AG Kokott recommends upholding the €2.4 billion fine imposed on Google in relation to Google Shopping
On 11 January 2024, Advocate General (AG) Kokott delivered her Opinion [1] on Google’s [2] appeal to the Court of Justice in relation to Google Shopping [3]. The Opinion is the latest judicial assessment of the legality of Google’s self-preferencing conduct which was found to be abusive by the European Commission in its 2017 fining Decision [4]. The AG recommended that the Court of Justice should dismiss Google’s appeal and uphold the findings of the General Court and European Commission. If the AG’s Opinion is followed by the Court of Justice, it will provide clarity on the application of Article 102 TFEU to tackle anti-competitive conduct in digital markets.
Background
On 27 June 2017, the European Commission adopted the Google Search (Shopping) Decision in which it found that Google had abused its dominant position as a search engine by giving more favourable positioning and display in its search results to its own comparison shopping service (Google Shopping) as compared to competing services. The European Commission fined Google €2.4 billion, a record fine at the time. Google appealed that decision to the General Court which largely dismissed Google’s appeal [5]. Google subsequently appealed the General Court’s judgment to the Court of Justice and the hearing took place on 19 September 2023.
The Opinion
At the outset, AG Kokott highlighted that the legal questions in this case are “of great legal and practical importance"[6] as they grapple with the conditions under which a difference in the treatment of competitors by a dominant undertaking can be classified as an unlawful abuse as well as with what the European Commission must show to establish such an infringement of competition law.
Self-preferencing
The AG noted that this is the first case where unequal treatment by a dominant undertaking through self-preferencing has been expressly classified in case-law as an abuse of dominance within the meaning of Article 102 TFEU [7]. The AG considered that whilst the “defining example” under Article 102(c) refers mainly to discrimination between different trading partners or competitors of the dominant undertaking, it is settled case law that the list of abusive practices set out in Article 102 TFEU is not exhaustive [8]. Therefore, forms of unequal treatment that are similar to, and as harmful as, the example in article 102(c) TFEU may also be classified as an abuse [9].
Part of Google’s appeal was premised on the argument that self-preferencing could only constitute an abuse of dominance if it fell within the strict criteria set out by the Court of Justice in Bronner [10], which concerned a refusal to grant access to an essential facility. The AG rejected Google’s argument and stated that the Bronner criteria should be applied within narrow limits and “only to comparable cases of refusal of access or supply” [11] and that in the present case “there is no refusal of access or supply within the meaning of the Bronner criteria”[12]. Accordingly, the AG found that the General Court’s conclusion that the European Commission was not required to apply the Bronner test was correct, as it was not the relevant test in the circumstances.
In the AG’s view, Google’s self-preferencing constitutes an independent form of abuse through the application of unreasonable conditions of access to competing comparison shopping services, provided that it has at least potentially anticompetitive effects [13].
As-efficient competitor test
As a further ground of appeal, Google argued that the European Commission had a duty to examine whether the alleged practices were capable of driving an existing or hypothetical as-efficient competitor from the market under the “as-efficient competitor test”. It argued the Commission had failed to apply such a test in the present case. The AG however agreed with the General Court’s finding that the European Commission was not under an obligation to apply the “as-efficient competitor test” to support a finding that restrictive effects on competition were present, and noted that the test “is not generally applicable, let alone an essential prerequisite”[14] for determining whether a dominant undertaking’s conduct is abusive. The Opinion clarifies that applying this test only makes sense in respect of a price-related practice, and that its application should not be extended to non-price practices such as those at issue in the present case [15]. In the AG’s view, the European Commission was therefore required to demonstrate only potential restrictive effects on competition and, as such, it is immaterial whether Google’s product search engine was more efficient than those of its competitors [16].
Comment
While the Opinion is not binding on the Court of Justice, it is significant given that, if followed, it will confirm the reasoning of the General Court in upholding the European Commission’s decision and Google’s liability for its self-preferencing conduct will become final.
Moreover, a ruling in line with the Opinion's reasoning would offer clarity to regulators navigating anti-competitive conduct in digital markets. It would provide a framework for formulating decisions under Article 102 TFEU, thereby addressing abusive conduct more effectively. It would also confirm that Article 102 TFEU has the flexibility to encompass a wide range of anticompetitive conduct, including in novel, fast-paced technology markets. Such a ruling would also have wider implications for the enforcement of abuse of dominance cases in the EU by likely emboldening regulators to adopt further decisions based on the Court’s findings. It would also provide reassurance to those affected by abuses of dominance in these markets that the law is developing to enable effective action by regulators.
Hausfeld (London and German teams) represented Foundem, VDZ, BDZV and Ladenzeile (formerly, Visual Meta) in their interventions in support of the European Commission before the General Court and the Court of Justice.
[1] C-48-22, Opinion of Advocate General Kokott dated 11 January 2024, ECLI:EU:C:2024:14. Available here.
[2] Google LLC and Alphabet Inc.
[3] Google’s appeal challenges the findings of the General Court on Google’s appeal of the Google Search (Shopping) Decision adopted by the European Commission on 27 June 2017.
[4] European Commission’s Google Shopping Decision C(2017) 4444 final (Case AT.39740 – Google Search (Shopping)). See information on our current claims relating to the Google Shopping Decision here: Hausfeld | Google Shopping decision.
[5] General Court’s Judgment T-612/17, EU:T:2021:763. See also our News, Perspectives and Competition Bulletin articles relating to the General Court’s decision: Hausfeld | General Court dismisses Google’s appeal of the Google Shopping Decision; Hausfeld | The Google Shopping decision and whether digital platforms can constitute essential facilities; and Hausfeld | EU Shopping judgment: what does equal access to Google general results pages mean?
[6] AG’s opinion, paragraph 2.
[7] AG’s opinion, paragraph 71.
[8] AG’s opinion, paragraph 76.
[9] AG’s opinion, paragraph 76.
[10] Case C-7/97 Oscar Bronner GmbH & Co. KG v Mediaprint Zeitungs- und Zeitschriftenverlag GmbH & Co. KG, Mediaprint Zeitungsvertriebsgesellschaft mbH & Co. KG and Mediaprint Anzeigengesellschaft mbH & Co. KG. ("Bronner"), EU:C:1998:569.
[11] AG’s opinion, paragraph 81.
[12] AG’s opinion, paragraph 91.
[13] AG’s opinion, paragraph 90.
[14] AG’s opinion, paragraph 196.
[15] AG’s opinion, paragraph 190-191.
[16] AG’s opinion, paragraph 190.