The European Union’s General Court has overruled the €1.49 billion ($1.7 billion) fine that the European Commission had imposed on Google. Indeed, it is a major development in how these tech majors continue to face extended scrutiny from the regulators.
Background of the case: Google’s alleged market abuse
In 2019, the European Commission fined Google for allegedly abusing its market dominance through its AdSense for Search product. Eventually, the product permitted website owners to host ads in their own search results, and Google acted as an intermediary between those wishing to advertise and third-party sites on which such ads would appear. In the view of the European Commission, Google was imposing abusive clauses in contracts with third-party sites that prevented competitors from placing their own ads on these sites.
The court’s ruling
In its judgment of September 18, 2024, the General Court annulled the fine, though it upheld the Commission’s findings on market dominance and prohibitory practices. However, the court invalidated the €1.5 billion fine. It argued that the European Commission did not correctly consider all relevant circumstances related to both the duration and nature of the contractual clauses.
In its press release, the court said that the Commission had not considered correctly the actual impact of clauses on competition. In this regard, the court has indicated that the identified restrictive practices were narrowly present in only text-only search advertisements on a rather limited set of publishers’ websites. The judgment by the court holds that the fine imposed by the Commission was based on the exaggeration of the practices identified impact on the market.
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Reactions from the parties involved
A Google spokesperson said, “This is a very narrow subset of text-only search ads served on fewer than 10 publishers’ sites. We had already modified our agreements in 2016 to correct the concerns leading up to this Commission decision. We are satisfied that the court recognized errors in the original decision” (via CNBC).
Subsequently, the European Commission accepted the verdict and stated that they will study the judgment. The Commission will then decide whether to challenge it at the level of the European Court of Justice, which is Europe’s highest court.
Recent related cases
This ruling comes as part of a series of other recent judgments against large technology companies. The European Court of Justice recently confirmed a €2.4 billion penalty on Google for favoring its comparison shopping service over those from competitors. Consequently, Apple must pay €13 billion in back taxes to Ireland after fighting a case for nearly a decade.