Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Google vs. EU, Part 2: Record EU fine set for Wednesday ruling

Google vs. EU, Part 2: Record EU fine set for Wednesday ruling

The decision comes as officials are still licking their wounds after two other court defeats.

Round 2 of Google vs. the European Commission comes on Wednesday when the European Union's General Court rules on a record €4.34 billion fine for the search giant in a landmark case over its efforts to dominate the mobile phone market.

While the Commission won a resounding victory when judges upheld its first Google investigation last year, the ruling on Google's mobile-phone operating system Android will come as antitrust officials are licking their wounds after two big court defeats that canceled fines for chip firms Qualcomm and Intel.

“If they lose key parts of the Android case next week, it would be a really bad outcome for the Commission,” said Dirk Auer, director of competition policy at the International Center for Law & Economics, a U.S.-based research center backed by institutions and industry partners. “It could mean that almost [a] decade of competition enforcement, in this case, would be in part rejected by judges in Luxembourg.”

The Android case focuses on three types of contracts Google signed with smartphone manufacturers and telecom operators, which helped it expand a search empire that now faces very little competition.

First was the so-called mobile application distribution agreements (MADA) which required smartphone manufacturers to pre-install Google’s search and browser systems in order to carry the company’s Play Store app. Anti-fragmentation agreements (AFAs) also forced smartphone makers to steer clear of running alternative versions of the Android operation system. Lastly, the Commission took umbrage at Google’s revenue sharing agreements (RSAs) which allowed search revenues to be shared with mobile operators and smartphone manufacturers.

The Commission's investigation was sparked by a 2013 complaint from FairSearch, whose members include Oracle and Nokia and previously included Microsoft. The group is spearheaded by Thomas Vinje, a campaigning lawyer whose complaints helped fuel an EU antitrust battle against Microsoft in the early 2000s.


Sharing revenues


The Commission’s reading that Google’s revenue-sharing agreements amounted to a form of exclusivity rebate could be one of the more vulnerable parts of the Commission’s decision that Luxembourg will judge next week.

“The EU courts are concerned that the Commission is not properly discharging its burden of proof when it comes to showing anti-competitive effects,” Auer said, referring to the recent EU court losses against Intel and Qualcomm, both cases of which involved rebate payments to buyers for exclusive deals.

“The key question is the extent to which the coverage of those revenue-share agreements is sufficient to qualify as an infringement,” said FairSearch's Vinje. “It’ll be interesting to see how the court writes that up, since the evidence is confidential.”

Vinje also warned that the EU’s investigation into Google’s anti-competitive conduct may also have run into “procedural issues” akin to the Intel and Qualcomm cases — a plea raised by Google as part of a September hearing.

As part of the five-day showdown, Google said its rights of defense had been infringed upon as part of the Commission’s lackluster following of protocol. The company’s lawyers accused Brussels of not transcribing interviews properly, thereby hindering Google from rebutting any claims made by rivals in closed-door talks.


The DMA remedy


Google was ordered to remedy its anticompetitive harm over mobile apps for search and in 2018 introduced a choice screen for search apps to bid to be shown as an alternative to Google's search app on new phones.

Competing firms in the search business are now relying on the European Union’s recently adopted Digital Markets Act (DMA) to ensure they get the changes they originally sought, almost a decade after FairSearch’s original complaint was filed


Smaller rivals Qwant and DuckDuckGo complained that this didn't go far enough to give them a chance to take on Google's power over apps. While Google was eventually forced to ditch a paid auction system, the Commission didn't bow to rivals in overhauling the choice screen system completely or rolling it out to all phones or devices.

"DG COMP never consulted us proactively on the remedies. We had to publicly ask for it in an open letter,” a DuckDuckGo spokesperson said. “This ultimately led to limited improvements but since then we've had a constructive working relationship."

“The problem was that they didn't have a good remedy because they told Google to solve the problem itself,” added Alexandre De Streel, academic director at the Centre on Regulation in Europe (CERRE), whose members include Google and Microsoft, but also smaller companies such as DuckDuckGo.

Competing firms in the search business are now relying on the European Union’s recently adopted Digital Markets Act (DMA) to ensure they get the changes they originally sought, almost a decade after FairSearch’s original complaint was filed.

