EU court upholds record antitrust fine against Google for search engine dominance

Derek du Preez Profile picture for user ddpreez September 14, 2022 Audio mode
Summary:
The European General Court upheld the European Commission’s decision to fine Google, despite the internet giant having changed its policies and conducting an appeal

Brexit Europe

Google has lost its appeal to have a record antitrust fine overturned, after a European court largely upheld the European Commission’s decision that the company did abuse its market dominance by imposing unlawful restrictions on manufacturers of Android devices to consolidate the position of its search engine. 

The fine has been reduced slightly from €4.343bn to €4.125bn, but is still the largest antitrust fine to ever have been issued by the European Commission. 

The case was brought forward after the European Commission accused Google of acting illegally because it forced Android handset manufacturers to pre-install its own Google Search and Chrome browser as a condition for allowing them to offer access to its Play App Store. The issue largely being that Google derives a significant proportion of its revenue from search-based advertising, meaning it had incentive to pursue increased market dominance. 

Payments were made to large manufacturers and mobile network operators to exclusively pre-install the apps on devices. Google has since changed its terms. 

And although users during this period still had the choice to download alternative search engines and browsers, the European Commission said in 2018 that only 1% of users had done so for search and 10% had done so for browsing. 

A landmark case

The European General Court today agreed with the European Commission that the pre-installations could give rise to a ‘status quo bias’ as users tend to use apps available to them on their devices and that this advantage could not be offset by Google’s rivals. 

Making its judgement on the case, the Court said: 

The General Court largely confirms the Commission’s decision that Google imposed unlawful restrictions on manufacturers of Android mobile devices and mobile network operators in order to consolidate the dominant position of its search engine. 

Google has said that it is disappointed by the decision and that the Android operating system has provided more choice for users, not less. 

The European Consumer Organization (BEUC) welcomed the decision by the EU General Court, with its Director General Monique Goyens saying: 

Today’s General Court ruling on Google’s practices concerning Android is crucial because it confirms that Europe’s consumers must enjoy meaningful choice between search engines and browsers on their phones and tablets. The Court ruling makes clear that Google cannot abuse its strong market position to unfairly exclude competitors through a complex and illegal web of restrictions and requirements for phone manufacturers. The ruling will help to ensure that consumers can benefit from a more open and innovative digital environment. 

Google’s restrictions harmed many millions of European consumers by depriving them of genuine choice and innovation for a decade. In practice, many European consumers had no alternative to using Google’s search engine and Google’s browser Chrome on their mobile devices. If they preferred, for example, to use more innovative and privacy-friendly services, Google’s restrictions prevented them from doing so.

The European Commission’s success in this case is particularly significant as the EU seeks to take a stand against the role of US tech giants in European economies and society. The European Commissioner for the Internal Market, Thierry Breton, recently outlined the EU’s vision for playing a more ‘assertive’ role. Breton said: 

More self-assurance, secondly, regarding our ability to set our own rules of the game. I firmly believe that if we want to lead in the technological race that is taking place, we have to set our own rules and standards, and not just accept the choices of others. 

Let me reassure you, my approach will always be to regulate as little as possible, as much as needed. But if we remain an open continent, it needs to be on our terms, with us in the driving seat.

My take

It feels like the writing's on the wall for Google here, but what will be more interesting is whether or not this gives the European Commission confidence to pursue other high profile cases against technology giants in the US. There are a plethora of issues tangled up in the EU regarding privacy and data protection, as well as market dominance, which could come into play over the next few years as the Union continues to pursue its ‘assertive’ role. 

 

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