Google loses first appeal against EU’s R42-billion fine

Google lost its appeal of a 2.4 billion-euro (R41.98 billion) antitrust fine for allegedly thwarting smaller shopping search services, in the first of a trilogy of European Union court fights over cases that set the course for the EU’s campaign to rein in Silicon Valley.

The U.S. search giant breached competition rules and deserved the penalty doled out by the European Commission in 2017, the EU General Court in Luxembourg ruled on Wednesday.

Judges backed the EU’s finding that Google shouldn’t favour its own service, an issue that’s triggered complaints against other tech giants.

A company’s actions to make its own services more prominent “involves a certain form of abnormality,” the court said. “A general search engine is infrastructure,” it said, countering a view that Google is free to act as it wishes on its own website.

The commission’s penalty for Google, the biggest at the time, was the first in a trio of decisions that form the centerpiece of EU Competition Commissioner Margrethe Vestager’s bid to rein in the growing dominance of big tech companies.

She’s fined the Alphabet Inc. unit about $9.5 billion (R143.97 million) in total and is still probing the company’s suspected stranglehold over digital advertising.

Google will review the ruling closely, it said in an emailed statement. It insisted it has complied fully with the EU order since 2017.

“Our approach has worked successfully for more than three years, generating billions of clicks for more than 700 comparison shopping services,” it said.

While the regulator was largely vindicated in the ruling, judges found that the commission had failed to prove that Google had harmed the market for general search, striking out the EU’s finding of a breach. That leaves the decision solely targeting the shopping-search service.

Wednesday’s ruling bolsters the EU’s crusade against the powers of tech giants that’s encouraged other global antitrust regulators, including the U.S. Specifically, draft EU rules in the works may also curb firms favoring their own services.

The result could also sway Inc., Apple Inc. and Meta Platforms Inc.’s Facebook to rethink how hard they fight the EU in current investigations.

Markus Ferber, a German lawmaker in the European Parliament, said the judgment was “a good day for competition in digital markets” that sends “a clear signal that even big tech companies cannot do as they please in digital markets.”

The ruling may also help smaller firms to seek millions of dollars in damages in national courts in claims that Google hurt their nascent businesses.

Along with the fine, Google was ordered in 2017 to make changes to the way it displays shopping search results that might help rivals grab some of the valuable ad space on search pages.

Smaller search services have complained the EU never pushed Google to go far enough to help them to attract sufficient visitors.

EU officials argued that they can only create the conditions for firms to compete.

Foundem, a U.K. comparison shopping service that triggered the probe, said the ruling “does not undo the considerable consumer and anti-competitive harm caused by more than a decade” of Google’s behavior. It and Kelkoo, another shopping service, asked the EU to now do more to enforce an order of equal treatment for smaller rivals.

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Google loses first appeal against EU’s R42-billion fine