Google Loses Appeal in E.U. Antitrust Breach Case

Google critics lobby EU's Vestager to take tougher antitrust action
Photo Via CNBC.com

The EU’s General Court, the EU’s second-most senior court, has ruled in favor of the European Commission’s fine against Google in 2017 for an antitrust breach. According to the European Commission, Google favored its own shopping comparison services over rival services and fined Google for 2.42 billion euros ($2.8 billion). Google’s parent company, Alphabet, had appealed the decision but was dismissed by the General Court. 

In a press release the court announced, “The General Court finds that, by favoring its own comparison shopping service on its general results pages through more favorable 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”. 

In response, a spokesperson for google told CNBC, “Shopping ads have always helped people find the products they are looking for quickly and easily, and helped merchants to reach potential customers. This judgement relates to a very specific set of facts and while we will review it closely, we made changes back in 2017 to comply with the European Commission’s decision.”Google has the option to appeal the verdict to the EU’s highest court.

This ruling has strengthened existing antitrust arguments against US tech firms made by Margrethe Vestager, the European Commissioner for Competition. Vestager is an aggressive antitrust enforcer and this case is one of three penalties issues by Vestager against Google.  Vestager’s legal argument in this case and other antitrust breaches is that big tech companies like Google are able to ‘self-preference”, explained by the court as “favoring its own comparison shopping service on its general results pages through more favorable display and positioning, while relegating the results from competing comparison services in those pages by means of ranking algorithms.” This is a direct violation of antitrust law.

Self-preferencing is common practice in the tech world, this case could set the precedent for antitrust laws regulating digital marketing, but not without difficulty. This case is proving that the EU and other courts have many limitations when it comes to regulating big tech companies despite Google loosing their appeal. In the United States, Google is also facing a lawsuit from Justice Department for similar anticompetitive behavior.

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