Earlier this week, Europe’s General Court largely affirmed a 2018 decision finding that Google and parent company Alphabet abused their dominance, while slightly adjusting the largest fine ever imposed by a competition authority in Europe downwards to €4.125 billion. The European Union antitrust watchdog alleged that Google excluded competitors through restrictions and requirements for phone manufacturers who were forced to make big concessions to Google in order to use its apps and services.
Four years ago, the European Commission (EC) determined that Google was imposing anticompetitive contractual restrictions on original equipment manufacturers (OEMs) and mobile network operators (MNOs) in order to protect its dominant position for “general search services.” The regulatory body noted that approximately 80% of smart mobile devices used in Europe and worldwide were running Google’s Android operating system.
In particular, the EC pointed to three sets of contractual restrictions, including contracts requiring that OEMs pre-install Google Search and browser Chrome in order for them to be able to obtain a license to use the Google Play Store. The EC also singled out Google’s revenue sharing agreements for OEMs and MNOs who agreed not to pre-install a competing general search service on any device within an agreed portfolio.
Google contested the ruling’s relevant market assessment and characterization of the restrictions it imposed on device makers and carriers. But the General Court declined most arguments, only siding with Google insofar as it disagreed with the EC about the portfolio-based revenue sharing agreements, according to a court press release.
The decision, which can be appealed by both parties to Europe’s highest tribunal, comes shortly after the European Parliament enacted the ground-breaking Digital Markets Act (DMA) and the Digital Services Act (DSA) to reign in the perceived power enjoyed by the world’s largest tech companies. As previously reported, the DMA carries fines of up to as high as 10% of a regulated entity’s global annual earnings and up to 20% for repeat violators, yet the EU’s ability to enforce the law remains to be seen.
