The General Court has issued its ruling in Case T-334/19 | Google and Alphabet v Commission (Google AdSense for Search).
The General Court has annulled a fine of nearly €1.5 billion on Google, even though it upheld the majority of the European Commission’s findings. It has annulled the fine because it says that the Commission failed to take into consideration all the relevant circumstances when assessing the duration of the contract clauses that it had deemed abusive.
Since 2003, Google has operated an advertising platform called AdSense which includes an online advertising intermediation service called AdSense for Search (AFS).
AFS allowed the publishers of websites containing integrated search engines to display ads linked to the online queries that users could submit on those websites. Publishers could receive a part of the revenues generated by the display of those ads. To use AFS, publishers generating sufficient turnover could enter into a “Google Services Agreement” (GSA). However, GSAs contained clauses restricting or prohibiting the display of ads from services competing with AFS.
In 2010, a complaint was lodged with the German Federal Cartel Office, which was transferred to the European Commission. Between 2011 and 2017, other undertakings, including Microsoft, Expedia and Deutsche Telekom, lodged additional complaints. In 2016, the Commission initiated proceedings relating to three clauses contained in GSAs (the “exclusivity clause”, “placement clause” and “prior authorisation clause”). It indicated that those clauses could exclude services from competing with AFS. In September 2016, Google removed or amended the clauses.
In March 2019, the Commission found that Google had committed three separate infringements constituting, together, a single and continuous infringement, from January 2006 to September 2016. It imposed a fine of nearly € 1.5 billion.
The General Court upheld the majority of the Commission’s findings. However, it has concluded that the Commission made errors when assessing the duration of the clauses, as well as the market covered by them in 2016.
According to the General Court, the Commission has not established that the three clauses that it had identified each constituted an abuse of a dominant position and together constituted a single and continuous infringement of Article 102 TFEU. Therefore, it annuled the Commission’s decision in its entirety. In particular, the General Court ruled that the Commission has not demonstrated that the clauses in question had been capable of deterring publishers from sourcing from Google’s competing intermediaries or that they had been capable of preventing those competitors from accessing a significant part of the market for online search advertising intermediation in the European Economic Area (EEA) and, consequently, that those same clauses had been capable of having the foreclosure effect found by the Commission.
According to the General Court, the Commission failed to take into consideration all the relevant circumstances when assessing the duration for which publishers had been subject to those clauses. Many of the GSAs only lasted a few years, even if they had been renewed or extended. The General Court says that the Commission should not have confined itself, in its decision, to taking into account the cumulative duration of the GSAs to which those publishers had been subject, without also verifying whether publishers had had the opportunity to source from Google’s competing intermediaries, during the negotiation of any renewals or extensions of those GSAs or, depending on the case, where publishers enjoyed a unilateral termination right in respect of the said GSAs.
It also concludes that the Commission did not establish that those clauses could have produced a foreclosure effect, owing to their coverage, in 2016, as there was no data for that year.
In addition, the General Court holds that the Commission has not demonstrated that the clauses in question had possibly deterred innovation, helped Google to maintain and strengthen its dominant position on the national markets for online search advertising at issue, or that they had possibly harmed consumers.
