Google fights “quasi-criminal” EU antitrust law – POLITICO

LUXEMBOURG – Google claimed the European Commission had imposed a “quasi-criminal” fine of €1.49 billion.

The US tech giant is seeking to overturn the latest of three billion-dollar antitrust fines at a three-day hearing before the Luxembourg tribunal. It lost a first lawsuit against the Commission’s €2.42 billion fine against the Google Shopping service last year and will later this year be the result of an appeal against a €4.3 billion fine for get the Android operating system.

EU antitrust authorities found in 2019 that the search giant had imposed a number of clauses in contracts with website publishers on the AdSense for Search service, to the detriment of competitors in the market.

AdSense for search acts as a brokerage platform for online search advertising, giving websites access to Google’s ad repository. The Commission has declared illegal a number of contractual obligations which it believes have harmed competition.

Commission accused of false characterization

Google’s attorney, Josh Holmes QC, told the judges that the commission’s decision “does not fairly or correctly characterize the clauses contained in the AdSense contracts.”

The commission targeted three clauses covering a decade-long period between 2006 and 2016. These include exclusivity clauses that prevented website publishers from including search ads from Google’s competitors on their results pages, and their successor – so-called premium placement obligations. which, according to the Commission, forced websites to “reserve the most profitable space on their search results pages for Google ads”.

A third clause Google added to its contracts in March 2009 — known as the amendment clause — required website publishers to obtain “written approval” from Google before altering the display of competing ads.

Holmes said that finding an exclusive supply obligation “contradicts the interpretation” of the agreements with the publishers and that the EU executive’s interpretation of Google’s amendment clause takes into account its “benevolent purpose”, which Holmes said was to attract customers protect the publisher’s website.

He said the Commission was guilty of “material error of analysis” and the evidence did not indicate that the clauses had anti-competitive effects.

Google’s “ultra dominance” in search

Nicholas Khan QC of the Commission’s Legal Service relied on the wording of the EU Court’s Google Shopping ruling – which supported the Commission – and described Google’s position in the search market as “ultra-dominant”.

“Google’s dominance of general search gave it a tremendous advantage,” Khan said, adding that the company’s exclusivity clauses are “all-encompassing.”

Khan also examined the reasons for Google’s decision to change its exclusivity clauses in 2009. “If the exclusivity clause wasn’t a violation…it’s hard to understand why Google pulled out of it,” Khan said, adding that the exit wasn’t a result of the anticompetitive effects being waived because they also surfaced in ex post amendments.

Google “did not want to rely on the intrinsic value of its services,” Khan said, arguing that the company chose to rely more on anti-competitive clauses to gain advantage in an ecosystem where “ad revenue is the lifeblood “.

The hearing runs until Wednesday. Monday’s arguments also include the Commission’s market definition analysis as well as a deeper dive into Google’s exclusivity clauses.

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