Google’s attempt to overturn a €2.4bn fine imposed by the European Commission for abusing its dominant position in the online price-comparison market has suffered a setback.
On 11 January 2024, Advocate General Kokott delivered her Opinion to the Court of Justice, proposing that the Court dismiss Google’s appeal and confirm the Commission’s fine. The Opinion comes in the appeal brought by Google LLC and Alphabet Inc. against the judgment of the General Court of 10 November 2021, which upheld the Commission’s decision finding that Google had abused its dominant position on the markets for online specialised product search services.
In a decision of 27 June 2017, the Commission imposed a fine of €2.4bn on Google for abusing its dominant position by favouring its own comparison shopping service over those of its rivals. Google displayed its own search results prominently at the top of the page and highlighted them in eye-catching “Shopping Units” with images and text. In contrast, rivals’ results only appeared as blue links further down the page. This made users more likely to click on Google’s results than those of its rivals. The Commission found that the differentiated approach resulted from Google’s “self-preferencing” of its own results, which resulted in an unfair advantage and enabled it to squeeze out competitors. In 2021 the General Court broadly upheld the Commission’s decision.
Kokott’s Opinion does criticise certain aspects of the General Court’s ruling, but nevertheless agrees with the lower court’s conclusions:
- Advocate General Kokott found that the General Court had not erred in law in confirming the Commission’s finding that Google’s practice of favouring its own comparison shopping service over competing services on its general search results pages constituted an abuse of a dominant position within the meaning of Article 102 TFEU. Kokott rejected Google’s argument that such a practice could only be abusive if it met the strict criteria for a refusal to grant access to an essential facility, as established by the Court of Justice in the Bronner case (Case C-7/97). The Opinion states that those criteria were not applicable to a case of self-preferencing, which involves a difference in treatment of the dominant platform’s own services at the expense of the services of competitors, and does not involve a refusal to supply or grant access to the dominant platform. Kokott found that the practices in question constituted an independent form of leveraging abuse which expressed itself in the form of positive discrimination in favour of search results from Google’s comparison shopping service. The practices also deviated from the means of normal competition on the merits and could not be justified by any pro-competitive aspects of Google’s conduct.
- Kokott dismissed Google’s argument that the Commission had failed to demonstrate a causal link between the alleged practice and its potential exclusionary effects on the market. The Advocate General agreed with the General Court that the Commission had sufficiently proved that Google’s practice had led to a decrease in data traffic to competing comparison shopping services and an increase in traffic to its own service, and that this had a negative impact on the profitability and viability of those services.
- The Opinion also agrees with the General Court that the Commission could reject certain counterfactual analyses proposed by Google as arbitrary and partial, as they did not take into account the full effects of the alleged practices.
- Finally, the Advocate General rejected Google’s argument that the Commission should have applied the as-efficient-competitor test to assess the effects of the abuse. The Opinion pointed out that this test was not generally applicable, nor an essential prerequisite, for determining whether the conduct of a dominant undertaking was in keeping with the means of competition on the merits. Kokott also noted that this test had been designed for price-related practices, which was not the case here, and that it was not relevant whether Google’s comparison shopping service was more efficient than those of its competitors.
The Opinion is not binding on the Court, but it is highly influential. It addresses some of the key legal questions raised by the case, such as the criteria for identifying abusive self-preferencing by a dominant platform and the applicability of the as-efficient-competitor test to non-price-related practices. The Court of Justice’s ruling, which is expected later this year, is likely to have significant implications for the application of Article 102 TFEU to practices of self-preferencing going forward. Gatekeeper digital market platforms will be subject to increasing scrutiny in relation to such practices from 6 March 2024 as a result of the prohibition on self-preferencing under the Digital Markets Act. However, the Court of Justice’s ruling will likely have a significant impact on platforms that are not deemed to be gatekeepers under that legislation.