On 10 November 2021, the General Court of the EU (GC) issued a judgment largely dismissing Google’s appeal against the Commission's decision to fine Google €2.42 billion for abusing its dominant market position for online search services.

In 2017, the Commission found that Google’s decision to give prominent and more eye-catching placement in its search results to its own comparison shopping service (in dedicated ‘boxes’), whilst demoting rival comparison shopping services by placing them further down as simple generic results (blue links) constituted an abuse of dominance. Further to Google’s appeal of the decision, the GC has now upheld the Commission’s decision in finding that:

  • The rationale and value of a search engine lies in it being open to results from third-party links and displaying these, which enrich and enhance the credibility of the search engine; and the favouring of its own results therefore involved a certain form of abnormality – i.e., it departed from competing on the merits.
  • The deviation from competition on the merits was all the more obvious given Google’s change of conduct on the market for search services (in which it was dominant) after having decided to enter the comparison shopping search services market. After experiencing the failure of its own comparison shopping page - which Google’s own internal documents acknowledged “simply doesn’t work” - Google decided to increase the visibility of this on the general search results pages.
  • This conduct was liable to weaken competition, given e.g. the importance for comparison shopping services of traffic generated by Google’s search engine; and the behaviour of consumers, who typically concentrate on the first few results (e.g. the Commission found that by merely being moved to third rank on the first page of results halved the number of clicks).
  • The Commission had not erred in concluding the ‘essential facilities’ doctrine of case law and its conditions were not applicable in this case. Google’s general results page has characteristics akin to those of an essential facility, as there is no current genuine available substitute that would enable it to be replaced in an economically viable manner; and is therefore considered indispensable for competing comparison shopping services. However, Google's practices could be distinguished from the refusal to supply at issue in the essential facilities doctrine in case law, as it was simply a case of different treatment which gave rise to acts of discrimination.
  • An abuse of a dominant position can be demonstrated where the dominant undertaking deviates from competition on the merits and this may be established merely by demonstrating the conduct was capable of restricting competition. In other words, it is not required to identify actual exclusionary effects on the markets; and the potential outcome of Google’s conduct was the foreclosure of competing comparison shopping services, less innovation and less choice for consumers.
  • The use of the ‘as-efficient-competitor test’ is only warranted in the case of pricing practices, but not in relation to the practices in this case.
  • Whilst Google argued there were efficiency gains linked to its conduct (e.g. improving some internet users’ experience), it had not managed to demonstrate that such could counteract the negative effects on competition, including the capability of foreclosing competing comparison shopping services.

The GC therefore found the Commission was correct to conclude that Google had abused its dominant position on the national markets for general search services. Whilst Google may appeal the judgment to the Court of Justice of the EU, the GC judgment is expected to encourage the Commission in how it tackles other similar cases in the digital sector, particularly against other tech giants.

The judgment today delivers a clear message that Google’s conduct was unlawful and it provides the necessary legal clarity for the market. / European Commission spokesperson Arianna Podesta

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