Google Appeals Against EU Antitrust Fines -- Update
February 12 2020 - 12:08PM
Dow Jones News
By Valentina Pop and Sam Schechner
LUXEMBOURG -- Alphabet Inc.'s Google told a court Wednesday that
the European Union's antitrust enforcer had no legal grounds for
awarding it a multibillion fine for allegedly abusing its dominance
over smaller rivals.
The search giant is seeking to overturn three antitrust rulings
it lost against the EU that have totaled more than $9 billion in
fines. While a verdict isn't expected until early next year, the
litigation is a test case for the EU's competition czar, Margrethe
Vestager, and the continuing probes into Facebook Inc., Apple Inc.
and Amazon.com Inc. for allegedly abusing their dominance to drive
out smaller rivals.
"Competition law does not require Google to hold back innovation
or compromise its quality to accommodate rivals," Thomas Graf, a
lawyer for Google told a panel of five judges at the General Court
in Luxembourg. The court is the bloc's second-highest and its
rulings can still be appealed at the European Court of Justice.
In 2017, Ms. Vestager found that Google had abused the dominance
of its search engine to drive traffic to its own shopping ads at
the expense of rivals that operated their own shopping-comparison
sites that linked to merchants.
Mr. Graf argued that Ms. Vestager's decision was "wrong on the
facts and wrong on the law."
At stake in the case is the legal precedent of self-preferencing
and whether dominant tech companies have a special responsibility
to avoid favoring their own in-house products and services over
competitors.
The EU's decision to fine Google came from nearly a decade of
formal investigations. The probes were prompted by complaints from
companies that competed in some way with Google, including American
firms like Yelp Inc. and Microsoft Corp. -- which had itself spent
a decade under the EU's antitrust microscope.
More than a decade ago, many of the shopping comparison sites
depended on Google traffic until the company changed its algorithms
in ways that lowered the rankings of sites the company said weren't
useful for users. Google then started showing its own product ads
atop search pages for popular products.
Google argues that self-preferencing is a new principle in
competition law and that the commission had no legal basis to put
it forward and to levy a EUR2.42 billion ($2.71 billion) billion
fine based on it.
The commission's counsel disagreed. "The decision is not as
unusual as Google suggests," said Nicholas Khan, the European
Commission's lawyer. He said a company is under legal obligation
"not to use the levers of control conferred by its overwhelming
dominance...to give itself an anticompetitive advantage."
If the court rules that it is illegal for tech platforms to
promote their own products to the detriment of smaller rivals, it
could encourage the commission to pursue more antitrust probes such
as one currently under way against Amazon.
The reporting judge on the case, Lauri Madise, said EU
competition law has "no general prohibition for a business to favor
its own products" and pressed the commission to lay out exactly
what made Google's behavior anticompetitive.
The commission's lawyer said that while there is no duty of
neutrality on Google or other companies, in this specific case
consumers were harmed because they were deprived of better search
results from competitors and because Google was applying different
standards to what it would display when it came to its own results
and to rivals' results.
European consumer organizations, German publishers and
near-defunct rival shopping search engines argued in favor of the
commission's findings and warned of similar behavior displayed by
Google in other areas. "This behavior needs to be stopped because
otherwise competition will be destroyed in every other market
Google decides to enter," said a lawyer for the German publishers
association.
The Washington-based Computer & Communications Industry
Association, representing tech companies, sided with Google at the
hearing and said the commission's self-preferencing argument
creates legal uncertainty. "We ask the court to re-establish
clarity and coherence as to the law, to allow the tech sector to do
what it does best: innovate," said James Killick, a lawyer for the
industry group.
Write to Valentina Pop at valentina.pop@wsj.com and Sam
Schechner at sam.schechner@wsj.com
(END) Dow Jones Newswires
February 12, 2020 11:53 ET (16:53 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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