Google leaves court bruised, not broken

The case is a test for Commission competition chief Margrethe Vestager’s approach to reining in big tech.

LUXEMBOURG — It has been a good three days in court for the EU's competition chief Margrethe Vestager.

Google had appealed one of her biggest calls — the 2017 decision to fine the company €2.42 billion for unduly favoring its own shopping comparison service.

At no point during the three-day hearing at the EU General Court in Luxembourg was the Commission's position fundamentally threatened — unlike Google's.

If the case goes Vestager's way, it will strengthen her hand to take a tougher approach not only toward Google's other specialized search services, including flights and restaurants, but also on similar ventures by other tech giants, such as Facebook's Marketplace or Apple Music. It would also pave the way for damages cases as Google's crushed rivals will seek compensation.

Conversely, the EU has a big problem if the judges in Luxembourg, who serve as the only check on the unrivaled powers of the EU's antitrust czar, decide that she had been too bold. A victory for Google would be a major setback for Vestager's Brussels reign, potentially driving her to make more use of her new powers to initiate legislation, rather than focus on antitrust cases.

The most striking moment of the hearing was when Irish judge Colm Mac Eochaidh on Thursday said he saw the company's favoritism of its own shopping service as a clear infraction, and insisted that in terms of the board game Monopoly, the internet giant had landed on "Go to jail."

The same judge colored Friday's proceedings with an unexpected suggestion that the court might actually increase the €2.42 billion fine — not what the search giant's lawyers had in mind.

But that is no guarantee of victory for the Commission when the five-judge panel delivers its ruling in the coming months. Friday's exchange showed the judges are not all on the same page. Decisions of the EU General Court are taken by majority, with the presiding judge holding the casting vote.

Whatever the outcome, the parties can still appeal the judgment with the higher European Court of Justice.

Overall, Google's lawyers struggled to convince the court that the way it cultivated its shopping service was to the benefit of consumers and that the updates of its algorithms were primarily aimed at offering them more relevant results.

An intervention from European consumer organization BEUC on the side of the Commission did not help to maintain that claim.

"Google’s conduct places rivals out of the sight of consumers under the pretext of making things better for consumers when in reality it is done for Google’s own benefit," BEUC's lawyer Alessandra Fratini said.

But that does not necessarily mean Google infringed EU competition law.

One of the crucial legal questions is whether the company had a duty to provide its rivals access to its results pages. As EU law stands, that is only possible under very strict conditions, which are widely considered not to apply in this case.

The Commission is terrified that the case is requalified as such a "duty to supply" case, as Google is arguing should happen. It had its most difficult moment on Thursday when judge Stéphane Gervasoni, the lead judge on the panel, suggested that the court could update the legal standard for the digital age.

The Commission's lawyer refused to engage in the brainstorming with Gervasoni — any sign of following the reasoning that this is a duty to supply case could endanger its decision. But it was difficult to deny this case was about shopping comparison services wanting to be featured on Google's first results page.

There are other points on which the California-based company could prevail.

In its final pleadings, Google's lawyers emphasised the Commission's failure to establish a causal link between its alleged anti-competitive behavior and the loss of traffic suffered by its rivals, referring to a Google comparison of countries where the search giant did or did not apply its controversial "Panda" algorithm.

"Because traffic of [rivals] developed similarly, with or without the abuse, the abuse cannot have been the cause of the traffic decreases the [Commission's] decision described," Google lawyer Thomas Graf argued.