Google loses the battle with the EU as the court upholds the 2017 order

The EU flag is seen with the Google logo.

Jaap Arriens | NurPhoto | Getty pictures

The European Court of Justice ruled on Wednesday that the European Commission was right to fine Google for an antirust violation – in what represents a landmark for EU policy that could affect the business models of major technological players.

The ruling comes after the European Commission, the executive branch of the EU, said in 201[ads1]7 that Google had favored its own comparison services and fined the company 2.42 billion euros ($ 2.8 billion) for violating antitrust rules. The alphabet unit Google disputed the allegations by using the EU’s second highest court.

“The court finds that by favoring its own price comparison service on its overall results pages through more favorable display and positioning, while Google has banished the results from competing comparison services on those pages using ranking algorithms, Google has deviated from the competition for the benefits. “, the court said in a press release on Wednesday.

In addition, the court also confirmed the fine of 2.42 billion euros. “The general court concludes its analysis by finding that the amount of the fine imposed on Google must be confirmed,” the court added.

Wednesday’s ruling can be appealed and brought to the EU’s highest court. The European Commission and Google were not immediately available for comment when contacted by CNBC on Wednesday.

The legal precedent

This is not the first time that the EU court has ruled on an anti-rust case brought by the European Commission and directed at a technology giant.

The chamber ruled in July 2020 that the commission had failed to prove that the Irish government had given Apple a tax advantage – this was after the Brussels-based institution ordered Ireland to collect 13 billion euros from the iPhone maker in 2016.

The court ruling marked a significant blow for Margrethe Vestager, the EU’s competition director, and her team. It actually said that they did not do a good job of proving their case.

Vestager decided to appeal the decision and sent it to the EU’s highest court, the European Court of Justice, where the case has not yet been decided.

At that time, the Court’s ruling also shed light on one of the main challenges for European competition policy: In antitrust cases, it is the Commission that must bear the bulk of the evidence and not the defendant.

Impact on Big Tech?

The EU is currently discussing how the regulations can be tightened to ensure fairer competition across the 27 member nations.

Thomas Vinje, an antitrust partner at the law firm Clifford Chance, told CNBC on Tuesday that the court’s ruling “will put a damper on the DMA’s sails. [Digital Markets Act]. “

DMA is one of the major legal texts that the EU is working on, and which, once approved, will look to tackle any behavior that closes European markets. This can lead to changes in parts of the business models of the technology giants.

One of the potential changes is to end the self-preference – when, for example, app search results on an Apple product show alternatives developed by the technology giant. The idea is to give smaller app developers the same chance to be found and chosen by consumers. Lawmakers are also looking at limiting targeted advertising to give users more privacy. This can also affect how Big Tech operates.

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