The General Court dismisses almost in its entirety Google’s action against the decision of the Commission finding that Google abused its dominant position as a search engine by favouring its own comparison shopping service over competing comparison shopping services.
Google was accused by the Commission of systematically giving prominent placements to its own comparison shopping service (Google Shopping Service) and demoting competing comparison shopping services in the Google search results. In fact, results from Google Shopping were positioned at the very top of the general search results page and displayed in a more eye-catching manner (including pictures) while results from other comparison shopping services appeared as a simple generic result (displayed in the form of blue links). Moreover, the latter results were prone to being demoted by adjustment algorithms in Google’s general results pages. Considering that such conduct amounted to an abuse pursuant to Article 102 TFEU, the Commission imposed a pecuniary penalty on Google of 2.4 billion EUR.
In its judgment of 10 November 2021 (Google and Alphabet/Commission (Google Shopping), T-612/17), the General Court recognises the anticompetitive nature of the practice at issue, considering that, by favouring its own comparison shopping service, Google departed from competition on the merits.
In particular, the General Court notes that, given the universal vocation of Google’s general search engine, which is designed to index results containing any possible content, the promotion on Google’s results pages of only one type of specialised result, namely its own, involves a certain form of abnormality. Google’s preferential treatment toward its own shopping service was indeed not consistent with the intended purpose of a general search service.
Next, the General Court emphasises that Google’s general results page has characteristics akin to those of an essential facility as there is currently no actual or potential substitute available that would enable it to be replaced in an economically viable manner on the market. However, the General Court confirms that not every practice relating to access to such a facility necessarily means that it must be assessed in the light of the conditions applicable to the refusal to supply set out in the judgment in Bronner. Since the present case is not concerned merely with a unilateral refusal by Google to supply a service to competing undertakings that is necessary in order to compete on a neighbouring market but with a difference in treatment between Google’s own comparison shopping service and competing comparison shopping services, the General Court considers that the Commission was not required to establish that the conditions set out in the Bronner case were satisfied in order to make a finding of an infringement on the basis of the practices identified.
With regard to the effects of Google’s practices on competition, the General Court recalls that an abuse of a dominant position exists where the dominant undertaking, through recourse to methods different from those governing normal competition, hinders the maintenance of the degree of competition in the market or the growth of that competition, and that that may be established merely by demonstrating that its conduct is capable of restricting competition. Accordingly, the Commission was not required to identify actual exclusionary effects on the markets. The General Court finds that the Commission had sufficiently shown potential effects by showing that Google’s self-preferencing had led to a reduction in traffic from Google’s general results pages to competing comparison shopping services and was likely to lead to a weakening of competition. Indeed, the reduction in traffic accounted for a large share of competitors’ total traffic, that share could not be effectively replaced by other sources of traffic, such as advertising or mobile applications, and the potential outcome was the disappearance of comparison shopping services, less innovation on their market and less choice for consumers. The General Court therefore confirms the Commission’s analysis in respect of the market for specialised search services for comparison shopping.
However, with regard to the market for general search, the General Court considers that the Commission did not establish that Google’s conduct had had – even potential – anticompetitive effects on that market and therefore annuls the finding of an infringement in respect of that market alone.
The General Court then rejects Google’s arguments related to the allegedly procompetitive characteristics of its conduct, considering that Google has not demonstrated efficiency gains linked to that conduct that would counteract its negative effects on competition.
Finally, with regard to the penalty, the General Court considers that nothing prevents the Commission from penalising conduct that has been analysed for the first time by the Commission in the light of the competition rules. In addition, it points out that the Commission has a margin of discretion in the choice between the commitment and the infringement procedure and may revert to the latter procedure for finding an infringement and imposing a pecuniary penalty even after initially having embarked on a commitments procedure.
Despite the annulment in part of the contested decision, the General Court confirms the amount of the penalty. It indeed considers that the partial annulment has no impact on the amount of the fine, since the Commission did not take into consideration the value of sales on the market for general search services in order to determine the basic amount of the fine. The General Court also emphasises the particularly serious nature of the infringement and the fact that the conduct in question was adopted intentionally, not negligently, to reach the conclusion that the amount of the pecuniary penalty imposed on Google must be confirmed.
Please contact Pierre de Bandt or Jeroen Dewispelaere for further information about this case and/or for general legal advice relating to competition law.