19 Jul 2018
In a press release issued on the 18th July, EU Competition Commissioner Margrethe Vestager announced that the European Commission fined Google a record €4.3 billion for illegal practices that breached EU antitrust rules.
According to the European Commission, since 2011, Google has imposed illegal anti-competitive restrictions on Android device manufacturers and mobile network operators through contractual terms to cement its dominant position in general internet search.
Google has 90 days to end its practices by overhauling one of its most important mobile platforms, or face further penalties of up to 5% of the average daily worldwide turnover of its parent company, Alphabet Inc. The Commission’s ruling is subject to appeal under EU law, and U.S. company has argued that the Commission’s case should be rejected, and has already announced that it will appeal the decision. Google’s opposition relies on the arguments that the Commission’s case misconstrues the product market under competition law, that it fails to recognise the ease with which customers can switch to competing products, and that the legal and contractual rules that underpin the platform are fundamental to product experience and app development.
This penalty is notable because it is the largest ever antitrust fine levied by Europe’s competition regulator against a single company, and is nearly double the previous record. In June 2017, the Commission fined Google €2.42 billion for abusing dominance as search engine by giving illegal advantage to own comparison shopping service.
Although market dominance is not illegal under EU rules, dominant entities are entrusted with a special responsibility to not abuse their position of dominance in the markets in which they operate. Today’s ruling comes after months of so-called ‘techlash’ against dominant market players in the technology space through proposals for new tax, privacy and the spread of misinformation (‘fake news’), and intellectual property rules, and following the entry into force of tighter regulations on the digital economy through the GDPR.
Author: Rachel Vella Baldacchino, Associate at WH Partners.