On 10 September 2024, the Court of Justice of the European Union (CJEU) delivered its much anticipated Google Shopping judgment. The judgment is the final word on the 2017 European Commission decision that fined Google €2.4 billion for abuse of its dominant position in the online general search market by self-preferencing its own online comparison-shopping service. Google appealed the EC decision to the General Court, which upheld the EC decision^[1]. 

The CJEU upheld the General Court judgment. In confirming the EC decision, finding that, while self-preferencing is not, as "a general rule", a departure from fair competition, in the present case "Google’s conduct was discriminatory and did not fall within the scope of competition on the merits”.

It clarifies the legal test applicable to self-preferencing. In its defense, Google argued that the EC should have assessed Google’s conduct against the refusal to supply test set out in Bronner, namely that: (i) a dominant company refuses access to an indispensable infrastructure, (ii) that refusal is likely to eliminate competition all competition in the market, (iii) that refusal is unjustified, and (iv) access is indispensable for the activity of an undertaking in another market. 

In upholding the General Court, the CJEU noted that the case did not involve a refusal of access. Rather, it involved disadvantage resulting from the more favourable positioning and display of Google’s comparison shopping service in the general search results page, coupled with the demotion (by adjustment algorithms) of results from competing comparison shopping services (such that they concern the conditions of access to Google’s general results page). The CJEU noted that such practices cannot be equated to a simple refusal to allow a competitor access to infrastructure (since that access has been granted), such that the Bronner conditions do not apply. Rather, the access has been made subject to discriminatory conditions.

The CJEU went on to consider whether the General Court (and the EC) had erred in its assessment that Google’s conduct fell outside the area of competition on the merits. Having confirmed that the advantage that a dominant undertaking confers on its own services or products (over competitors) must be assessed in the context of the circumstances as a whole, including the characteristics of the sector concerned, the CJEU went on to state that those circumstances are capable of characterizing the existence of practices falling outside the scope of competition on the merits. Specifically, it found that the more favourable positioning and display of Google’s own specialized results in the general results pages and the simultaneous demotion of results from competing comparison shopping services were relevant to classification of the practices at issue in law, and were capable of demonstrating potential exclusionary effects on the specialized comparison shopping search services market, and the success of Google’s comparison shopping service since those practices were due not to the merits of Google’s service but to those practices in the specific circumstances identified.

The judgment also reaffirmed that the object of the prohibition of the abuse of dominance is not to ensure that competitors less efficient than the dominant undertaking remain on the market. However, it went on to note that this does not imply that the finding of any infringement requires that the conduct concerned is capable of excluding an as-efficient competitor. Such an assessment is necessary only when, during the investigation, the investigated undertaking submits that its conduct was not capable of foreclosing an as-efficient competitor. In a nutshell, the as-efficient competitor test need only be applied when it is relevant. 

Finally, while the CJEU’s affirmation of the EC’s Article 102 TFEU decision against Google is not strictly relevant to the application of the Digital Markets Act (DMA), the CJEU’s discussion of Google’s “more favourable positioning and display” of its own vertical search service will be no doubt discussed in the context of the ongoing investigation of Google non-compliance with its Article 6(5) DMA obligation not to treat its own vertical search services “more favourably” than similar services offered by third parties).
 

[1] Judgment of the General Court of 10 November 2021, Case T-612/17.