Alphabet′s Google puts up fight against EU fine | Business| Economy and finance news from a German perspective | DW | 12.02.2020
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Alphabet's Google puts up fight against EU fine

Silicon Valley giant Google is appealing a multibillion-euro fine that was slapped on it by EU antitrust regulators. The tech giant describes the penalty as "ill-founded and unfair."

In a three-day hearing before the Luxembourg-based General Court starting Wednesday, US online juggernaut Google intends to pave the ground for seeing European Union antitrust regulators overturn one of three hefty EU fines that Brussels had imposed on the Alphabet unit.

The General Court is a constituent part of the EU's highest legal institution, the Court of Justice. It usually hears complaints by individuals or states against EU bodies.

What Google is up in arms about is a 2017 fine to the tune of €2.4 billion ($2.6 billion) that Brussels slapped on the company, saying it had been favoring its own price comparison shopping service and hence giving a bad deal to smaller European competitors active in the same field.

'Wrong on the fact'

But while paying the fine and partly tweaking its policies in line with EU demands in the process, Google has never admitted to doing any wrong. In a statement ahead of the General Court hearing, the firm described the EU regulators' decision to hand out a fine as "wrong on the law, the facts and the economics."

It argued that "shopping ads have always helped people find the products they are looking for quickly and easily and helped merchants to reach potential customers."

Does a policy of self-referencing constitute an act of anticompetitive behavior? That's exactly the question the court needs to look into, and it also needs to define whether regulators were right in viewing Amazon and eBay as Google's rivals.

Screenshot of TripAdvisor

TripAdvisor is among the European companies that are wary of Google's market dominance

'De-facto kingmaker'

But while big retailers are probably not overly concerned about Google, smaller competitors are, according to lawyer Thomas Hoppner who advises clients critical of its practices.

"Google's search service acts as a de-facto kingmaker," he said in a statement. "If you are not found, the rest cannot follow — no company should be allowed to abuse such a position to promote its own services at the detriment of competitors and consumers alike."

A court ruling on the case is not expected before next year, but whatever the judgment, it is bound to have an impact on a large variety of businesses that rely on a fair ranking of their services on Google Search.

Vestager has made a difference

Since former Danish Finance Minister Margrethe Vestager took over as European Commissioner for Competition in 2014, US tech giants have generally been facing more headwinds from Brussels.

Apart from the penalty now under scrutiny at the General Court, Google alone became the target of two more antitrust fines. In 2018, the company was ordered to pay a record €4.3 billion for what the European Commission saw as an abuse of its market dominance in mobile services. Last year, a €1.5 billion penalty was added for "abuse of Google's dominant position in online search advertising," all on Vestager's watch.

And this might not be the end of EU action against Google. Earlier this week, dozens of European travel firms including TripAdvisor and Expedia wrote a letter to the commissioner indicating that in their view the US giant was unfairly trying to profit from the vacation rental ad business. Vestager has been known for taking such claims seriously and dealing with them immediately.

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