Google loses challenge to EU antitrust ruling, other investigations loom

LUXEMBOURG, Sept 14 (Reuters) – Google suffered one of its biggest setbacks on Wednesday when a top European court upheld a ruling that it breached competition rules and fined it a record 4.1 billion euros, in a move that could encourage other regulators to increasing pressure on the American giant.

The unit of U.S. tech giant Alphabet ( GOOGL.O ) had challenged an EU antitrust ruling, but the decision was largely upheld by the European Court of Justice, with the fine reduced to 4.125 billion euros ($4.13 billion) from 4.34 billion euros .

Even with the reduction, it was still a record fine for an antitrust violation. EU antitrust enforcers have fined the world’s most popular internet search engine a total of 8.25 billion euros in three investigations stretching back more than a decade.

The ruling is set to add to landmark rules aimed at curbing the power of US tech giants that take effect next year. read more

“The judgment strengthens the Commission’s hand. It confirms that the Commission can use antitrust procedures as a backstop threat to enforce rapid compliance with digital regulation also known as DMA,” said Nicolas Petit, professor at the European University Institute.

The EU’s antitrust chief, Margrethe Vestager, did not mince her words.

“This is of course very good. Now we have the second Google judgment and for us it is very important as it supports our enforcement efforts,” she said.

This is the second court defeat for Google, which lost its challenge to a 2.42 billion euro ($2.42 billion) fine last year, the first of a trio of cases.

“The court largely affirms the Commission’s decision that Google imposed illegal restrictions on Android mobile device manufacturers and mobile network operators in order to consolidate the dominant position of its search engine,” the court said.

“However, to better reflect the gravity and duration of the infringement, the Court considers it appropriate to impose a fine of €4.125 billion on Google, and its reasoning differs in certain respects from that of the Commission,” the judges said.

Google, which can appeal legal issues to the European Court of Justice, Europe’s highest, expressed its disappointment.

“We are disappointed that the court did not overturn the decision in its entirety. Android has created more choice for everyone, not less, supporting thousands of successful businesses in Europe and around the world,” a spokesperson said.

ANTITRUST BOOST

The ruling is a boost for Vestager after the Court overturned her rulings against Intel ( INTC.O ) and Qualcomm ( QCOM.O ) earlier this year.

Vestager has made cracking down on Big Tech a hallmark of her job, a move that has encouraged regulators in the US and elsewhere to follow suit.

She is currently investigating Google’s digital advertising business, the Jedi Blue ad deal with Meta ( META.O ), Apple’s ( AAPL.O ) App Store rules, Meta’s marketplace and data usage and Amazon’s ( AMZN.O ) online sales and marketing practices.

The court agreed with the commission’s assessment that iPhone maker Apple ( AAPL.O ) was not in the same market and therefore could not be a restriction of competition against Android.

The court’s support could bolster the EU’s antitrust watchdog in its investigations into Apple’s business practices in the music streaming market, which the regulator says Apple dominates.

FairSearch, whose 2013 complaint sparked the EU case, said the ruling could lead to more competition in the smartphone market.

“This shows that the European Commission is right. Google can no longer impose its will on phone manufacturers. Now they can open their devices to competition in search and other services, so that consumers can benefit from increased choice,” said lawyer Thomas Vinje.

The commission said in its 2018 decision that Google used Android to cement its dominance in general internet search via payments to major manufacturers and mobile network operators and restrictions.

Google said it behaved like countless other businesses and that such payments and agreements help keep Android a free operating system, and criticized the EU decision as out of step with the economic reality of mobile software platforms.

The case is T-604/18 Google vs the European Commission.

($1 = 1.0002 euros)

Reporting by Foo Yun Chee Editing by David Evans and Bernadette Baum

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