Google Must Pay €2.4bn Fine, EU Court Rules

Europe’s top court has dismissed an appeal from Alphabet’s Google against a huge fine imposed by the European Commission back in 2017.

The Court of Justice of the European Union (CJEU) announced on Tuesday that it “upholds the fine of €2.4 billion (£2bn or $2.65bn) imposed on Google for abuse of its dominant position by favouring its own comparison shopping service.

The dismissed appeal is the second major victory this week for EU antitrust chief Margrethe Vestager, who is to step down in November, after two consecutive five-year terms, During her reign the Commission confronted big tech firms, and in some cases implemented huge fines.

Her other victory came after the court also ruled this week that Apple must pay 13bn euros ($14.4 billion) in back taxes to Ireland.

.@EUCourtPress also upholds @EU_Commission‘s decision on @Google Shopping.

It confirms that @Google favoured its own comparison shopping service and actively limited choice for European users.

Also a big win for digital fairness 💪

— Margrethe Vestager (@vestager) September 10, 2024

Online shopping

The EU antitrust chief welcomed the ruling in a tweet on X (formerly Twitter) as “a big win for digital fairness.”

However it should be noted that the dismissal of Google’s appeal against the 2017 had been widely expected, after an adviser to the CJEU (advocate general Juliane Kokott) had in January 2024 said that Google’s antitrust fine should be upheld.

The CJEU rarely disagrees with the advice of the CJEU Advocate General.

It was back in 2017, when the European Commission had fined Google 2.42bn euros ($2.7bn) after it ruled that Google had used its own price comparison shopping service to gain an unfair advantage over smaller European rivals.

In February 2020 Alphabet had launched its appeal against the penalty, but in November 2021 Google lost when the EU’s General Court in Luxembourg dismissed it’s appeal of the antitrust fine.

Then in September 2023 Alphabet began its final attempt to appeal the mammoth fine for the alleged market abuse of its online shopping service, with a final appeal at the Court of Justice of the European Union.

Google had argued at the CJEU that EU regulators in 2017 had failed to show that its practices were anti-competitive.

CJEU ruling

But this week the CJEU has officially dismissed Google’s appeal.

“By today’s judgement, the Court of Justice dismisses the appeal and thus upholds the judgement of the General Court,” the CJEU stated. “The Court of Justice recalls that EU law 4 does not sanction the existence per se of a dominant position, but only the abusive exploitation thereof. In particular, the conduct of undertakings in a dominant position that has the effect of hindering competition on the merits and is thus likely to cause harm to individual undertakings and consumers is prohibited.”

“The Court of Justice states that it is true that it cannot be considered that, as a general rule, a dominant undertaking which treats its own products or services more favourably than it treats those of its competitors is engaging in conduct which departs from competition on the merits irrespective of the circumstances of the case,” it concluded.

“However it finds, in the present case, that the General Court correctly established that, in the light of the characteristics of the market and the specific circumstances of the case, Google’s conduct was discriminatory and did not fall within the scope of competition on the merits.”

The ruling is final and cannot be appealed.

Google’s reaction

The decision by the CJEU to throw out Google’s appeal saw the firm voicing disappointment with the ruling.

“This judgement relates to a very specific set of facts. We made changes back in 2017 to comply with the European Commission’s decision,” a spokesperson was quoted by Reuters as saying.

Alphabet has been hit with a total of €8.25 billion in EU antitrust fines in the last decade, that started in 2017 with the 2.42bn euros fine for thwarting rivals of its shopping comparison service.

The next significant antitrust fine came in July 2018, when the European Commission fined Google a record 4.3 billion euros ($4.6bn) for commercial practices related to its Android mobile operating system, the world’s largest ever antitrust penalty.

This was followed in March 2019 when Google was once again hit with a hefty financial penalty from European antitrust regulators. That fine concerned the firm’s AdSense advertising service and Google was ordered to pay 1.49bn euros ($1.6bn).

Google is challenging these other fines and is currently waiting for rulings.

It is also fighting against EU antitrust charges issued last year that could force it to sell part of its lucrative adtech business, after EU regulators accused it of favouring its own advertising services.