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

LUXEMBOURG – Google claimed the European Commission had imposed a “quasi-criminal” fine of €1.49 billion tainted with “material errors” when it penalized the company for abusing its dominant position in online advertising contracts, they said the company’s lawyers on Monday before the General Court of the European Union.

The US tech giant is seeking to overturn the latest of three multi-billion euro antitrust fines in a three-day hearing before the Luxembourg tribunal. Last year, the company lost a first challenge to the Commission’s €2.42 billion fine against Google’s shopping service and will receive the verdict later this year Result an appeal against a fine of 4.3 billion euros Android Operating system.

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

AdSense for Search acts as an online platform for brokering search engine advertising and allows websites to access Google’s ad repository. The Commission found several contractual obligations illegal because they considered they affected competition.

Commission are accused of mischaracterizations

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 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 results pages, and their successor — so-called premium placement obligations. According to the commission, websites were forced to “reserve the most profitable space on their search results pages for Google ads”.

A third clause Google included in its contracts in March 2009 — known as the amendment clause — required website publishers to “obtain written approval from Google” before changing the way competing ads are displayed.

Holmes said that establishing an exclusive supply obligation “runs contrary to the interpretation” of agreements made with publishers and that the EU executive’s interpretation of Google’s amendment clause takes into account their “good cause”, which Holmes said is to protect customers of the site of the publisher.

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

Google’s “ultra dominance” in search

Nicholas Khan QC from the Commission’s Legal Service relied on the text of the Court of Justice of the EU judgement in the Google Shopping case – which supported the Commission – and described Google’s position in the search engine market as “extremely 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 clause in 2009. “If the exclusivity clause wasn’t a violation…it’s hard to understand why Google backed out of it,” Khan said, adding that the exit did not entail waiving the anticompetitive effects, which were also reflected in later amendments to the contract.

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

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