Nandini Roy Choudhury, writer
Brief news
- The EU’s General Court annulled a €1.5 billion fine against Google, ruling that the European Commission failed to consider all relevant circumstances regarding contract clauses deemed abusive.
- Google had challenged the 2019 ruling that accused it of abusing market dominance with its AdSense for Search product.
- The European Commission may appeal the decision to the European Court of Justice, while Google expressed satisfaction with the court’s recognition of errors.
Detailed news
On Wednesday, the European Union’s second-highest court ruled that a 1.5 billion euro ($1.7 billion) sanction imposed on Google by regulators should be annulled. This decision follows Google’s challenge to the ruling.
The European Commission, the executive arm of the European Union, stated in 2019 that Alphabet-owned Google had abused its market dominance in relation to a product called AdSense for Search. This case is the result of this assertion. This product enabled website proprietors to incorporate advertisements into the search results on their own pages.
Google functions as an intermediary, enabling advertisers to display advertisements on third-party websites through search.
However, the Commission contended that Google exploited its market dominance by enforcing a series of restrictive clauses in its contracts with third-party websites. This ultimately impeded competitors from displaying their search advertisements on these websites.
At that moment, the Commission imposed a sanction of 1.49 billion euros against Google. Google submitted an appeal, which resulted in the case being transferred to the General Court of the European Union.
The EU’s General Court announced on Wednesday that it “upholds the majority of the findings” but “annuls the decision by which the Commission imposed a fine of” nearly 1.5 billion euros.
The court further stated that the Commission “failed to consider all relevant circumstances in its assessment of the duration of the contract clauses” that it had deemed abusive.
The entire decision would be meticulously examined, according to a spokesperson for Google who spoke with CNBC.
“This case pertains to a very restricted subset of text-only search ads that are displayed on the websites of a restricted number of publishers.” Even prior to the Commission’s decision, we implemented modifications to our contracts in 2016 to eliminate pertinent provisions. The spokesperson expressed satisfaction with the court’s recognition of errors in the initial decision and the subsequent annulment of the fine.
The Commission will consider the potential next actions in light of the judgment, according to a spokesperson. When communicating with CNBC, Google declined to provide an immediate response.
The Commission has the option to appeal this decision, which would result in it being sent to the European Court of Justice (ECJ), the highest court in the European Union.
Recently, a number of court cases involving U.S. and EU technology companies have reached their conclusions.
The European Court of Justice (ECJ) upheld a 2.4 billion euro ($2.65 billion) sanction against Google this month for abusing its dominant position by favoring its own purchasing comparison service. The same court also determined that Apple is required to pay 13 billion euros in outstanding taxes to Ireland, thereby concluding a decade-long legal dispute.
Source : CNBC News
