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Wednesday, December 08, 2021

Google loses EU court fight over $2.8 billion antitrust fine

The court decision comes amid separate EU efforts to create new rules that will set a straitjacket for powerful firms.

By: Bloomberg |
Updated: November 10, 2021 4:13:35 pm
Google, google antitrust case, google news,Wednesday’s ruling bolsters the EU’s crusade against the powers of tech giants that’s encouraged other global antitrust regulators. (File)

Google lost its appeal of a 2.4 billion-euro ($2.8 billion) antitrust fine for allegedly thwarting smaller shopping search services, in the first of a trilogy of European Union court fights over cases that set the course for the EU’s campaign to rein in Silicon Valley.

The U.S. search giant breached competition rules and deserved the penalty doled out by the European Commission in 2017, the EU General Court in Luxembourg ruled on Wednesday.

While the regulator was largely vindicated in the ruling, judges said that regulators had failed to prove that Google had harmed the market for general search, striking out the EU’s finding of a breach. That leaves the decision solely targeting the shopping-search service.

The commission’s penalty for Google, the biggest at the time, was the first in a trio of decisions that form the centerpiece of EU Competition Commissioner Margrethe Vestager’s bid to rein in the growing dominance of big tech companies. She’s fined the Alphabet Inc. unit more than 8.2 billion euros in total and is still probing the company’s suspected stranglehold over digital advertising.

Wednesday’s ruling bolsters the EU’s crusade against the powers of tech giants that’s encouraged other global antitrust regulators, including the U.S. It may also help smaller firms to seek millions of dollars in damages claims in national courts in claims that Google hurt their nascent businesses. The result could also sway Amazon.com Inc., Apple Inc. and Meta Platforms Inc.’s Facebook to rethink how hard they fight the EU in current investigations.

The court decision comes amid separate EU efforts to create new rules that will set a straitjacket for powerful firms. Those rules are now in the final stages of negotiations and were drafted because regulators grew increasingly frustrated at the limits of antitrust probes to trigger real changes in big tech’s behavior.

Along with the fine, Google was ordered in 2017 to make changes to the way it displays shopping search results that might help rivals grab some of the valuable ad space on search pages. Smaller search services have complained the EU never pushed Google to go far enough to help them to attract sufficient visitors. EU officials argued that they can only create the conditions for firms to compete.

The Alphabet Inc. unit in September went to court again to attack the second of the EU’s three fines, a record-breaking 4.3 billion-euro penalty targeting its Android mobile phone system, and an order that struck much closer to the heart of Google’s ability to make money.

The case is: T-612/17, Google and Alphabet v. Commission.

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