European antitrust verdict could stifle innovation, Google tells EU court

Competition law does not require Google to 'hold back innovation', the company argues

Google has told EU judges that the €2.4 billion fine levied by European Commission antitrust regulators over accusations it unfairly down-ranked rivals to its Google Shopping service in its search engine penalises innovation.

The three-day hearing in the landmark case kicked off in EU's General Court in Luxembourg on Wednesday, where Google tried to convince the judges that the European antitrust office went too far in imposing the €2.4 billion antitrust fine on the company in 2017.

"If Google would have faced the commission's decision in 2008, Google would have had no other option but to abandon its innovative technologies and its improved designs," Thomas Graf, a lawyer for the search giant, told a panel of five judges.

"Competition law does not require Google to hold back innovation or compromise its quality to accommodate rivals. Otherwise, competition would be restricted and innovation would be stifled," he added.

If Google would have faced the commission's decision in 2008, Google would have had no other option but to abandon its innovative technologies and its improved designs

Graf claimed that Google did not favour its own services in its de facto monopoly search engine and only competed on its merits.

Google's lawyer Meredith Pickford further argued that the company has always aimed only to present relevant search results for users. Pickford added that the changes introduced by Google in the past to the way it ranked results were intended only to filter out poor-quality websites and to improve the quality of Google's results.

The company modified its 'Panda' algorithm in 2011 in a way that caused many rival shopping search services to be placed further down Google's search rankings.

The case is, in a nutshell, about what users are presented with, having made a search

A lawyer for the Computer & Communications Industry Association (CCIA) lobby group in Brussels, Belgium supported Google in court. It argued that the European Commission's antitrust approach to internet monopolies like Google could end up harming consumers.

However, the Commission's lawyer, Nicholas Khan, rejected the claims, saying that "Google's status as the colossus of the digital age" was unchallenged and "until recently unquestionable".

"The case is, in a nutshell, about what users are presented with, having made a search," he said, according to Bloomberg.

Thomas Höppner, a lawyer for three companies fighting Google, argued that the company had abused its overwhelming dominance of the market that, if not stopped, would kill competition dead in all the markets in which the company decides to enter.

A final decision in the case is expected to come next year.

This particular legal battle between Google and the EU's antitrust authorities has continued simmered since 2017, when the EU's competition commissioner Margrethe Vestager slapped a €2.4 billion fine on Google claiming that it had unfairly downranked shopping search services from appearing in search results in order to boost traffic to its own Google Shopping service.

Following an investigation, Vestager concluded that Google had abused its dominance in online search by favouring results that linked to Google Shopping.

However, Google rejected regulator's findings and challenged the decision in the EU's General Court in Luxembourg.

Since then, two other decisions by EU competition commissioner for different issues have increased the level of fines imposed on Google to €8.25 billion. The number and amount of fines levied on Google for various infractions of antitrust laws meant that in 2018 the company set aside more money for fines than it paid in corporate taxes.

In 2018, Google was imposed a fine of €4.34 billion ($5bn) over it faulty licensing terms for Android operating system.

Last year, the EU imposed another fine of €1.49 billion on Google for mistreating publishers using Google's AdSense tool to monetise their websites. Google was also accused last year of failing to comply with the terms of the settlement in the Google Shopping case.