Google Ads to pay €1.27M antitrust damages for squeezing directory enquiry services provider, French court rules
Following a stand-alone claim filed by a directory enquiry services provider, the Paris Commercial Court ruled, on 10 February 2021, that Google holds a dominant position in the online search advertising market through Google Ads and abuses that position by setting up rules which are “neither objective nor transparent, and discriminatory”. Google has these rules in place despite several earlier recommendations and sanctions from the Autorité de la concurrence. By awarding the claimant almost € 1.27 million in damages six months after the claim was filed and ordering Google to stop its unlawful conduct, this decision proves that the French civil courts are, alongside public enforcement by the Autorité de la concurrence, an effective way to tackle anticompetitive practices and seek timely redress.
Directory enquiry services in the internet era
After unsuccessful discussions with Google with a view to resolving the matter, Oxone filed a claim before the Paris Commercial Court on 10 August 2020, alleging that Google had abused (i) the economic dependency which directory enquiry services has on Google Ads, and (ii) its dominant position on the online search advertising market.
The decision: Google Ads’ undeniably dominant position and multiple abuses
- Absence of economic dependency
First, Oxone claimed that Google abused “a situation of economic dependency”. This French provision, which is absent from EU competition law, prohibits abuses of an imbalance between business partners, regardless of the dominant position of the abuser. Two conditions have to be fulfilled for a finding of such an infringement:
- A state of economic dependency, which involves a factual assessment based on criteria such as the market share, market power or brand reputation of the abuser; and
- An abuse of that dependence, which usually consists in a refusal to sell, a tie-in of sales or discriminatory terms of sale.
Despite the Autorité de la concurrence having recently rejuvenated this cause of action with its €1.1 billion fine against Apple, the Paris commercial court struck out Oxone’s argument. The court acknowledged that there is an economic dependency link between Oxone vis-à-vis Google Ads, given Google’s reputation, quality, top end positioning and limited interoperability with other brands on the online search advertising market. However, the Court ultimately did not find a state of dependency as between Oxone and Google as Oxone have made a deliberate choice to trade mainly with Google Ads and, therefore, absent a state of dependency, the Court found no abuse of the same.
It remains to be seen whether this finding is the result of the claimant’s own deficiencies or depicts a clear intention to depart from the position set out by the French competition authority. It may also be that, having established an abuse of a dominant position, the Court was disinclined to further consider this less conventional issue.
- Abuse of dominance
The second argument put forward by Oxone was based on Article 102 TFEU and L. 420-2 paragraph 1 of the French commercial code.
Although the action brought by Oxone was on a stand-alone basis, it is important to note that several decisions from the Autorité de la concurrence have characterised Google’s dominant position on the online search advertising market. The Paris Commercial Court relied extensively on those decisions to conclude that Google is “undeniably” dominant in this market.
The Court analysed Google’s behaviour towards Oxone to assess whether it abused its dominant position and made two main findings in that respect.
First, in circumstances where the French competition authority has flagged several times since 2010 that Google Ads’ policy was neither objective nor transparent, and was discriminatory, the Paris court found that the repeated suspensions of Oxone’s ads and accounts were abusive practices, in violation of Article 102 TFEU and its French equivalent.
This decision serves as a reminder of the options available to victims of competition law infringements. Whilst one option remains for claimants to complain about the conduct at hand to a competition authority, filing a claim before civil courts may also prove to be an effective and swift solution, provided that enough evidence is available for claimants to prove the infringement(s). In this case, Oxone was able to heavily rely on several Autorité de la concurrence decisions regarding Google’s position and practices on the online search advertising market.
With a ruling published only 6 months after the claim was filed, this decision, though subject to an appeal, is more than welcome in a fast-evolving digital market.The question remains as to whether considering the sole gross margin of the claimant to assess damages is sufficient for the claimant to obtain full compensation.
The case also sheds some light on the complementary relationship between competition law and the EU Platform to Business Regulation 2019/1150 and reveal practices of digital gatekeepers that should be addressed in the proposed EU Digital Markets Act.
The decision is however subject to appeal and it will be interesting to see how the Paris Court of Appeal deals with this case.
 Paris commercial court, 10 February 2021, Case number 2020035242.
 Google Ads works in such a way that advertisers bid on certain keywords in order for their clickable ads to appear in Google's search results.
 Article L. 420-2, paragraph 2, of the French commercial code
 Autorité de la concurrence, 16 March 2020, n° 20-D-04
 See e.g. Autorité de la concurrence, 19 December 2019, n°19-D-26 and Autorité de la concurrence, 31 January 2019, n°19-MC-01
 Autorité de la concurrence, 31 January 2019, n°19-MC-01
 Especially as Oxone entered into receivership in June 2020.