On Wednesday 14 September, the EU General Court largely upheld the European Commission’s decision that Google imposed illegal restrictions on Android mobile device manufacturers and mobile network operators in order to consolidate the dominant position of its search engine.
However, in order to better take into account the gravity and duration of the infringement, the General Court considers it appropriate to impose a fine of €4.125 billion on Google, following a reasoning which differs in certain respects from that of the Commission (Case T-604/18). The Commission had imposed a fine of €4.3 billion in 2018.
However, the General Court’s decision represents a stinging setback for US internet giant Google by upholding a record fine imposed in 2018 for abuse of the dominant position of its Android operating system.
Even if reduced, this fine remains the highest ever imposed by the Commission, which monitors the proper functioning of competition rules in the Single Market.
The Court’s decision can be appealed within two months.
“We are disappointed that the General Court did not annul the decision in its entirety. Android has created more choice for everyone (...) and supports thousands of businesses in Europe and around the world”, said Google, which disputes any anti-competitive practices. The group did not immediately say whether it was considering submitting an appeal to the EU Court of Justice.
The Commission said it “took note of the judgment”, noting that it “largely confirmed” the fine imposed in 2018.
The Commission accused Google of forcing manufacturers of phones and tablets using its operating system to pre-install its search engine and browser, Chrome, to eliminate competitors. It would have abused the power of its Android system, which is used on 80% of the world’s mobile devices.
The EU General Court confirmed that Google had indeed “imposed unlawful restrictions (...) in order to consolidate the dominant position of its search engine”.
The General Court dismisses the action brought by Google in essence.
The General Court first examined the plea alleging errors of assessment in the definition of the relevant markets and in the subsequent assessment of Google’s dominant position on some of those markets.
The Commission rightly concluded that the open nature of the Android source code licence did not constitute a sufficient competitive constraint to counteract the dominant position at issue, according to the General Court. The General Court observes that the Commission duly referred, in its presentation of the various relevant markets, to their complementarity, presenting them as interconnected, in particular with regard to the overall strategy implemented by Google in order to promote its search engine by integrating it into an “ecosystem”.
Secondly, the General Court examined the various pleas in law alleging that the restrictions at issue were wrongly assessed as abusive.
Firstly, as regards the pre-installation conditions imposed on mobile device manufacturers, the General Court notes that, while those conditions do not prohibit the pre-installation of competing applications, such a prohibition is nevertheless provided for -for the devices that were covered by them - by the revenue-sharing agreements, i.e. more than 50% of the Google Android devices sold in the EEA between 2011 and 2016, which the Commission was able to take into account as part of the combined effects of the restrictions at issue.
Secondly, as regards the assessment of the single pre-location condition included in the portfolio revenue-sharing agreements, the General Court finds that the Commission was entitled to regard the agreements at issue as constituting exclusivity agreements, in so far as the payments provided for were conditional on the absence of pre-location of competing general research services on the portfolio of products concerned.
This case is one of the three major cases opened by the Commission against Google.
The Commission fined Google €2.4 billion in 2017 for anti-competitive practices in the price comparison market. This fine was confirmed in January by the EU General Court. Google subsequently announced that it was appealing.
In 2019, it claimed another €1.5 billion from Google for competition infringements attributed to its AdSense advertising network.
Link to the judgment: https://aeur.eu/f/32c (Original version in French by Lionel Changeur)