EU fines Google a mas­sive €2.42bn

For anti-com­pet­i­tive prac­tice

The Star Early Edition - - INTERNATIONAL - Patrick Gower

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.

Ev­i­dence

“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

PHOTO: 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.

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