google search bar "i'm feeling lucky"
Feature

Google to Appeal EU Fine Buoyed by Intel Antitrust Decision

4 minute read
David Roe avatar

Google has announced it will appeal the $2.7 billion fine levied by the European Union in June for allegedly promoting its own price comparison services over its competitors.

Google filed the appeal with the General Court of the European Union, the EU's second highest court.

The fine handed down by the European Commission, the executive branch of the EU, is the biggest antitrust fine ever imposed by the EU.

The decision to appeal the ruling is no surprise. Google said it was considering this course of action at the time.

Google Takes Inspiration From Intel Ruling?

What changed is that last week, the European Court of Justice (ECJ) sent a $1.3 billion fine against Intel in another antitrust case from 2009 back to a lower court — the General Court — for review after Intel appealed that fine.

The decision by the ECJ, Europe’s highest court, to return the Intel case to a lower court for review should give Google some hope of either reducing its fine, or having it quashed entirely.

In the Google case, the European Commission accused Google of giving its own online service, Google Shopping, higher priority in search results to the detriment of other price comparison services, such as TripAdvisor and Expedia.

For a company that made $90.3 billion in revenues in 2016, the fine may be stiff, but bearable.

More problematic was the part of the ruling that ordered the company 90 days — until Sept. 28 — to outline how it would change its practices. A spokeswoman for the general court in Luxembourg said Google had not asked for an interim order to suspend the EU decision, leaving it potentially open to fines for every day it fails to change the way it displays results.

What's the Outlook for Google?

As of now, Google must still comply with the June ruling, including paying the fine and coming up with a plan for how it would change its search practices.

Zhewei Zhang, assistant professor of Information Systems at Warwick Business School, told CMSWire that despite the media focus on the EU’s ruling on the prominent placement of Google’s comparison shopping service in search results, there is a second, more important issue.

Learning Opportunities

"Focusing on the comparison offerings is probably what Google wants because it is arguable that it should count as 'abusing its dominance.' This is really a grey area as Google marks these as 'sponsored' ads."

“To some extent, it is like the cases of maps services or video services where Google’s own services — Google Maps and YouTube — are usually displayed on top. This is also how Google argues it is improving consumers’ search experience. It may take ages to battle with Google’s lawyers on this point,” he said.

"However, I think the EU's second ruling — 'Google has demoted rival comparison shopping services in its search results' — is actually much more important if it is true."

"The EU says the result is based on analysis of 1.7 billion real-world search queries. This means Google manipulated the search results to lower its competitors’ rank, which can be the hard evidence to support the EU’s fine on Google abusing its dominance. Unless Google can prove this is wrong, I don’t think Google can easily get out of the fine."

FairSearch.org is a group of businesses and organizations united to promote economic growth, innovation and choice across the internet ecosystem by fostering and defending competition in online and mobile search.

In a post last week, it outlined ways Google could change its practices to comply with the EU. The legal counsel for FairSearch, Thomas Vinje, told CMSWire in a statement he believed the EU would win the appeal:

"The Commission's decision stands on firm ground, both legally and factually, and we expect the Commission to win on appeal,” he said.