The EU flag is displayed with the Google logo.
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The European Court of Justice ruled on Wednesday that the European Commission was right to fine Google for a breach of rust protection – in what represents a landmark moment in EU policy that could affect the business models of major technology players.
The ruling comes after the European Commission, the EU’s executive arm, said in 2017 that Google had favored its own comparison services and fined the company € 2.42 billion ($ 2.8 billion) for violating antitrust rules. The alphabet unit Google challenged the claims by using the EU’s second highest court.
“The court finds that Google, by favoring its own price comparison service on its general results pages through a more favorable view and placement, while the results of competing comparison services on those pages using ranking algorithms differed from the competition,” the court said in a press release Wednesday.
In addition, the court also upheld the fine of 2.42 billion euros. “The court concludes its analysis by finding that the amount of the fine imposed on Google needs to be confirmed,” the court added.
Wednesday’s verdict can be appealed and brought before the EU’s highest court. The European Commission and Google were not immediately available for comment when contacted by CNBC on Wednesday.
The legal precedent
This is not the first time that the EU High Court has ruled in an anti-rust case brought by the European Commission and targeted a technology giant.
The chamber ruled in July 2020 that the commission had not proved that the Irish government had given a tax advantage to Apple – this was after the Brussels-based institution ordered the Republic of Ireland to recover 13 billion euros from the iPhone maker in 2016.
The court decision was a significant blow to Margrethe Vestager, the EU’s competition director, and her team. It basically said they were not doing a good job of proving their case.
Vestager decided to appeal the decision and pushed it to the EU’s highest court, the European Court of Justice, where the case has not yet been decided.
At the time, the judgment of the Court of First Instance also shed light on one of the main challenges facing European competition policy: in competition cases, it is the Commission that must bear the bulk of the evidence and not the defendant.
Impact on Big Tech?
The EU is currently discussing how to sharpen its rulebook to ensure fairer competition across the 27 member states.
Thomas Vinje, an antitrust partner at law firm Clifford Chance, told CNBC on Tuesday that the court’s decision “will put a damper on the DMA” [Digital Markets Act]. “
The DMA is one of the major pieces of legislation that the EU is working on and that, once approved, will try to tackle any behavior that closes European markets. This could lead to changes in parts of the tech giants’ business models.
One of the potential changes is to stop self-preference – when, for example, app search results on an Apple product show opportunities developed by the technology giant. The idea is to give smaller app developers the same chance of being found and chosen by consumers. Lawmakers are also looking at limiting target advertising to give users more privacy. This can also affect how Big Tech works.