Google wins landmark EU antitrust battle, easing legal pressures

Google landed a major antitrust victory on Wednesday as the EU’s Court of Justice annulled a $1.7 billion (€1.49 billion) antitrust fine against the search giant.

The EU court stated that the European Commission failed to fully consider all relevant factors regarding the duration of the abusive contract clauses. The court, however, upheld most of the Commission’s findings.

“By today’s judgment, the General Court, after having upheld the majority of the Commission’s findings, concludes that that institution committed errors in its assessment of the duration of the clauses at issue, as well as of the market covered by them in 2016,” the court said in a statement.

The European Commission, in its 2019 ruling, had accused Google of exploiting its market dominance by restricting websites from using ad brokers other than its AdSense service for search ads.

This would come as a relief for Google, which is facing other legal challenges. Just last week, the European Data Protection Commission (DPC) opened an inquiry into its use of personal data.

In August, a US District Court ruled that the tech giant is a monopoly, accusing it of leveraging its dominance in the online search market to hinder competition. A separate trial centered on its advertising business also commenced this month.

Meanwhile, in a separate ruling, Qualcomm failed to get the EU penalty imposed on it overturned, highlighting contrasting outcomes for the two major players in their ongoing regulatory battles with European authorities.

Implications for Big Tech

The Google ruling could influence future antitrust investigations and enforcement in the region, potentially leading to a more balanced and competitive environment, though the long-term impact remains uncertain.

“In this instance, the ruling is favorable for Big Tech as it signals a shift toward a more balanced approach to antitrust enforcement, taking into account both market impact and consumer welfare,” said Thomas George, president of Cybermedia Research. “This victory could foster a competitive environment where the constant threat of sanctions does not stifle growth and innovation.”

However, the court’s citation of errors in the Commission’s investigation, including issues with its definitions, suggests that a likely outcome is the Commission adopting a more cautious approach moving forward.

 “While this is a significant win for Google, it is worth noting that the court largely agreed with the arguments against the company, and the annulment was largely driven by the commission’s failure to build a strong case,” said Mayank Maria, vice president of Everest Group.

Maria added that this suggests there may not be a significant shift in the bloc’s approach toward Big Tech in the near future, even as new leaders take charge of two key roles — the antitrust chief and the digital chief — responsible for regulating Big Tech practices in the EU. Earlier this week, the European Commission appointed a new team to lead the institution for the next five years.

Qualcomm ruling in contrast

In Qualcomm’s case, the company secured a slight reduction of its EU antitrust fine, lowering the penalty to $266 million (€238.7 million) from the original $270 million (€242 million), but the court dismissed its other claims.

The fine, handed down by the European Commission in 2019, was based on claims that Qualcomm engaged in predatory pricing from 2009 to 2011, selling chipsets below cost to undercut British software firm Icera, now owned by Nvidia.

Compared to the Google ruling, Qualcomm’s failure to successfully appeal its fine highlights a different set of challenges, underscoring the varied regulatory issues impacting different areas of the technology sector, according to George. “As for its relevance to the semiconductor and chip markets, this ruling reinforces the substantial restrictions these markets will continue to face, particularly concerning competitive practices,” George said. “Competition within the semiconductor space could drive businesses to address issues like predatory pricing and stricter antitrust enforcement.”