Main Parties:
European Commission: responsible for enforcing competition rules and ensuring fair competition within the EU's internal market.
Google Inc: multinational technology company based in the United States of America. Google is specialized in internet-related services and products that include online advertising technologies, search, software and hardware.
Alphabet Inc: Multinational company that engages primarily in business activities in the technology sector. It is the parent company of Google so it is responsible for overseeing and managing the actions of its subsidiaries.
Context:
From the end of 2002, Google began providing a specialized search service for shopping, i.e. a comparison shopping service (CSS) in the US.
A CSS does not sell products itself, but compares and selects the offers of online sellers offering the product sought by an internet user.
Key Facts:
Google violated European competition rules by favoring its own company in general search results over competitors.
The European Commission issued a decision requiring Google to immediately cease the infringement and imposed a fine covering the period from January 2008 to the present.
Google had a dominant position in the market due to its market share in the EEA, lack of competitors due to strong barriers to entry and lack of power of advertisers and users on the platform.
Google was found guilty of abusing its dominant position by manipulating algorithms to favor its comparison shopping service, disadvantaging competitors.
Competing services experienced algorithmic ranking reductions, diminishing their visibility in Google's general search results pages.
Google's conduct had potential anti-competitive effects, including higher fees for merchants, increased prices for consumers, and reduced innovation.
Consumers' ability to access the most relevant comparison shopping services was diminished due to Google's preferential treatment.
Main Legal Issues:
The main legal issues revolve around the application of Article 102 of TFEU, which prohibits the abuse of a dominant market position, aiming to ensure fair competition within the EU. The key legal issues include:
Article 54 of the EEA agreement
The primary legal question was whether Google, as a dominant player in the online search market, abused its position by favoring its own comparison shopping service.
The European Commission examined whether Google's actions had anti-competitive effects on other comparison shopping services. If Google's conduct resulted in foreclosure of competitors or impeded their ability to compete on the merits, it would be considered an anti-competitive practice.
Art 7 of Regulation (EC) No 1/2003 outlines the establishment of the Advisory Committee on Restrictive Practices and Dominant Positions which issued favorable opinions regarding the fine imposed.
Main Legal Findings and their Impacts:
Preferential Treatment of Google's Own Comparison Shopping Service:
The Commission found evidence that Google systematically gave preferential treatment to its own comparison shopping service in its search results.
This preferential treatment allegedly involved displaying Google's shopping service prominently and providing it with more favorable positioning compared to competing services.
Impact on Competitors:
The Commission concluded that Google's actions had a negative impact on competition by impeding the ability of competing comparison shopping services to effectively reach consumers through Google's search engine.
Competitors argued that their services were pushed down in the search results, making it less likely for users to discover and choose them.
Foreclosure of Competition:
The findings suggested that Google's conduct led to the foreclosure of competing comparison shopping services from the market.
The preferential treatment allegedly hindered the competitive process, limiting consumers' choices and stifling innovation in the comparison shopping market.
The European Commission found that Google unfairly used its powerful position in 13 national markets for general search services in the European Economic Area. Google did this by reducing the visibility of competing services on its search results page and promoting its own service. This behavior could harm competition in these markets and in the related national markets for similar services. The Commission showed that Google favored its own service by displaying it prominently in dedicated 'boxes' on the search results page, while competing services were less visible as general search results with lower rankings.
Dominant Position in the Market:
The Commission confirmed Google's dominant position in the online search market, emphasizing that this dominance brought with it a special responsibility not to engage in anti-competitive practices.
this was reflected through Googles very high and stable market shares by volume, low market share of competitors, the existence of entry barriers and Googles strong reputation.
Objective Justifications Were Not Convincing:
Google's justifications for its actions were examined, but the Commission did not find them convincing or proportionate to the alleged anti-competitive effects.
Google's arguments, such as improving user experience and the quality of search results, were not deemed sufficient to justify the preferential treatment of its own service over others.
Fines and Remedies:
In response to these findings, the Commission imposed fines on Google for its anti-competitive behavior.
Additionally, Google was required to change its practices to ensure fair competition. The company had to come up with remedies that addressed the concerns raised by the Commission, aiming to level the playing field for comparison shopping services.
These legal findings collectively formed the basis for the European Commission's decision to penalize Google for abusing its dominant position in the online search market, with the goal of promoting fair competition and protecting consumer choice in the European Union.
Google´s allegations that the commission's investigation suffers from procedural errors:
Google claims that the commission has failed to assess the facts and evidence properly: In particular, the evidence relied upon by the commission has a lower probative value than the evidence relied upon by Google. Google also claims that the commission has used outdated information for the finding of dominance.
First, Google´s claims are irrelevant in this case as that claim is in effect a challenge to the merit of the commission's assessment of the conduct and therefore it has nothing to do with this case. Second, the commission's finding it is largely based on a body of evidence of high probative (internal google documents, experimental analyses…).
Google claims that its rights of defense have been infringed because, in the SSO, the Commission failed to explain how and why additional items of evidence supported the preliminary conclusions expressed in the SO. In addition, the SO and the SSO relied on “vague and obscure terminology” such as “extracted from” and “emanation”, without explaining what those words mean or what they relate to.
First, for each additional piece of evidence, the SSO set out the precise conclusion of the SO that it further supported.Second, it is apparent from Google's submissions that it well understood the terminology relied on by the SO and the SSO and what that terminology related to.
Google claims that its rights of defence have been infringed because the minutes of meetings with third parties that have been provided to it “only list the topics discussed, without recording their substance”.
First, in competition proceedings, the Commission is under no general duty to establish records of the discussions that it has with third parties. Second, the commission provided google with exact legal necessary information. (minutes of the meetings, topics…). Third, the discussions took place at the request of the third parties.
Google claims that the Commission has failed to provide adequate reasons why it reverted to the Article 7 procedure in 2014.
First, the Commission is not required to give reasons as to why it reverted to the Article 7 procedure in 2014. Second, the Commission has provided adequate reasons as to why it reverted to the Article 7 procedure in 2014. These reasons were already referred to in the SSO.
Google claims that the Commission has failed to provide it with all the information to enable it to defend itself.
First, a statement of objections must be set out, the Commission intends to take in order to bring an end to an infringement and give the undertaking concerned all the information necessary to enable it properly to defend itself. The SO and the SSO provided all the information necessary to enable Google to defend itself properly regarding the envisaged remedies.
