Competition partners size up implications of Google's landmark European Commission fine
Linklaters, Simmons, Bird & Bird and Norton Rose partners weigh in on search giant's record €2.42bn competition fine
June 30, 2017 at 03:56 AM
3 minute read
This week, the European Commission handed down its largest ever competition fine after ruling that Google had abused its dominance as a search engine.
The search giant was hit with an eye-watering €2.42bn (£2.1bn) penalty after the Commission ruled it had unfairly promoted its own comparison shopping service in its search results, while demoting those of its competitors.
The sheer size of the fine ensured the ruling made plenty of headlines, but its ramifications for other tech companies may be further reaching.
Linklaters global competition head Jonas Koponen comments: "First and foremost, this case clearly concerns Google, but because of the gatekeeper role that the company plays, it also impacts on a number of additional companies that do business with it."
Bird & Bird co-head of competition & EU law Peter Willis adds: "The facts are Google-centric but the principles are not. Any other company that is dominant in a particular market, which tries to squeeze out competitors, will risk similar enforcement action."
The long-running case dates back to 2010, during which time Google has been taking advice from its longstanding external counsel at Cleary Gottlieb Steen & Hamilton. Fairsearch, a group of organisations lobbying against Google's dominance, has been working with Clifford Chance, while US firm Covington & Burling has been advising holiday comparison websites Expedia, TripAdvisor and Trivago.
This case shows once again that the European Commission is probably the world's fiercest enforcer in abuse of dominant position/monopoly cases
"From a legal point of view, the Commission's finding that Google's preferential treatment of its own shopping services was abusive is more interesting than the finding that Google has a dominant position in search," comments Norton Rose Fulbright competition partner Jay Modrall. "While this particular combination is not likely to be replicated in other cases, this case may presage the Commission's approach to conduct in related but distinct online markets in other cases."
The results of the case open Google up to the potential damages claims, with the Commision ruling stating that Google is liable to face civil actions.
Willis comments: "We tend to see damage claims after most Commission decisions. There are shopping comparison websites whose businesses did not recover from these practices, and the Commission does mention damages. Damage claims are not always going to succeed, but clearly having a decision in this case will be a great help for any claimant."
Two other cases with the potential for more fines and further claims are also pending. The second, related investigation is considering whether Google used its dominant position to prevent third-party websites from displaying search advertisements from its competitors, while the third case is looking into whether Google's Android mobile operating system has breached EU antitrust rules by stifling rival mobile operating systems.
The Commission has already come to the preliminary conclusion that Google has abused a dominant position in these two cases.
Koponen adds: "The cases that are still ongoing are at least as important for Google's business model, which puts search and advertising at the centre of how they operate."
As Simmons & Simmons competition partner Tony Woodgate concludes: "This case shows once again that the European Commission is probably the world's fiercest enforcer in abuse of dominant position/monopoly cases, and will continue to impose hefty fines when an abuse is identified."
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