Google Appeal Claims EU Misstated Facts When It Imposed Massive Fine

The European Commission’s decision earlier this year to fine Google $2.8 billion for anti-competitive practices misstates facts about the company’s shopping services and ignores market realties, Google has claimed in its appeal against the decision.

Google filed the appeal on Sept. 11 after the commission imposed the fine this June.  The EC held that Google was favoring its own online shopping service and drawing traffic away from other sites by highlighting paid product ads on top of the results page when people conduct product searches.

The Commission has ordered Google to implement mechanisms to ensure rival comparison-shopping sites get as much visibility in search results as Google gives to paid product ads.

Google wants the verdict overturned or at least have the amount of the fine reduced. The European Union’s General Court released details of Google’s appeal Oct. 30 in the EU’s Official Journal.

The document shows that Google has based its appeal on six arguments. Two of them claimed that the court erred in finding that Google was favoring its own shopping services via its practice of grouping paid ads on top of product search results pages.

According to Google, the reason it highlights paid ads is to improve the quality of its product search results and not because it wants to drive traffic to a Google comparison-shopping service. The company has claimed that treating paid product ads differently from organic search results does not amount to discrimination against rival comparison-shopping sites.

The search giant’s appeal also argues that the European court has failed to demonstrate how Google’s handling of product search results diverts traffic away from rival sites or increases traffic to its own online products and services.

The company attacked the court for speculating about potential anti-competitive effects without actually evaluating market conditions. “The contested decision fails to take proper account of the competitive constraint exercised by merchant platforms,” Google claimed without referring to any specific rival by name.

“Even if the competitive analysis could be limited to aggregators, the contested decision fails to show anticompetitive effects.”

Google’s appeal described the EU decision as penalizing the company for making improvements to its search product. The argument is based on Google’s claim that its practice of highlighting paid ads is actually a product improvement that the company made so users can get more relevant information. Google claimed the EU court is therefore not legally justified in demanding that Google give rival sites access to its product improvements.

Google said it wants the antitrust fine overturned because the European Commission had advanced a “novel theory” about how the company’s handling of search results was hurting rival comparison-shopping websites. The company also asserted that the European Commission had previously considered ways to resolve the issue without a fine, but then went ahead and imposed one anyway.

The Commission has not indicated when it will consider Google’s appeal or how long it will take to come to a decision on it. In the past, such appeals have taken years to resolve. Google in the meantime has proposed an alternative mechanism for handling product results under which rival sites can bid for ad placement on top of product results pages.

Originally published on eWeek.

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