European Union antitrust enforcers scored their first court victory on Wednesday in the fight against what they call anti-competitive practices by major technology companies, providing momentum for global efforts to stop Google and potentially its peers from using their dominance over tech platforms to keep competitors at bay.
The European Union’s General Court ruling almost entirely upheld the European Commission’s 2017 decision to fine Google for its practice of prominently featuring its Google Shopping comparison service in search results while relegating competing services to spots often several pages deep.
Alina Popescu, a founding partner of Romanian law firm MPR Partners, commented:
“In today’s decision, the General Court resorts to the concept of “self-preferencing” as a theory of harm in its own right under EU competition law. Self-preferencing occurs where a company which is dominant (namely, holding a significant amount of power) on a certain market, uses the same to favour its own products/affiliates present on a neighbouring market. The General Court agreed with the European Commission that Google had abused its dominant position on the general searches market by favouring its own specialised search services (comparison shopping services). In reaching this conclusion, it has found amongst others that there were no objective justifications for Google to do so, and that, in any case, Google had not demonstrated any efficiencies arising from that practice that could compensate for its adverse effects on competition.
“The decision is based on the EU law prohibition of abuses of dominance, where the dominance is not harmful in and of itself but becomes so where the dominant company harms its competitors by abnormal practices that would not be possible or harmful but for such company’s market power. There are many forms of abuses and the list remains open, but self-preferencing is a relatively new theory of harm which has only recently started to be used, with the development of big tech and the growing opposition against some of their practices. Self-preferencing is also a target for the EU’s Digital Markets Act, which prohibits this practice when perpetrated by companies deemed as “gatekeepers”. Whilst the Digital Markets Act is still undergoing enactment, the theory of harm used by the European Commission, as vetted by the General Court, as well as the existing climate surrounding big tech and the conclusions of the various market studies commissioned in relation to the development of digital markets legislation will likely serve as a deterrent to big tech against similar practices.”
Alina’s comments were featured in an article published in Law360.