Google has filed a legal appeal against a record-breaking fine handed down by the European Commission this summer for anti-competitive behavior relating to the operation of its product search comparison service, currently known as Google Shopping. The news was reported earlier by Reuters and separately confirmed by us.
In June the EC judged that Google had given the service “an illegal advantage by abusing its dominance in general Internet search” — accusing it of promoting Google Shopping in organic search results while simultaneously demoting rival services — issuing a record-breaking €2.42 billion (~$2.73BN) fine for the antitrust violations.
It’s that decision which Alphabet/Google will be hoping to overturn, buoyed by the fact that earlier this month Europe’s top court, the ECJ, ruled that a lower court should review an earlier failed antitrust appeal by Intel, pertaining to a 2009 €1.06BN EC ruling.
In the Intel case ECJ judges said the lower court must re-examine their decision to uphold the antitrust judgement — saying the court had failed to properly analyze economic aspects of the case.
And while the two cases are clearly different — and the Intel verdict remains a partial one at this stage (the sanction has not been overturned as yet) — it’s certainly unusual for Europe’s courts to rule against Commission verdicts, offering some hope to Google’s lawyers they can successful argue against the regulator’s rationale.
The Commission is reviewing its Google Shopping decision in light of the ECJ’s Intel ruling, according to Reuters. (At the time of writing spokespeople for the EC’s antitrust division had not responded to questions and requests for comment — we’ll update if we get a response.)
At the end of last month Google did take the first steps to comply with the Commission’s antitrust order against Google Shopping, submitting details of how it intends to amend the price comparison service — though these proposals have not been made public.
Not complying with the order would risk a regime of additional penalties that could be backdated to the date of any non-compliance. So it may be that Alphabet/Google is intending to seek to comply while still pursuing a legal challenge.
When reached by TechCrunch for comment a Google’s spokesman declined to confirm whether it would be complying with the Commission’s antitrust order while it pursues a legal challenge — or to answer any questions. But a spokeswoman for the ECJ told us that Google has not lodged an application for interim measures.
She added: “On average, it takes between 18 months and 2 years from the day on which an appeal is lodged to final judgment being handed down.”
So even if Google makes tweaks to the operation of Google Shopping in the short term, i.e. to avoid the risk of additional sanctions for non-compliance, years of uncertainty are being added to an antitrust investigation that has already clocked up more than six years of probes by EU regulators.
Meanwhile the Commission’s antitrust arm has two ongoing formal investigations into Google’s business practices — specifically relating to the restrictions it places on OEMs encouraging them to bundle other Google services when using the Android mobile OS; and regarding its AdSense ad placement service. In both cases Google has denied the accusations, though the EC’s competition commissioner said in June that the investigations were leaning towards further sanctions at that point.
She also said the EC is looking into other competition-related complaints against additional Google services — including image search, maps and travel search, although as yet there are no formal investigations on those fronts.
Comment