Google loses appeal against $4 billion fine in EU antitrust ruling

Google logo on a building
The company has avoided another $6.1 billion class action lawsuit in the UK, however. Photo credit: Getty Images

Google has lost an appeal against a 2.42-billion-euro (NZ$4 billion) antitrust decision, a major win for Europe's competition chief in the first of three court rulings central to the EU push to regulate big tech.

Competition Commissioner Margrethe Vestager fined the world's most popular internet search engine in 2017 over the use of its own price comparison shopping service to gain an unfair advantage over smaller European rivals.

The shopping case was the first of three decisions that saw Google rack up 8.25 billion euros (NZ $13.4 billion) in EU antitrust fines in the last decade.

The company could face defeats in appeals against the other two rulings involving its Android mobile operating system and AdSense advertising service, where the EU has stronger arguments, antitrust specialists say.

The court's support for the Commission in its latest ruling could also strengthen Vestager's hand in her investigations into Amazon, Apple and Facebook.

"The General Court largely dismisses Google's action against the decision of the Commission finding that Google abused its dominant position by favouring its own comparison shopping service over competing comparison shopping services," the Court said.

The court said the Commission correctly found Google's practices harmed competition and dismissed the company's argument that the presence of merchant platforms showed there was strong competition.

It backed the Commission's fine, citing the serious nature of the infringement and that "the conduct in question was adopted intentionally, not negligently".

Google said it would review the judgment and that it has already complied with the Commission's order to ensure a level playing field for rivals. It did not say if it would appeal to the EU Court of Justice (CJEU), Europe's top court.

The Commission welcomed the ruling, saying it would provide legal clarity for the market.

"The Commission will continue to use all tools at its disposal to address the role of big digital platforms on which businesses and users depend to, respectively, access end users and access digital services," the EU executive said in a statement.


In other investigations, the EU watchdog is focusing on Google's use of data and its digital advertising business. The company is seeking to settle the latter case, a person familiar with the matter has told Reuters. 

Thomas Vinje, a partner at law firm Clifford Chance and who advises several Google rivals, said Vestager should expand her investigation into other areas.

"Today's judgment gives the European Commission the ammunition it needs to tighten the screws on Google in other areas where it is throwing its weight around, like in online advertising, app stores and video streaming," he said.

Lawmaker Rasmus Andresen at the European Parliament, which wants to beef up tech rules proposed by Vestager, said Europe needs both antitrust enforcement and legislation to tame U.S. tech giants.

"Only when Big Tech feels economic consequences through penalties and regulation will we see change. In addition to an adjustment of the Digital Markets Act, we call for a tightening of competition law to make it easier to split up platforms that are too dominant," he said.

To augment her antitrust powers, Vestager last year proposed new landmark tech rules that will force US tech giants to change their business models to ensure a level playing field for rivals.

Separately, the UK Supreme Court blocked a planned NZ$6.1 billion class action against Google over allegations the internet giant unlawfully tracked the personal information of millions of iPhone users.

Britain's top judges unanimously granted a Google appeal against the country's first such data privacy case, a move that upsets a string of similar claims waiting in the wings against companies such as Facebook and TikTok.

The landmark case led by Richard Lloyd, a consumer rights activist and the former director of Which? magazine, sought to extend Britain's class action regime to include compensation claims for alleged misuse of data - even if there is no obvious financial loss or distress.

Lloyd, backed by a commercial litigation funder, alleged Google secretly took more than 5 million Apple iPhone users' personal data between 2011 and 2012 by bypassing default privacy settings on Safari browsers to track internet browsing histories, and used this for commercial purposes.


"We are bitterly disappointed that the Supreme Court has failed to do enough to protect the public from Google and other Big Tech firms who break the law," he said.

His lawyer, James Oldnall from law firm Milberg, called it a "dark day when corporate greed is valued over our right to privacy".

Google said it had focused for years on products and infrastructure that respect and protect people's privacy, and that the claim was related to events that took place a decade ago and had been addressed at the time.

British business also welcomed the ruling. The Confederation of British Industry (CBI) said allowing such a case could have put a chill on investment and impacted firms across the economy.

"The Supreme Court has recognised that the 'loss of control' of an individual's personal data is not, in and of itself, sufficient to found a collective action for compensation," said Kate Scott, a partner at law firm Clifford Chance.

"Data litigation will undoubtedly continue, but with a focus on claims where actual damage has been suffered - which is the right outcome for all businesses, and not just big Tech like Google."

Under a US-style representative or class action, a group of people affected by the same issue are represented by a single person and are automatically part of a lawsuit, without individually signing up, unless they opt out.

Proponents of such lawsuits say they allow access to justice for those with small individual claims or without sufficient financial resources to take on often large, powerful companies.

Critics say such lawsuits fuel claims without merit, driven by opportunistic commercial litigation funders and law firms.