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Margrethe Vestager desperately needed a victory to claim her fight against antitrust abuse in the EU, and she got it.
The EU General Court on Wednesday sided with the European Commission in a record-breaking fine against Google for its abuses in the mobile market. The decision is a relief for Executive Vice President Vestager and a much-needed breakthrough for the bloc’s law enforcement, which had suffered two devastating losses in Luxembourg earlier this year in the cases against Intel and Qualcomm.
The court “broadly confirms the Commission’s decision that Google has imposed illegal restrictions” on both Android device manufacturers and mobile network operations in pursuit of search engine dominance, the court wrote in its ruling.
The fine, despite being reduced to € 4.125 billion from the Commission’s original € 4.34 billion fine, marks the most expensive penalty a company has ever faced for anti-competitive behavior in the EU.
Speaking in Strasbourg on Wednesday, Vestager called the ruling a “big enough” result for the Commission and said it “talks a lot about the work done” by its antitrust agents in Brussels.
Off to the sentence
Deep in his second term in Brussels, Vestager is gaining ground in his antitrust crusade against Google – which has now amassed more than € 8 billion in penalties – to the applause of those involved in the cases.
“The ruling marks the most important legal defeat in the history of Google’s company,” said Thomas Höppner, counsel for several of the parties involved in the case and partner of the law firm Hausfeld. “It goes to the heart of the Google ecosystem, breaking down some of the walls that Google has built around its cash cow search service to protect it from competition.”
“The European Commission got it right,” added Thomas Vinje, a lawyer who has worked on the case since his client FairSearch filed the original complaint in 2013. “Google can no longer impose its will on phone manufacturers.” he said in an email Comments.
The European Commission filed a € 4.34 billion fine in 2018 for three types of contracts that Google had signed with mobile operators and phone makers in an effort to dominate the mobile search market.
The deals, the people involved in the case said, served to push rivals out of business and cemented Google’s dominance in search services.
“Many European consumers had no alternative to using Google’s search engine and Google’s Chrome browser on their mobile devices,” said Monique Goyens, director general of the European consumer organization BEUC, a party to the lawsuit against Google.
The EU General Court upheld the Commission’s findings in two of those contracts, which obliged smartphone manufacturers to use Google’s search and browser systems and avoid installing alternatives to the Android operating system. As regards the third contract – exclusive payments between Google and the mobile phone company – the Luxembourg courts argued that the Commission was wrong to argue that it was in itself an abuse of a dominant position.
The EU General Court ruling reduced the Commission’s original fine by about 4%, in line with the court’s findings in the Intel and Qualcomm cases.
In response to the ruling, the Commission said it “would study the ruling carefully and decide on the next steps”. On the other hand, a Google spokesperson said the company was “disappointed that the court did not overturn the decision in full”. Google can still appeal the ruling before the European Court of Justice.
Betting on the law on digital markets
Brussels was so confident in its lawsuit against Google that it included the rules derived from the Android case, including restrictions on pre-installing software and the obligation to offer consumers more choices, in the Digital Markets Act (DMA), which will become part of the ‘EU regulation in October.
“This is a fundamental victory for the Commission itself, and even more so in view of the launch of the Digital Markets Act,” said Alec Burnside, partner and head of antitrust practice at Dechert LLP in Brussels, who also represents the parties. against Google in other cases.
Burnside added that the judgment could prove influential in the designation of services that fall under the scope of the DMA, a process that is expected to take place in mid-2023.
MEPs on Wednesday also touted at source the ability of upcoming DMA rules to stop Big Tech abuses, such as those identified in the Android case.
“Competition procedures, including all appeal procedures, take too long. For Google alone, there are more pending cases, “said MEP Markus Ferber, coordinator of the European People’s Party Group in Parliament’s Economic Committee.” With the Digital Markets Act, authorities will soon have tools that work at their fingertips. faster but are equally effective “.
However, the Commission is preparing for a new horizon in the bloc battles with Big Tech. Lawyers are already informing some of the largest digital companies in the world where they might find holes in the DMA rules.
“There will be litigation, no doubt,” said Gerard de Graaf of the European Commission recently. De Graaf is a longtime bureaucrat involved in DMA who was recently sent to San Francisco in a new role involving compliance interviews with Big Tech companies. “We are prepared for litigation, but we would like a constructive discussion with the platforms rather than a contradictory discussion.”
The next EU scuffles may loom closer and closer but, for now, Vestager is triumphant and Google is considering how best to respond to its court defeat on Wednesday. In the event of an appeal, he has until 24 October to do so.
The case number for the Google Android ruling is T-604/18.
Clothilde Goujard contributed to the reporting.
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