Google Begins Appeal Against EU Shopping Penalty

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Image credit: European Commission

Alphabet unit begin fightback against European antitrust regulators in three day hearing at EU General Court in Luxembourg

Google has begun its appeal against a stiff financial penalty imposed by the European Commission over its alleged abuse of power in promoting its own shopping comparison service.

The hearing will take place at the General Court in Luxembourg over the next three days.

Google is facing billions of euros of fines, as the Commission has levied more than 8 billion euros (£6.84bn) in fines on Google in recent years and has ordered it to change its business practices on multiple fronts.

Shopping appeal

The first significant fine against Google was levied in 2017, when the European Commission fined it 2.4bn euros (£2.01bn) after it ruled that Google had thwarted rivals of shopping comparison websites.

The next significant fine came in July 2018, when the European Commission fined Google a record 4.3 billion euros (£3.83bn) for commercial practices related to its Android mobile operating system, the world’s highest ever antitrust penalty.

This was followed in March 2019 when Google was once again been hit with a hefty financial penalty from European antitrust regulators. That latest fine concerned the firm’s AdSense advertising service and Google was ordered to pay 1.49bn euros (£1.3bn).

But this week’s appeal concerns the 2.4bn euro fine handed out in 2017 against Google for allegedly favouring its own price-comparison shopping service against those of smaller European rivals.

Google had always pledged to appeal these fines, and it took the opportunity to defend its business model.

“Competition law does not require Google to hold back innovation or compromise its quality to accommodate rivals,” Google’s lawyer Thomas Graf was quoted by Reuters as telling a panel of five judges,

“Otherwise, competition would be restricted and innovation would be stifled,” said Graf. “The decision’s case is, at its core, that Google should not have introduced these innovations, unless it gave competing CSSs (comparison shopping services) the same access.”

The search engine giant did not favour its own service but competed on its merits, he reportedly said.

Abusive behaviour?

But this argument was rejected by Commission lawyer Nicholas Khan, who reportedly said this was a clear case of a company using its dominance to give itself an advantage in other markets.

“What Google engaged in was leveraging conduct of the type found to be abusive many times under EU competition law. Conceptually, there is nothing esoteric about this case,” Khan told the judges.

He also reportedly criticised Google for cherry picking elements of the EU decision to challenge.

“It is as if Google has applied a ranking algorithm to the decision and decided that parts of it just aren’t relevant,” Khan said.

The judges are expected to issue a ruling in the second half of 2020.

“We’re appealing [against] the European Commission’s 2017 Google Shopping decision because it is wrong on the law, the facts, and the economics,” Google said in a statement to the BBC. “Shopping ads have always helped people find the products they are looking for quickly and easily, and helped merchants to reach potential customers.

“We look forward to making our case in court and demonstrating that we have improved quality and increased choice for consumers,” it said.

French fines

Google is also facing a number of other fines in Europe.

In December last year France’s competition authority fined Google 150 million euros (£128 million), after it alleged the Alphabet unit had engaged in anti-competitive behaviour and had unclear advertising on the Google Ads page.

It should be remembered that in September 2019, Google had already said it would pay French authorities nearly 1 billion euros (or $1.1bn) to settle a fiscal fraud probe that began four years ago.

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