Google lost its latest bid to overturn an antitrust ruling that helped galvanize an era of increased scrutiny of Big Tech companies, in a case that comes with steep fines, after the European Union’s top court on Tuesday overturned the ruling.
The European Union’s top court has rejected Google’s appeal against a $2.7 billion fine from the European Commission, the head antitrust enforcement agency in 27 countries, which found the comparison shopping service violated antitrust laws.
Also on Tuesday, it challenged an order to pay back $14.34 billion in back taxes to Ireland, after the European Court of Justice ruled in favour of the European Commission in a separate case targeting illegal state aid against global companies.
The companies are currently exhausting appeals in cases dating back a decade. The combined effect of these court rulings is that European Commissioner Margrethe Vestager, who is due to step down next month after 10 years as the European Commission’s top competition watchdog, will be forced to resign.
Experts said the ruling showed how emboldened the watchdog has become since the first cases began.
One takeaway from the Apple ruling is “the sense that, once again, EU authorities and courts are prepared to use their (collective) powers to put Big Tech on the backfoot if necessary,” Alex Hafner, a competition partner at law firm Fladgate, said in an email.
Gareth Mills, a partner at law firm Charles Russell Speechleys, said the Google ruling “reflects the confidence that competition regulators around the world are tackling what they see as excesses by big tech companies.” The court’s willingness to “uphold the legal arguments and the level of penalties” will undoubtedly further embolden competition regulators.
The shopping fine was one of three huge antitrust fines levied against Google by the commission, which punished the Silicon Valley giant in 2017 for unfairly steering visitors to its own Google Shopping service instead of competitors’.
In a brief statement, Google said it was “disappointed by the court’s decision, which dealt with very specific facts.”
The company said it would comply with the commission’s decision to treat competitors equally, and it has begun holding auctions for shopping search listings in which it bids alongside other comparison shopping services.
“Our approach has been successful for over seven years, generating billions of clicks across over 800 comparison shopping services,” Google said.
European consumer group BEUC welcomed the court’s decision, saying it showed how EU competition law “remains highly relevant” in digital markets.
“Ultimately, this is a good outcome for all European consumers,” Secretary-General Agustin Reyna said in an interview. “It means that many small businesses and rival companies can access a range of comparison shopping sites. They don’t have to rely on Google to reach their customers.”
Google is still appealing two other EU antitrust cases, one relating to a $4.55 billion fine in 2018 and another relating to a $1.64 billion fine in 2019.
Despite the amounts involved, the adverse rulings will leave a small financial blow to some of the world’s richest and most profitable companies: The total of $17 billion imposed on Apple and Google parent Alphabet represents 0.3% of their combined market value of $5.2 trillion.
Apple shares were down slightly in late afternoon trading on Tuesday, while Alphabet shares rose 1%, suggesting investors were unfazed by developments in Europe.
These three cases heralded a broader regulatory approach to the tech industry around the world. The EU has since launched further investigations into Big Tech companies and enacted new laws to prevent them from cornering online markets.
European Commissioner and Executive Vice-President Margrethe Vestager said the shopping scandal was one of the first attempts to regulate digital companies and that it had inspired similar efforts around the world.
“This case was symbolic in that it demonstrated that even the most powerful technology companies can be held accountable. No one is above the law,” Vestager told a news conference in Brussels.
Vestager said the commission would continue competition litigation while enforcing the Digital Markets Act, a comprehensive rulebook that forces Google and other tech giants to give consumers more choice by following a set of “dos” and “don’ts.”
Google also faces pressure from the EU and UK, which are conducting separate investigations into its lucrative digital advertising business, and from the US, where the Department of Justice is investigating the company’s dominance in ad tech.
Apple failed in its latest attempt to avoid paying back Irish tax on Tuesday after the Court of Justice upheld a lower court ruling against the company in a dispute dating back to 2016.
Vestager said she had expected to lose and hailed it as a landmark victory for “tax justice.”
It was an unexpected victory for the commission, which has previously targeted tax rulings later overturned on appeal as part of EU efforts to gut sweet deals that allow companies to pay little in tax in a fight that highlights the debate over whether multinationals are paying their fair share around the world.
The case ended in a draw, with CEO Tim Cook calling it “total political bullshit.” Then-President Donald Trump denounced Vestager, who spearheaded a campaign to gut special tax deals and crack down on America’s biggest tech companies, as a “tax cunt” who “hates America with all her heart.”
Chan wrote for The Associated Press.
(Tag Translation) Business
