Google loses appeal against EU competition fine

Margrethe Vestager, the European Union Commissioner for Competition

Any celebrations at Google after the company achieved a victory in the UK Supreme Court were tempered yesterday by a legal setback in Europe over a a multibillion-euro competition fine.

While the Supreme Court blocked a planned £3.2 billion lawsuit against Google over allegations that the group had unlawfully tracked the personal information of millions of iPhone users, a branch of the European Court of Justice rejected the company’s appeal in a separate case.

Three years ago the European Commission fined Google €4.34 billion after deciding that the company had favoured its price-comparison shopping service to give it an unfair advantage against smaller European rivals.

The court in Luxembourg dismissed Google’s appeal and ruled that the commission had been correct in finding that the company’s “practices harmed competition”. It also rejected Google’s argument that the presence of merchant platforms showed there was strong competition. As part of its ruling, the court upheld the fine, with the judges noting the seriousness of the breach and the fact that “the conduct in question was adopted intentionally, not negligently”.

Google said that it would review the judgment and noted that it had complied with the commission’s order to ensure a level playing field for rivals. The company did not comment on whether it would appeal against the ruling to the full Court of Justice.

The commission welcomed the ruling, saying that it would provide legal clarity for the market. In a statement, it said that it would “continue to use all tools at its disposal to address the role of big digital platforms on which businesses and users depend to, respectively, access end users and access digital services”.

The judgment could revive dormant investigations in Brussels that have been triggered by complaints from Google’s rivals, such as Yelp, another American search engine, and websites that specialise in the travel, restaurant and accommodation fields. Margrethe Vestager, the European competition commissioner, has opened similar investigations into the activities of Amazon, Apple and Facebook.

Thomas Vinje, a partner at Clifford Chance, a City law firm, who advises several of Google’s rivals, said that Vestager should expand her investigation into other areas. He said that yesterday’s judgment had given the European Commission “the ammunition it needs to tighten the screws on Google in other areas where it is throwing its weight around, like in online advertising, app stores and video streaming”.

Google has incurred about €8.25 billion in European competition fines over the past decade.