On 27 June 2017, the Commission announced it had concluded one of its investigations against a leading IT company (“Company”) with the imposition of a record fine for abusing its dominant position. This is the biggest fine the Commission has ever imposed on a single company in an antitrust case, exceeding the EUR 1.06 billion fine handed down against a leading chipmaker in 2009 (which, after being upheld by the General Court, is currently under appeal before the EU Court of Justice).
In the present case, the Commission first concluded that the Company held a dominant position in general internet search markets. This was based on the fact that the Company had consistently held a market share higher than 90% in most European Economic Area (“EEA”) countries whilst at the same time the barriers to entry were high.
EU competition rules do not prohibit dominance in itself. However, a company having a dominant position is under a “special responsibility not to allow its conduct to impair genuine undistorted competition”. Therefore, Article 102 of the Treaty on the Functioning of the EU (“TFEU”) prohibits companies from abusing their dominant position.
In this case, the Commission found that the Company’s conduct was illegal. According to the Commission, the Company had put in place a strategy ensuring a much higher visibility to its comparison shopping service compared to rival ones. In particular, it displayed the results from its comparison shopping service at or near the top of search results in its search engine. At the same time, other comparison shopping services were demoted and appeared further in search results. The EU Competition Commissioner Margrethe Vestager said that: “[the Company]'s strategy for its comparison shopping service wasn't just about attracting customers. It wasn't just about making its product better than those of its rivals. Instead, [the Company] has abused its market dominance as a search engine […]”.
The Company has recently confirmed the Commission that it will comply with its decision to treat shopping services fairly in its search results within the Commission deadline (i.e. by the end of September). This case poses substantial challenges to the Company as it impacts its business model and is not the only case against that Company. The Commission is still investigating two other cases in which it allegedly abused its dominant position. One of these investigations involves the Company’s mobile operating system. This case could potentially be the most damaging for the Company, as it is the system used in most smartphones.