Please note, your browser is out of date.
For a good browsing experience we recommend using the latest version of Chrome, Firefox, Safari, Opera or Internet Explorer.

Google fined once more by the European Commission (Search case)

SÉRVULO PUBLICATIONS 14 May 2019

Following the investigation started in 14th July 2016, the European Commission decided, in 20th March last, to impose a fine of 1.49 billion euros on Google (Google Search case), for considering that it abused its dominant position in the market for the brokering of online search adverts.

It is not the first, nor the second time, that Google is targeted by a fine of this kind by the Commission – one can recall the decisions of 2017 (Google Shopping case) and 2018 (Google Android case), that amounted to 2.42 billion euros and 4.34 billion euros, respectively.

Thus, from the three proceedings instated by the Commission against Google, results a combined amount of 8.25 billion euros in sanctions applied for antitrust infractions.

In the present case, the AdSense for Search platform is considered. It consists of a service that provides search adverts to owners of “publisher” websites, allowing them to monetize traffic in their pages.

The long-standing investigation, that reports to the elapsed time between 2006 and 2016, led the Commission to conclude that Google developed multiple strategies, prohibited by EU antitrust rules, that conduced to the suffocation of potential competition.

According to the Commission, since 2006 that Google, through the AdSense platform, holds a dominant position in the market of online search advertising intermediation in the European Economic Area («EEA»), given Google’s market quotas (greater than 85% for most of the investigation target period).

It should be emphasized that the establishment of a dominant position in the internal market is not illegal. However, when markets with high barriers to entry (substantial initial and continuous investments are necessary to develop and maintain general search technology, a search advertising platform, and a sufficiently large portfolio of publishers and advertisers), are concerned, certain conducts can be considered abusive. And the Commission considered that Google actively impeded its rivals from competing in the market at stake, in infringement of article 102 TFUE.

As far as the Commission is concerned, Google, through the Adsense program, (i) included exclusivity clauses in its contracts with the editors, since 2006, preventing them from placing competitors search adverts on their search result pages. Changing strategies, from March 2009 onward, Google (ii) introduced “Premium Placement” clauses in those contracts, impeding its competitors from placing search adverts in the most visible and clicked parts of the websites’ search result pages; and (iii), began including clauses that required publishers to seek Google’s written approval before altering the way they exhibited competitors’ search adverts.

Through these actions, Google allegedly prevented its competitors from placing search adverts in the most commercially relevant search result websites and, in a second instance, imposed the placement of Google search adverts in the most relevant positions, whilst controlling the performance of competitors’ search adverts.

The fine applied by the Commission to Google, amounting to the otherworldly amount of 1.494.459.000,00 euros, corresponds to 1,29% of Google’s turnover in 2018, and is claimed to have had into account the duration and severity of the infraction, as well as Google’s revenues stemmed from online search advertising intermediation in the EEA. For the Commission, Google did not demonstrate the creation of efficiencies, through the imposition of the abovementioned clauses, capable of justifying its practices, having its competitors been prevented from competing in the market at hand. Consequently, website owners’ options were restricted as far as advertisement monetization is concerned, and have allegedly been forced to resort nearly exclusively to the AdSense Google platform.

Furthermore, in addition to the imposed fine, and similarly to other cases, such as in the Microsoft decision, 24th March 2004, or the Google Android decision, of 18th July 2018, the Commission demands that Google, if still engaging in the referred conducts, cease them, considering them to be illegal, and refrain from developing practices with identical or equivalent object or effect.

It should be noted that, in parallel to the public enforcement, that translates into the imposition of astronomical fines or behavioral obligations, European and national legislation – v.g. Directive 2014/104/EU and Law 23/2018, of June 5th – promote and facilitate the possibility of parties affected by anticompetitive practices bringing legal proceedings of civil liability to be compensated for their losses (private enforcement).

As for the Commission’s decision, its challengeability lasts until the end of May, and one can expect it to be challenged in the General Court of the European Union soon (article 263 TFUE).

Afonso Carvalho

anc@servulo,com

Related Lawyers
Afonso Carvalho