Google Protests $2.7 Billion EU Fine In European Court
Attorneys for the internet giant argued the penalty to deter search practices that benefit its own comparison shopping service was excessive. It’s one of three cases Google is fighting against European regulators.
After three days of arguments in a Luxembourg courtroom, Google on Friday asked European Union judges to toss out a multi-billion fine imposed in 2017 for anti-competitive search engine practices designed to benefit Google Shopping Service.
Google argued before a five-judge panel sitting on The General Court, the second-highest court in Europe, that the European Commission’s (EC) $2.7 billion fine was excessive, unwarranted and “not justified by the actual facts of this case,” as Google attorney Christopher Thomas said.
Google’s legal team challenged the EC’s criteria for calculating the amount of the fine—involving multipliers to serve as additional deterrents. But one of the judges on Friday actually raised the prospect of increasing the penalty, telling Google’s legal team the court had that power if it found the initial fine was not enough to prevent future anticompetitive behavior.
[Related: 5 Things To Know About Google's $2.7B Dispute With The European Commission]
The dominant player in the search engine market was hit with the then-record penalty after the EC concluded Google was giving its own shopping service an illegal advantage.
The EC, which serves as the European Union’s antitrust regulator, said Google’s practices amounted to an "abuse of Google's dominant position in general internet search by stifling competition in comparison shopping markets."
Google’s generic search algorithms "demoted rival comparison shopping services in its search results,” the regulator found, while systematically giving its own products prominent placement.
At the time, the $2.7 billion fine was the largest ever imposed by the EC. Since then, Google has eclipsed that benchmark—the next year the EC hit Google with a $5 billion fine for practices around its Android smartphone OS licensing practices. Adding to Google’s conflicts with the European regulator, in March of 2019 another $1.69 billion fine was imposed based on a finding that Google stifled competition by contractually restricting publishers using its AdSense service from hosting its competitors' ads.
"Google's strategy for its comparison shopping service wasn't just about attracting customers by making its product better than those of its rivals," EC Commissioner Margrethe Vestager said in a prepared statement in 2017. "Instead, Google abused its market dominance as a search engine by promoting its own comparison shopping service in its search results, and demoting those of competitors."
"Evidence shows that even the most highly ranked rival service appears on average only on page four of Google's search results, and others appear even further down," said the commission.
Google has consistently argued the EC decision “underestimates" the value of Google's ability to allow consumers to make "fast and easy" connections to products.
The EC has claimed that since Google implemented the abusive shopping-service practice, its own service increased traffic 45-fold in the United Kingdom, 35-fold in Germany, 19-fold in France, 29-fold in the Netherlands, 17-fold in Spain and 14-fold in Italy.
The "demotions" applied to rival comparison shopping sites, meanwhile, resulted in what the EC called "sudden drops of traffic" to rival websites of 85 percent in the United Kingdom, up to 92 percent in Germany and 80 percent in France.