EU fines Google a massive €2.42bn
For anti-competitive practice
IF YOU ARE suing Google, EU enforcers have just saved you a lot of legwork.
For dozens of companies that have brought lawsuits claiming Google effectively crushed them by abusing its dominance in internet searches, yesterday’s announcement will likely ease their attempts to show their much larger rival improperly boosted its business at their expense.
The decision could resurrect lawsuits stayed by national regulators awaiting the commission’s ruling.
The €2.42 billion (R34.89bn) fine topped the current $1.2bn (R15.46bn) record and caps a seven-year probe into Google fuelled by complaints from News Corporation and Microsoft. In the UK, Kelkoo and Foundem are among companies that stand to gain from a formal ruling from the EU.
“Having the decision from the European Commission means they don’t have to prove infringement themselves,” said Rona Bar-Isaac, a partner at Addleshaw Goddard. “The question for these companies then will be, can you tie that infringement back to whatever harm it is that Kelkoo and Foundem say they’ve suffered?”
Price comparison websites Foundem and Kelkoo were the first of their kind to sue in Britain. Foundem went to court after Google allegedly dropped the company from its listings in 2006.
Kelkoo also went after the US technology firm, saying in its lawsuit that Google gave its own search results unfair prominence over Kelkoo and other rivals. Foundem won a ruling in 2015 that enabled it to submit documents to aid the EU in its investigation of Google.
“There’s a huge amount of evidence and they’re going to face lots and lots of claims across Europe,” Kelkoo chief executive Richard Stables said. Everybody knows that Google “is dominant, but the European Commission has collected everybody’s data and laid that all out.”
Google is “liable to face civil actions for damages that can be brought before the courts of the member states by any person or business affected by its anti-competitive behaviour,” the EU said. “The new EU antitrust damages directive makes it easier for victims of anti-competitive practices to obtain damages.”
The EU moved to accelerate the release of its decision in recent days, pushing up the announcement from July. The rapid pace comes after a seven-year probe fuelled by complaints from small shopping websites as well as bigger names, including German publisher Axel Springer. European politicians have called on the EU to sanction Google or even break it up while US critics claim regulators are targeting successful US firms.
The long probe has not hurt Google, which did its initial public offering in 2004, selling shares for $85. They ended last week at $986.09. They dropped 1.5 percent in pre-market trading in New York yesterday.
“The really key thing to look out for will be how far the commission goes in actually setting out what the effects were of the abuse of dominance,” Bruce Kilpatrick, a partner at Addleshaw Goddard, said ahead of the announcement. “That will obviously help or hinder other litigants. In an abuse of dominance case, it isn’t always obvious that the claimant can tag the infringement to the losses,” so the language used by the commission will be important.
Since it started changing its search function in order to promote its own comparison shopping service, traffic to Google’s comparison shopping service increased 45-fold in the UK, the EU said. – Bloomberg
A cyclist rides past Google offices inside the Googleplex headquarters in Mountain View, California. Yesterday’s EU record fine caps a seven-year probe into the company.