On 10 September 2024, the European Court of Justice (‘ECJ’) delivered its judgment in the Google Shopping case (C-48/22 P). The ECJ dismissed Google’s appeal and upheld in full the judgment of the General Court (‘GC’) of 10 November 2021 (T-612/17), which in turn had essentially upheld the decision of the European Commission (‘Commission’) of 27 June 2017 that had fined Google EUR 2.42 billion for illegally favouring its own comparison shopping service (‘CSS’) contrary to Article 102 TFEU.
Background to the case
Google’s flagship service is its general search engine, which provides search results to users, who pay for the service with their data. Almost 90% of Google’s revenues stem from advertisements, such as those it shows users in response to a search query.
In 2004, Google entered the separate market of comparison shopping in Europe, with a service that was initially called “Froogle”, re-named “Google Product Search” in 2008 and “Google Shopping” since 2013. It allows users to compare products and prices online and find deals from online retailers of all types, including online shops of manufacturers, platforms and other re-sellers.
From 2008, Google began to implement a change in strategy to push results from its own CSS: (i) Google systematically gave prominent placement to results from its own CSS: when a user entered a query into Google’s general search engine in relation to which Google’s CSS wanted to show results, these were displayed at or near the top of the search results pages; and (ii) Google was prone to demoting competing CSSs in its search results: competing CSSs appeared in Google’s search results based on Google’s generic search algorithms and Google included several criteria in these algorithms, as a result of which competing CSSs were prone to being demoted.
Because of Google’s conduct, results from its CSS were much more visible to users in Google’s search results, whilst results from competing CSSs were much less visible. The evidence showed that users clicked far more often on results that were more visible, i.e. the results appearing higher up in Google’s search results.
The Commission’s decision
In its decision, the Commission established that Google’s conduct consisted of the combination of prominently showing results from its own CSS and showing results from competing CSSs only as generic search results, without rich display features, and applying certain algorithms that are prone to demoting these results. The Commission found abusive the combination of these two practices – not any of them in isolation.
The Commission also established that, throughout the duration of Google’s conduct, its CSS made striking and significant gains in traffic. The fortunes of competing CSSs took a diametrically opposite turn. Notably, competing CSSs suffered sudden and severe drops of traffic. Even though some competing CSSs subsequently managed to regain some of the lost traffic, none managed to recover fully.
The General Court’s judgment
In its judgment, the GC upheld in full the decision’s findings: (i) regarding the scope of Google’s conduct; (ii) that Google’s conduct fell outside the scope of competition on the merits; (iii) that Google’s conduct decreased traffic to competing CSSs and increased traffic to Google’s CSS; (iv) that Google’s conduct was capable of restricting competition on the national markets for CSSs; and (v) that Google’s conduct was not objectively justified.
The Court of Justice’s judgment
In its judgment, the ECJ dismissed Google’s four grounds of appeal and upheld in full the GC’s judgment.
By its first ground of appeal, Google claimed that the GC erred in upholding the Commission’s finding that the legal test established by the ECJ in in its judgment in Case C-7/97 Bronner was not applicable when establishing the abusive nature of Google’s conduct. However, the ECJ disagreed, ruling that: (i) Google’s conduct concerned the discriminatory positioning and display of comparison shopping results on search results pages of Google’s general search service and not access to the boxes at the top of Google’s general search results pages; and (ii) Google’s conduct could therefore be distinguished in its constituent elements from the refusal of access in the case that gave rise to the judgment in Bronner.
By its second ground of appeal, Google claimed that the GC erred in upholding the Commission’s finding that Google’s conduct fell outside the scope of competition on the merits. However, the ECJ disagreed, ruling that: (i) whether conduct falls outside the scope of competition on the merits must be analysed in the light of all the relevant circumstances, including not only those that concern the conduct itself, but also those that concern the market or markets in question or the functioning of competition on that or those market(s); (ii) as a general rule, a dominant undertaking that treats its own products or services more favourably than it treats those of its competitors cannot be considered as engaging in conduct which departs from competition on the merits; and (iii) the GC and the Commission did not merely note the existence of such more favourable treatment, but established that, having regard to all of the relevant circumstances, Google’s conduct was discriminatory and did not fall within the scope of competition on the merits.
By its third ground of appeal, Google claimed that the GC erred in upholding the Commission’ s analysis of the causal link between Google’s conduct and its capability to restrict competition. In the absence of a counterfactual analysis carried out by the Commission, the decision’s findings relating to the capability to restrict competition of Google’s conduct remained unproven, because there was no reference point against which to assess such capability. However, the ECJ disagreed, ruling that: (i) the causal link between the conduct at issue and its capability to restrict competition is one of the constituent elements of an infringement of competition law which it is for the Commission to prove; (ii) when proving such a causal link, the Commission may rely on a range of evidence, without being required systematically to use any single tool; (iii) a dominant undertaking may put forward a counterfactual analysis in order to challenge the Commission’s assessment of the causal link; and (iv) where conduct consists in the combination of two practices, each of which is lawful in itself, an appropriate counterfactual must make it possible to examine the likely development of the market in the absence of both of those practices.
By its fourth ground of appeal, Google claimed that the GC had erred in upholding the Commission’ s finding that it did not have to examine whether Google’s conduct was capable of foreclosing as-efficient competitors. However, the ECJ disagreed, ruling that while the objective of Article 102 TFEU is not to ensure that competitors less efficient than the dominant undertaking remain on the market, it does not follow that any finding of an infringement under Article 102 TFEU is subject to proof that the conduct is capable of excluding an as-efficient competitor.
Conclusion
As Executive Vice-President Vestager noted in her remarks on the day of the ECJ’s judgment, “the Google Shopping case set a precedent and paved the way for further regulatory actions, including the Digital Markets Act (DMA) of the European Union.” This is the enduring legacy of this long-running case, that started with a complaint in 2009 and ended 15 years later with the ECJ’s judgment.
Osservatorio sullo Stato Digitale by Irpa is licensed under CC BY-NC-ND 4.0
