In a three-day session culminating on St Valentine’s day, the General Court of the European Union (the “General Court”) heard Google LLC’s (“Google”) and the European Commission’s (the “Commission”) arguments in the Google Shopping case. In 2017, the Commission adopted a decision (the “Decision”) fining Google a record-breaking €2.42 billion for abuse of dominance by positioning and displaying its own comparison shopping service (“CSS”), Google Shopping, more favorably in its general search result pages compared to rival CSSs.
Google subsequently filed an action to the General Court seeking the annulment of the Commission’s decision. According to Google, the Commission erred in its Decision on several grounds. Among other points:
- Google alleged that the Commission’s decision wrongly found that Google had favored its CSS through the positioning of Product Universals and Shopping Units on its general search result It argued that these formats improved the quality of Google’s general search service. This positioning therefore constituted competition on the merits in general search.
- Google also argued that the Commission was wrong to claim that the conduct had “diverted” traffic from rival CSSs to Google’s CSS because the Decision failed to establish that the conduct at issue had any causal link with the evolution of rivals’
- And Google argues that the Commission’s case amounts to a duty to supply, but fails to address, let alone meet, the well-established “indispensability” test for this head of abuse.
In front of a five-judge panel, Google and the Commission debated the case during the three- day hearing. They were joined by a number of interveners, including the Computer & Communications Industry Association (the “CCIA”) on the side of Google, and several CSSs, consumer organization BEUC, and two German publishers’ associations on the side of the Commission. The hearing was public and attended by the press.
Arguments were made in English, the language of the case, while questions from the bench were bilingual with the judges opting for both English and French. Simultaneous translation in English, French, and Estonian was available.
Day one: “discussions of general and specific matters concerning the context”
Google started the first day with an introduction focused on whether it has a duty when it develops innovations for its search service to ensure that rivals in other markets have access to those innovations. Discussion then focused on two aspects at the center of the factual and legal debate in this case:
At the center of the factual debate was the question of how Google positions its result formats. Google explained that it competes with rival general search engines by positioning its results on the basis of their merits. Google explained to the judges that it could not have included results generated by rival CSSs’ algorithms without undermining the quality of its general search service. The Commission claimed that Google positioned its results to promote its CSS.
The legal debate centered on whether or not the requirements set out in the Commission’s Decision in substance created a duty to supply rivals. The Commission sought to rebut Google’s argument that its case posits a refusal-to-supply. Instead, the Commission claimed that Google Shopping is a “classic” leveraging case. The legal tests needed to establish a refusal-to-supply are therefore irrelevant. The Commission, however, admitted that Google may not have had an anticompetitive strategy, but, nonetheless, intentionally or negligently favored its own CSS by displaying it more favorably.
Day two: market definition and effects
The second day of the hearing began with discussions on market definition. The debate centered on Google’s argument that merchant platforms like Amazon are part of the relevant market. The Commission and interveners retorted that Amazon could not be a competitor of Google’s because it was also a customer of Google’s.
The discussion moved on to the effects of the conduct. Google explained that the Commission’s analysis of “diversion” was flawed because it wrongly attributed traffic declines experienced by CSSs to the alleged abusive conduct without establishing that this conduct had caused these declines. According to Google, this flaw in the Decision was due to its failure to perform a proper counterfactual analysis. Google filled this gap itself with an analysis that compared traffic developments in conditions where the abuse alleged by the Commission had not taken place.
This analysis showed that traffic evolved the same way regardless of whether or not the alleged abuse was in place. Google argued that its allegedly abusive conduct could not therefore have caused the effects as attributed by the Decision. Google also argued that the Commission wrongly counted clicks to merchants’ websites as if they were clicks to Google’s website, thereby vastly exaggerating the alleged increase in traffic to Google’s service.
The Commission replied that the counterfactual required removal of demotions of rivals in search results and favorable placement of Google’s own results even though demotions were not the alleged abuse. The Commission also argued that clicks from the Shopping Unit to the sites of merchants should be considered as traffic to Google’s CSS because it allegedly benefited financially from these clicks but did not present evidence for this claim.
Day three: fines and final replies
Google first argued that no fine should have been imposed in this case. It argued that existing case law suggested its conduct was not anticompetitive. It also pointed out that the Commission, during the administrative procedure, expressly ruled out the equal treatment principle it subsequently said was violated. Google additionally stated that, even if a fine were appropriate, the calculation used by the Commission was flawed.
In particular, the Commission had failed to take into account the nature of the infringement when setting the 10% “gravity multiplier” and the additional amount. The Commission responded that Google should have known its conduct could amount to a breach of European competition laws. Its representatives also defended the Decision’s calculations as falling within the ambit of the Commission’s discretion.
In the final replies, Google emphasized that it had competed on the merits as a general search service, while the Commission explained again that the Decision implies a classic leveraging case.
After each session, the judges asked questions focusing on legal or technical details, mostly to better understand Google’s behavior, whether it could have acted differently, and Google’s motivations. Initial questions focused on the legal standard. Judge Lauri Madise and the General Court’s President, Stéphane Gervasoni, asked the parties whether the legal tests applicable to establish a duty to supply should apply in the present case, and what the appropriate standards were. The Commission replied that these tests are irrelevant in this case, while Google argued that watering down the test could undermine innovation. The Court also explored whether the Commission must demonstrate a deviation from competition on the merits or whether it is sufficient to rely on alleged foreclosure of rivals.
Judge Mac Eochaich, asked the parties as to the extent of the General Court’s discretion in setting the fine. This much reported question led to a debate around the Court’s ability to make decisions beyond the pleas made by the parties and, were the Court empowered to reach beyond the pleas, the procedural aspects of doing so.
The panel will now deliberate and will deliver their ruling within an expected 12 to 24 months.
 Google LLC and Alphabet Inc. v. European Commission (Case T-612/17), case pending. Google is represented by Cleary Gottlieb.
 CSSs are online search services that allow users to search for products and compare their prices and characteristics across offers from different merchants. The EC’s decision concludes that CSSs constitute a distinct product market that excludes merchant platforms like Amazon and eBay.
 Since the reform of the Rules of Procedure of the General Court in 2016 and the addition of new judges, the General Court has more opportunities to hear cases in a panel of five judges and it is not anymore a sign of the importance given to the judgment. The number of cases heard in chambers of five judges increased from 12 in 2016, to 18 in 2017, and 87 in 2018. See articles 13 and 14 of the Rules of Procedure of the General Court, 4 March 2015 (OJ 2015 L 105, p. 1) as amended in 2016, available at: https://curia.europa.eu/jcms/upload/docs/application/pdf/2008-09/txt7_2008-09-25_14-08-6_431.pdf. See also K. Lenaerts, J.C. Bonichot, and others “An ever-changing Union; perspectives on the future of EU law in honour of Allan Rosas,” Oxford, Hart, 2019, p. 125.
 Foundem, Kelkoo, Twenga, and Visual Meta.
 The following topics were discussed during the Q&A sessions (i) competition on the merits in general search; (ii) ranking and relevance of specialized results and generic results; (iii) ranking and relevance of ads; (iv) Google’s ability to include results generated by rivals’ algorithms; (v) loosening of duty to supply standard; (vi) triggering of Product Universals; (vii) retailers’ choices in working with aggregators or merchant platforms; (viii) header link of the Shopping Unit; (ix) nature of the Shopping Unit; (x) calculation of the deterrence multiplier; (xi) increase of the fine; and (x) role of negligence.