine of €4.34 billion, in the Google Android case13 (at the time of writing of this article, the decision is not yet public) and in 2019 a third decision imposing a fine of €1.49 billion in the Google Search (Ad Sense)14 — though it is unlikely that there will be compliance issues in that case, as the EC found that the infringement had ended in 2016. Additionally, March 2019 also saw reports of EC interest in the Google for Jobs search tool following a complaint in 2018, with criticisms of the tool including, again, the facts that Google allegedly favors its own results over those of rivals.15