Google fights ‘quasi-criminal’ EU antitrust fine – POLITICO


LUXEMBOURG — Google has accused the European Commission of imposing a “quasi-criminal” fine of 1.49 billion euros riddled with “material errors” when it sanctioned the company for abuse of a dominant position on contracts online advertising, the company’s lawyers told the EU General Court on Monday.

The US tech giant is trying to overturn the last of three multibillion-euro antitrust fines in a three-day hearing in a Luxembourg court. It lost an initial challenge to the Commission’s €2.42 billion fine on the Google Shopping service last year and will get the outcome of an appeal against a €4.3 billion fine later this year. euros for the Android operating system.

EU antitrust authorities discovered in 2019 that the search giant had imposed a series of clauses in contracts with website publishers of the AdSense for search service, to the detriment of its competitors in the market.

AdSense for search operates as an online search advertising intermediation platform, allowing websites to access Google’s ad repository. The Commission ruled illegal several contractual obligations which it said harmed competition.

The Commission accused of errors of qualification

Google lawyer Josh Holmes QC told the judges that the Commission’s decision “does not fairly or correctly characterize the terms” contained in the AdSense contracts.

The Commission targeted three clauses, covering a ten-year period between 2006 and 2016. These include exclusivity clauses that prevented website publishers from including search ads from Google’s competitors on their search pages. results, as well as their successor – the so-called premium placement bonds, which the Commission said required websites to reserve “the most profitable space on their search results pages for advertisements from Google”.

A third clause that Google inserted into its contracts in March 2009 – the so-called modification clause – required website publishers to “seek written approval” from Google before modifying the display of competing advertisements.

Holmes said entering into an exclusive supply obligation “runs counter to the reading” of agreements with publishers and that the EU executive’s interpretation of Google’s variation clause took into account its “benign purpose” which was, according to Holmes, to protect customers of the publisher’s site.

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

Google’s “ultra-dominance” in search

Nicholas Khan QC of the Commission’s Legal Service drew inspiration from the wording of the judgment of the General Court of the EU in the Google Shopping case – which supported the Commission – describing Google’s position in the search market as “ultra-dominant”.

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

Khan also probed the reasoning behind Google’s decision to change its exclusivity clauses in 2009. “If the exclusivity clause wasn’t an infringement…it’s hard to understand why Google backed out of it.” , Khan said, adding that the phasing out was unsuccessful. to abandon the anti-competitive effects, as they also appeared in later contractual additions.

Google “didn’t want to rely on the intrinsic merit of its services,” Khan said, saying the company instead chose to rely on anti-competitive clauses to take advantage of an ecosystem where “ad revenue is angular stone”.

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

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