Google Sued Over Abuse of Search Power, Opening Path for More Claims
Google Sued Over Abuse of Search Power,
Opening Path for More Claims
The litigation could spark similar action by firms
that have hesitated to take on the Silicon Valley giant
By Bojan
Pancevski Updated April 12, 2019 7:00 a.m. ET
A German price-comparison portal has become the first
major company to sue Alphabet Inc.’s
Google while invoking a 2017 European
antitrust decision to fine the U.S. technology giant for
abusing its dominant position in the search-engine market.
If it succeeds, the litigation could spark similar actions
in Europe by other tech firms that have hesitated to take on the Silicon Valley
company.
In the suit filed in a Berlin court Friday, Idealo
internet GmbH, a leading price-comparison service that is majority-owned by
publisherAxel Springer SE, alleged that Google
made it harder for users of its search engine to find links to Idealo after the
U.S. company started promoting its own price-comparison offering, now called Google
Shopping. Alphabet’s European entity, Google Ireland Ltd., is also targeted by
the suit.
The two-year-old ruling invoked by Idealo led the European
Union’s competition authority to fine the tech giant €2.42 billion ($2.72
billion) for prioritizing Google’s offerings over those of rivals in search
results. At the time, EU Competition Commissioner Margrethe Vestager encouraged
companies to use the ruling as a basis to seek damages against Google.
Google appealed that decision and said at the time it
“respectfully disagreed” with the ruling.
Idealo is seeking €500 million in damages from lost revenue
after Google allegedly altered its search results. The German company also
claims Google violated the 2017 decision by failing to alter how it promotes
its own services in search results even after being fined.
A spokesperson for Google declined to comment because the
company hadn’t seen the court filings Friday.
Kent Walker, Google’s senior vice president of global
affairs, said in a March blog post that the company had “already made a wide
range of changes to our products to address the commission’s concerns. Over the
next few months, we’ll be making further updates to give more visibility to
rivals in Europe.”
Thomas Höppner, a lawyer representing Idealo, said the
potential damages could increase substantially should the judge accept his
demand to subpoena data from Google to determine the exact scale and period of
the alleged antitrust violation.
“I’m absolutely convinced that our case will send an
important signal to the very many companies that have suffered similar damages.
We are talking about a lot of money,” Mr. Höppner said. “Many companies are not
clearly aware of the potential for claiming back damages they suffered from
Google.”
While Google has changed how it displays price-comparison
results, Mr. Höppner said the judge could opt to wait for the outcome of the
company’s appeal before making a final ruling. But that even in that case, he
said, the proceedings could bring about new evidence.
The European Commission—the EU’s governing body, responsible for enforcing laws
within the bloc—hasn’t said whether Google is complying with its 2017 decision,
but Ms. Vestager has stated in several public appearances in recent months that
competition in the sector was improving and that Google was compliant.
Philipp Peitsch, Idealo’s chief executive, said the
lawsuit was a necessary step to counter what he called Google’s monopolistic
behavior.
“We
want to set an example with this lawsuit that one can defend oneself against
the illegal behavior of Google. The damages suit is for us a necessary and
important step in our engagement for a fair competition, diversity in the
market and transparency of pricing for the consumers,” Mr. Peitsch said.
BEUC, a European federation of consumer protection groups,
wrote to the commission last Friday alleging that Google wasn’t in full
compliance, a claim to which the company hasn’t publicly responded.
Mr. Walker said in a blog post following the Commission’s decision in 2017 that
“when you use Google to search for products, we try to give you what you’re
looking for. Our ability to do that well isn’t favoring ourselves, or any
particular site or seller—it’s the result of hard work and constant innovation,
based on user feedback.”
Kelkoo Group, a British-based price-comparison company,
took legal action in the U.K. against Google before the Commission’s decision
and said it would now use evidence cited by the Commission in its own
litigation against tech giant.
Richard Stables, Kelkoo’s chief executive, said Google’s
changes since the 2017 ruling weren’t making a significant difference for
companies like his.
Google has faced a number of EU antitrust investigations.
Most recently, the commission ordered it in March to pay €1.49 billion for
allegedly cutting out rivals from online advertising.
“These huge fines are just a tax for Google to take over
the internet, but there is no change in behavior,” Mr. Stables said.
Idealo claims its visibility to users, as measured by
independent online monitoring service Sistrix, dropped by half in the two years
after Google started promoting its own price-comparison service on top of
search results. While this visibility has recovered somewhat, Idealo said, it
remains far below its peak of late 2013.
“The Commission takes note of the ongoing national proceedings
concerning potential damages related to Google’s anticompetitive behavior in
the comparison shopping service market,” said Ricardo Cardoso, a spokesman for
the European Commission, in reference to the Idealo suit.
A Commission decision constitutes proof that the behavior
took place and was illegal, giving any individual or company affected by
Google’s antitrust breach an opportunity to take to the courts, Mr. Cardoso
added.
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