The rules — which will enter into force later this year — include forcing so-called gatekeepers such as Google to implement choice screens that allow users to change default settings when they first use a new system, as well as the obligation for firms not to prevent users from un-installing apps on their operating systems. Both concepts stem from the Android case.

“What the court will say next week could be interesting in interpreting those provisions,” De Streel said. “However, if the Commission loses aspects of the case, I don’t think it undermines the DMA, because it’s a different legal instrument that has the objective of ensuring contestability and fairness.”

For Vinje, the DMA is the ultimate answer.

"If the Commission were to lose on some of this, the DMA will kick in in the not-too-distant future and it’ll prohibit a lot of the same abuses,” he said.

The case number for the Google Android judgment is T-604/18.

AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
16 Billion Login Credentials Leaked in Unprecedented Cybersecurity Breach
Senate hearing on who was 'really running' Biden White House kicks off
Hungary Ranked Among the World’s Safest Travel Destinations for 2025
G7 Leaders Fail to Reach Consensus on Key Global Issues
FBI and Senate Investigate Allegations of Chinese Plot to Influence the 2020 Election in Biden’s Favor Using Fake U.S. Driver’s Licenses
Trump Demands Iran's Unconditional Surrender Amid Escalating Conflict
Shock Within Iran’s Leadership: Khamenei’s Failed Plan to Launch 1,000 Missiles Against Israel
Wreck of $17 Billion San José Galleon Identified Off Colombia After 300 Years
Man Convicted of Fraud After Booking Over 120 Free Flights Posing as Flight Attendant
Iran Launches Extensive Missile Attack on Israel Following Israeli Strikes on Nuclear Sites
Beata Thunberg Rebrands as Beata Ernman Amidst Sister's Activism Controversy
Hungarian Parliament Approves Citizenship Suspension Law
Prime Minister Orbán Criticizes EU's Ukraine Accession Plans
Hungarian Delicacies Introduced to Japanese Market
Hungary's Industrial Output Rises Amid Battery Sector Slump
President Sulyok Celebrates 15 Years of Hungarian Unity Efforts
Hungary's Szeleczki Shines at World Judo Championships
Visegrád Construction Trends Diverge as Hungary Lags
Hungary Hosts National Quantum Technology Workshop
Hungarian Animation Featured at Annecy Festival
Israel Issues Ultimatum to Iran Over Potential Retaliation and Nuclear Facilities
UK and EU Reach New Economic Agreement
Coinbase CEO Warns Bitcoin Could Supplant US Dollar Amid Mounting National Debt
Trump to Iran: Make a Deal — Sign or Die
Operation "Like a Lion": Israel Strikes Iran in Unprecedented Offensive
Israel Launches 'Operation Rising Lion' Targeting Iranian Nuclear and Military Sites
UK and EU Reach Agreement on Gibraltar's Schengen Integration
Israeli Finance Minister Imposes Banking Penalties on Palestinians
U.S. Inflation Rises to 2.4% in May Amid Trade Tensions
Trump's Policies Prompt Decline in Chinese Student Enrollment in U.S.
Global Oceans Near Record Temperatures as CO₂ Levels Climb
Trump Announces U.S.-China Trade Deal Covering Rare Earths
Smuggled U.S. Fuel Funds Mexican Cartels Amid Crackdown
Austrian School Shooting Leaves Nine Dead in Graz
Bezos's Lavish Venice Wedding Sparks Local Protests
Europe Prepares for Historic Lunar Rover Landing
Italian Parents Seek Therapy Amid Lengthy School Holidays
British Fishing Vessel Seized by France Fined €30,000
Dutch Government Collapses Amid Migration Policy Dispute
UK Commits to 3.5% GDP Defence Spending Under NATO Pressure
Germany Moves to Expedite Migrant Deportations
US Urges UK to Raise Defence Spending to 5% of GDP
Israeli Forces Intercept Gaza-Bound Aid Vessel Carrying Greta Thunberg
IMF Warns of Severe Global Trade War Impacts on Emerging Markets
Low Turnout Jeopardizes Italy's Citizenship Reform Referendum
Transatlantic Interest Rate Divergence Widens as Trump Pressures Powell
EU Lawmaker Calls for Broader Exemptions in Supply Chain Legislation
France's Defense Spending Plans Threatened by High National Debt
European Small-Cap Stocks Outperform U.S. Rivals Amid Growth Revival
Switzerland Proposes $26 Billion Capital Increase for UBS
×