GOOG Alphabet Inc

By Bojan Pancevski 

A German price-comparison portal has become the first major company to sue Alphabet Inc.'s Google LLC while invoking a 2017 European antitrust decision to fine the U.S. technology giant for abusing its dominant position in the search-engine market.

If it succeeds, the litigation could spark similar actions in Europe by other tech firms that have so far hesitated to take on the Silicon Valley company.

In the suit filed in a Berlin court on Friday, Idealo Internet GmbH, a leading price-comparison service that is majority-owned by publisher Axel Springer SE, alleges that Google made it harder for users of its search engine to find links to Idealo after the American company started promoting its own price-comparison offering, now called Google Shopping. Alphabet's European entity, Google Ireland Ltd., is also targeted by the suit.

The two-year-old ruling invoked by Idealo led the European Union's competition authority to fine the tech giant EUR2.42 billion ($2.72 billion) for what the EU said was prioritizing Google's own offerings over those of rivals in search results. At the time, EU Competition Commissioner Margarethe Vestager encouraged companies to use the ruling as a basis to seek damages against Google.

Google appealed that decision and said at the time it "respectfully disagreed" with the ruling.

Idealo is seeking EUR500 million in damages from lost revenue after Google allegedly altered its search results. The German company also claims Google violated the 2017 decision by failing to alter how it promotes its own services in search results even after being fined.

Google didn't respond to a request for comment Friday morning.

Thomas Höppner, a lawyer representing Idealo, says the potential damages could increase substantially should the judge accept his demand to subpoena data from Google to determine the exact scale and period of the alleged antitrust violation.

"I'm absolutely convinced that our case will send an important signal to the very many companies that have suffered similar damages. We are talking about a lot of money," Mr. Höppner said. "Many companies are not clearly aware of the potential for claiming back damages they suffered from Google."

While Google has changed how it displays price-comparison results, Mr. Höppner said the judge could opt to wait for the outcome of the company's appeal before making a final ruling. But that even in that case, he said, the proceedings could bring about new evidence.

The European Commission--the EU's governing body, responsible for enforcing laws within the bloc--hasn't said whether Google is complying with its 2017 decision, but Ms. Vestager has said in several public appearances in recent months that competition in the sector was improving and that Google was compliant.

Philipp Peitsch, Idealo's chief executive, said their lawsuit was a necessary step to counter what he called monopolistic behavior of Google.

"We want to set an example with this lawsuit that one can defend oneself against the illegal behavior of Google. The damages suit is for us a necessary and important step in our engagement for a fair competition, diversity in the market and transparency of pricing for the consumers," Mr. Peitsch said in a press release.

Kelkoo Group, a British-based price-comparison company, took legal action in the U.K. against Google prior to the commission decision and says it will now use evidence cited by the commission in Kelkoo's own litigation against Google.

Richard Stables, Kelkoo's CEO, said Google's changes since the 2017 ruling weren't making a significant difference for companies like his.

Google has faced a number of EU antitrust investigations. Most recently, the commission ordered it last month to pay EUR1.49 billion for allegedly cutting out rivals from online advertising.

Kent Walker, Google's senior vice president of global affairs, said at the time that the company had "already made a wide range of changes to our products to address the commission's concerns. Over the next few months, we'll be making further updates to give more visibility to rivals in Europe."

Idealo claims its visibility to users, as measured by independent online monitoring service Sistrix, dropped by half in the two years after Google started promoting its own price comparison service on top of search results. While this visibility has recovered somewhat since, Idealo says, it remains far below its peak of late 2013.

Write to Bojan Pancevski at bojan.pancevski@wsj.com

(END) Dow Jones Newswires

April 12, 2019 05:09 ET (09:09 GMT)

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