Google loses appeal of $3.7 billion fine in EU anti-trust case

Google lost an appeal Wednesday (Nov 10) to overturn a landmark anti-trust ruling by European regulators against the Internet giant.
Google lost an appeal Wednesday (Nov 10) to overturn a landmark anti-trust ruling by European regulators against the Internet giant.PHOTO: REUTERS

LUXEMBOURG (NYTIMES) - In a major ruling that bolsters the European Union's efforts to clamp down on the world's largest technology companies, Google lost an appeal Wednesday (Nov 10) to overturn a landmark anti-trust ruling by European regulators against the Internet giant.

The decision by the Luxembourg-based General Court related to a 2017 decision by the European Commission, the bloc's executive branch, to fine Google 2.4 billion euros (S$3.7 billion) for giving preferential treatment to its own price-comparison shopping service over rival services.

The penalty was the first of three issued by Ms Margrethe Vestager, the European Commission's top antitrust enforcer, against Google. And with the other cases also being appealed - and additional European investigations underway against Amazon, Apple and Facebook - the case has been closely watched as a signal of the court's view of the European Commission's aggressive use of anti-trust law against American tech giants.

Google can appeal the decision to the EU's highest court, the European Court of Justice.

Amid increasing support for regulating large tech platforms in the United States and EU, courts will play a central role in determining just how far governments will be able to go when intervening in the digital economy. In the US, Google is facing a Justice Department lawsuit for anti-competitive behaviour, and Facebook is facing another from the Federal Trade Commission.

In Europe, the courts have sometimes ruled against regulators. Last year, the General Court ruled against an order to require Apple to pay 13 billion euros in unpaid taxes. Amazon also successfully appealed another order to repay taxes.

In its ruling against Google on Wednesday, the court said, "By favouring its own comparison shopping service on its general results pages through more favourable display and positioning, while relegating the results from competing comparison services in those pages by means of ranking algorithms, Google departed from competition on the merits."

Google said it was reviewing the decision but added that it had already made a number of changes to its shopping product to comply with the 2017 decision.

"Shopping ads have always helped people find the products they are looking for quickly and easily, and helped merchants to reach potential customers," the company said in a statement. "Our approach has worked successfully for more than three years, generating billions of clicks for more than 700 comparison shopping services."

The 2.4 billion-euro fine was a record at the time, before being surpassed in 2018, when the commission fined Google 4.34 billion euros for illegally using the Android operating system to bolster the use of its search engine and other services on mobile devices.

In 2019, Ms Vestager's office fined Google 1.49 billion euros for imposing unfair terms on companies that used its search bar on their websites in Europe.

The investigations of Google helped inspire stiffer new competition rules that are being drafted in the EU that target the world's largest technology platforms. The draft law - the Digital Markets Act - is expected to be adopted next year and would give European regulators new powers to intervene in the digital economy, including blocking companies like Google and Apple from giving their services preferential treatment over rivals.

Violating the new rules would result in fines of up to 10 per cent of a company's annual revenue.

Google's competitors welcomed Wednesday's ruling, but many said the investigations and court hearings had taken so long that Google had been able to further entrench its dominant position.

"While we welcome today's judgment, it does not undo the considerable consumer and anti-competitive harm caused by more than a decade of Google's insidious search manipulation practices," said Mr Shivaun Raff, chief executive officer and co-founder of Foundem, a comparison shopping service in Europe that helped bring the original complaint against Google.