By Bojan Pancevski
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (April 13, 2019).
A German price-comparison portal has become the first major
company to sue Alphabet Inc.'s Google 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 hesitated to take on the
Silicon Valley company.
In the suit filed in a Berlin court Friday, Idealo internet
GmbH, a leading price-comparison service that is majority-owned by
publisher Axel Springer SE, alleged that Google made it harder for
users of its search engine to find links to Idealo after the U.S.
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 prioritizing Google's offerings over
those of rivals in search results. At the time, EU Competition
Commissioner Margrethe 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.
A spokesperson for Google declined to comment because the
company hadn't seen the court filings Friday.
Kent Walker, Google's senior vice president of global affairs,
said in a March blog post 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."
Thomas Höppner, a lawyer representing Idealo, said 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 stated 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 the lawsuit was
a necessary step to counter what he called Google's monopolistic
behavior.
"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.
BEUC, a European federation of consumer protection groups, wrote
to the commission last Friday alleging that Google wasn't in full
compliance, a claim to which the company hasn't publicly
responded.
Mr. Walker said in a blog post following the Commission's
decision in 2017 that "when you use Google to search for products,
we try to give you what you're looking for. Our ability to do that
well isn't favoring ourselves, or any particular site or seller --
it's the result of hard work and constant innovation, based on user
feedback."
Kelkoo Group, a British-based price-comparison company, took
legal action in the U.K. against Google before the Commission's
decision and said it would now use evidence cited by the Commission
in its own litigation against tech giant.
Richard Stables, Kelkoo's chief executive, 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 in March to pay EUR1.49 billion
for allegedly cutting out rivals from online advertising.
"These huge fines are just a tax for Google to take over the
internet, but there is no change in behavior," Mr. Stables
said.
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, Idealo said, it remains far
below its peak of late 2013.
"The Commission takes note of the ongoing national proceedings
concerning potential damages related to Google's anticompetitive
behavior in the comparison shopping service market," said Ricardo
Cardoso, a spokesman for the European Commission, in reference to
the Idealo suit.
A Commission decision constitutes proof that the behavior took
place and was illegal, giving any individual or company affected by
Google's antitrust breach an opportunity to take to the courts, Mr.
Cardoso added.
Write to Bojan Pancevski at bojan.pancevski@wsj.com
Corrections & Amplifications Margrethe Vestager is the
European Union's competition commissioner. An earlier version of
this article incorrectly spelled her name.
(END) Dow Jones Newswires
April 13, 2019 02:47 ET (06:47 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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