Google and parent company Alphabet lost an appeal Wednesday against a landmark €4.3 billion antitrust fine in what lawyers described as a triumph for the aggressive antitrust enforcement approach pursued by competition czar Margrethe Vestager.
The decision from the General Court centered on a 2018 fine imposed by Brussels officials on the Mountain View, California-headquartered company for allegedly placing anti-competitive restrictions on manufacturers of mobile devices and mobile network operators to protect and bolster the dominant position of its search engine, Google Search, and the revenue from search advertisements. The fine was the largest ever given by a competition authority in Europe.
This is the second appeal the U.S. tech giant has lost against a billion-euro EU antitrust fine. Last year, the Luxembourg court of first instance for EU law sided with the European Commission in a challenge to a 2017 antitrust fine of €2.42 billion centering on Google’s comparison shopping service. A third appeal against a €1.49 billion antitrust fine over Google’s anti-competitive behavior in the online advertising space is outstanding, with a decision not expected before 2023.
In its judgment, the General Court of the Court of Justice of the European Union largely sided with the commission but lowered the fine to €4.13 billion, representing a 5% decrease.
Google was represented by a heavyweight quartet of elite law firms: Cleary Gottlieb Steen & Hamilton, Garrigues, and White & Case, as well as London-based Monckton Chambers’ David Gregory and Meredith Pickford KC. The European Commission was represented by its own legal service.
In a statement sent to Law.com International, a Google spokesperson said, “We are disappointed that the Court did not annul the decision in full. Android has created more choice for everyone, not less, and supports thousands of successful businesses in Europe and around the world.”
Dieter Paemen, a partner at Clifford Chance’s Brussels office who filed one of the complaints that led the commission to open the investigation that resulted in the 2018 fine, was pleased with the decision.
“I expect there will be some serious reflection in Mountain View,” he said. “Vestager’s stance regarding enforcement in the tech sector is already pretty bold—this win gives her cover to continue on that path. Hopefully, she will now focus on enforcing the remedies in the decision in a serious way.”
Google has two months and 10 days to appeal the decision to the Court of Justice, and Paemen said it was likely to do so. “The decision as upheld by the General Court is pretty solid though, and it’s hard to see Google getting a better outcome at the Court of Justice.”
Max Seuster, counsel at Reed Smith’s Brussels office, told Law.com International that the decision proves that anti-competitive practices in the online world can still be addressed through traditional antitrust enforcement.
“[The decision] brings comfort that antitrust enforcement can be an effective tool to address certain practices in the digital sector,” said Seuster, who was not involved in the Google case. “Getting these things right requires more diligence in the European Commission’s substantive, economic analysis and in the way the European Commission conducts its investigation and it ensures defense rights are sufficiently protected.”
He noted that the court also took issue with the commission’s flawed economic analysis in a recent decision over a €1 billion antitrust fine imposed on U.S. chipmaker Intel. Describing the commission’s analysis as “incomplete,” the court sided with Intel and scrapped the commission’s fine in its January 2022 decision. The commission has filed an appeal against the General Court’s ruling.