Vestager wins historic battle in Google record case – POLITICO

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Margrethe Vestager badly needed a victory to vindicate her fight against antitrust abuses in the EU – and she got one.

The EU General Court on Wednesday sided with the European Commission on a record fine against Google for its abuses in the mobile phone market. The move is a relief for Executive Vice President Vestager and a much-needed turnaround for the bloc’s competition chiefs, who suffered two devastating losses in Luxembourg earlier this year in cases against Intel and Qualcomm.

The Court “broadly upholds the Commission’s decision that Google imposed unlawful restrictions” on Android device makers and mobile network operators in its pursuit of search engine market dominance, the court wrote in its statement. decision.

The fine – although reduced to €4.125 billion from the original €4.34 billion fine imposed by the Commission – is the costliest penalty a company has ever faced for anti-competitive behavior in the EU.

Speaking in Strasbourg on Wednesday, Vestager called the judgment a “quite important” result for the Commission and said it “says a lot about the job done” by its antitrust officers in Brussels.

road to judgment

Deep into his second term in Brussels, Vestager is gaining traction in his antitrust crusade against Google – which has now racked up more than 8 billion euros in fines – to cheers from those involved in the cases.

“The judgment marks the most significant legal defeat in Google’s history,” said Thomas Höppner, an attorney for several parties who intervened in the case and a partner at law firm Hausfeld. “It goes to the heart of Google’s ecosystem, tearing down some of the walls Google has built around its cash cow search service to protect it from competition.”

“The European Commission has understood,” added Thomas Vinje, a lawyer who has been working on the case since his client FairSearch filed the original complaint in 2013. “Google can no longer impose its will on phone manufacturers,” added he said in an email. comments.

The European Commission imposed a €4.34 billion penalty in 2018 for three types of contracts Google signed with mobile operators and phone manufacturers in an effort to dominate the mobile search market.

The deals, those involved in the case said, served to squeeze rivals out of the market and cemented Google’s dominant position in search services.

“Many European consumers had no alternative to using the Google search engine and the Google Chrome browser on their mobile devices,” said Monique Goyens, director general of European consumer organization BEUC, party to the case against Google.

The General Court upheld the Commission’s findings in two of these contracts, which required smartphone manufacturers to use Google’s search and navigation systems and to avoid installing alternatives to the Android operating system . Regarding the third contract – exclusivity payments between Google and mobile phone companies – the Luxembourg judges said the Commission was wrong to claim that it in itself constituted an abuse of a dominant position.

The deals, those involved in the case said, served to squeeze rivals out of the market and cemented Google’s dominant position in search services | Tobias SchwarzAFP via Getty Images

The EU General Court’s decision reduced the Commission’s original fine by around 4%, in line with the court’s findings in the Intel and Qualcomm cases.

In response to the ruling, the Commission said it would “carefully review the judgment and decide on next steps.” On the opposite side, a Google spokesperson said the company was “disappointed that the court did not overturn the decision in its entirety.” Google can still appeal the decision to the European Court of Justice.

Banking on the Digital Markets Act

Brussels was so confident in its case against Google that it included rules derived from the Android case – including restrictions on the pre-installation of software and obligations to offer more choice to consumers – in the procurement law. (DMA), which is expected to enter the EU regulation in October.

“This is a key victory for the Commission in itself, and more so in the run-up to the launch of the Digital Markets Act,” said Alec Burnside, partner and head of antitrust practice at Dechert LLP in Brussels. , who has also represented parties against Google in other cases.

Burnside added that the judgment could prove influential when designating services within the scope of the DMA, a process that is expected to take place in mid-2023.

On Wednesday, members of the European Parliament also touted the ability of the upcoming DMA rules to stop Big Tech abuses — such as those identified in the Android case — at the source.

“The competition procedures, including all their appeal procedures, take far too long. Just for Google, there are several ongoing cases,” said MEP Markus Ferber, coordinator of the European People’s Party group in the Parliament’s Economics Committee. “With the Digital Markets Act, the authorities will soon have faster but equally effective instruments.”

The Commission is nonetheless preparing for a new horizon in the bloc’s battles with Big Tech. Already, lawyers are educating some of the world’s biggest digital companies on where they might find loopholes in the DMA rules.

“There will be disputes, no doubt,” the European Commission’s Gerard de Graaf said recently. De Graaf is a longtime bureaucrat involved with the DMA who was recently sent to San Francisco in a new role involving compliance talks with Big Tech companies. “We are ready for litigation, but we want a constructive discussion with the platforms rather than a contradictory discussion.”

The next EU scuffle may be drawing closer and closer, but for now Vestager is triumphant and Google is considering how best to respond to its court defeat on Wednesday. If he appeals, he has until October 24 to do so.

The case number for the Google Android ruling is T-604/18.

Clothilde Goujard contributed reporting.

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