Google sued in Europe for $2.4BN in damages over Shopping antitrust case

Google is being sued in Europe on competitors grounds by value comparability service PriceRunner which is looking for at the least €2.1 billion (~2.4BN) in damages.

The lawsuit accuses Google of continuous to breach a 2017 European Fee antitrust enforcement order towards Google Purchasing.

In addition to fining Google what was — on the time — a record-breaking antitrust penalty (€2.42 billion), the EU’s competitors division ordered the search big to stop unlawful behaviors, after discovering it Google giving distinguished placement to its personal procuring comparability service whereas concurrently demoting rivals in natural search outcomes.

Instantly following the order, Google made some preliminary tweaks to how its product search service works — doubling down on an public sale mannequin. However complainants have been immediately crucial of the modifications, arguing they neither remedied the unfairness nor complied with the EU’s requirement for equal therapy of value comparability companies.

The next yr, an investigation by Sky Information additionally accused Google of making an attempt to avoid the EU antitrust ruling by providing incentives to advert companies to create fake comparability websites crammed with advertisements for his or her shoppers’ merchandise which Google may show within the Google Purchasing field to current the impression of a thriving market for value comparability companies.

Extra lately (April 2020) Google introduced a serious retooling of product search beneath the Purchasing ‘tab’ — saying it could swap Google Purchasing to principally free listings globally by the tip of 2020. Albeit, the service nonetheless presents advertisers the flexibility to pay Google for featured listings.

Google additionally continues to indicate product search advertisements alongside common search outcomes — in an advertisements field which features a “Store now” call-to-action within the title (see the field displayed under proper for examples of advertisements displayed after a product seek for “Samsung TV”):

PriceRunner’s lawsuit alleges Google has continued to violate competitors legislation in relation to product search, in addition to looking for compensation for historic infringements which have allowed Google to reap income at rivals’ expense.

To again up its allegations, the search comparability firm factors to a examine carried out by accountancy firm, Grant Thornton, which it says discovered costs for presents proven in Google’s personal comparability procuring service could be 16-37% greater for common classes like garments and footwear, and between 12-14% greater for different forms of merchandise vs rival value comparability companies.

PriceRunner additionally cites estimates that European customers are overpaying billions per yr because of Google’s search engine returning hyperlinks to merchandise which might be dearer than equivalents provided by way of (non-Google) value comparability companies.

“What the EU Fee acknowledged was [Google is] transferring down rivals within the search outcomes. It’s inflicting customers to overpay monumental quantities of cash yearly as a result of Google isn’t displaying probably the most related outcomes and with too excessive costs after they may present higher outcomes additional up,” PriceRunner CEO, Mikael Lindahl, instructed TechCrunch.

“They’ve tried to do some modifications to the service which means it’s attainable to resell the advertisements primarily based on prime of Google… It’s nonetheless an auction-based mannequin… And when Google is aware of that they need to present outcomes from [rivals] they’ve to do that and they aren’t. So they’re positively nonetheless abusing their place since customers are nonetheless damage.”

The tech big’s search engine continues to have a massively dominant share of the market within the area — taking on 90% of marketshare in most nations within the European Financial Space and within the UK.

“Google ought to present probably the most related outcome and it must be primarily based on the conventional search algorithms,” Lindahl added. “What they can not do — what the EU Fee says is against the law — is after they manually and with algorithms manipulate the search outcomes to get the rivals additional down within the outcomes, and that is what they’re doing.”

The Fee’s 2017 order towards Google Purchasing was upheld final yr by the Common Court docket of the EU which largely dismissed Google’s attraction towards the Fee’s antitrust resolution — paving the way in which for litigation funders to really feel extra assured about opening their wallets.

PriceRunner says its authorized motion is being supported by a litigation funder known as Nivalion.

“After all this can be a David towards Goliath scenario and we needed to make it possible for we’re very well ready for a really lengthy struggle so now we have exterior financing,” stated Lindahl, including: “Nivalion is taking tens of thousands and thousands of euros of prices — for an upside after we win this. Mainly they’re as satisfied as we’re that this may work out very nicely for us.

“So we’re ready for a few years of struggle and now we have all of the assets we want.”

When pressed on its precise objections to modifications Google has made because the 2017, Lindahl additionally pointed to the Common Court docket ruling, saying: “Studying between the strains but in addition slightly concrete from the Common Court docket assertion from November final yr it’s clear that the treatments usually are not enough.

“I don’t need to remark intimately — as a result of it’ll after all be a part of this course of — nevertheless it’s very apparent to us that Google has not modified their habits and it appears to be apparent to the Common Court docket as nicely. That’s my judgement.”

“What they’ve performed is that they’ve made it attainable for extra folks to pay Google cash to be on prime,” he added in additional remarks on how Google has modified value comparability because the EU’s antitrust order. “It’s nonetheless an auction-based mannequin. So the one paying probably the most will probably be on prime on the Google outcomes — and in case you’re searching for a Samsung TV for a low value, for a very good deal, nicely it’s not possible for somebody paying probably the most for the site visitors to additionally present the bottom value.

“They’re opposites, so Google’s resolution right here doesn’t make sense. They haven’t stopped the abuse.”

Reached for touch upon PriceRunner’s lawsuit, Google despatched us this assertion — attributed to a spokesperson:

“The modifications we made to procuring advertisements again in 2017 are working efficiently, producing progress and jobs for a whole lot of comparability procuring companies who function greater than 800 web sites throughout Europe. The system is topic to intensive monitoring by the EU Fee and two units of outdoor consultants. PriceRunner selected to not use procuring advertisements on Google, so could not have seen the identical successes that others have. We sit up for defending our case in court docket.”

Requested for a response to Google’s rebuttal Lindahl added: “Google’s response at present is strictly what we anticipated, avoiding the truth that they’ve been convicted by each the European Common Court docket in November 2021 and that buyers are paying greater costs due to their service. We sit up for this struggle and the authorized course of begins now.”

We additionally requested PriceRunner whether or not it has sought to press its criticism about Google’s Purchasing treatment nonetheless not working with the Fee itself.

Lindahl stated it has had “a number of” conferences with the EU’s government — however he additionally pointed to Google’s lobbying blitz in Brussels — and urged the Fee to “end this”.

“It’s apparent that Google has a number of energy in all cases and in all markets in Europe and that they will push issues of their favor… The Fee has to wrap this up, they need to cease this abuse, as a result of in any other case they’re displaying the European customers that they tried however they will’t beat the tech giants — and that’s not acceptable.”

“It’s actually necessary that they wrap this up as a result of nobody will thank commissioner [Margrethe] Vestager for beginning this if she doesn’t cease it,” he added. “What occurs right here is we see a motion in energy, in energy — the place the actually large tech giants they don’t have to alter their fashions, they will proceed abusing the scenario as a result of they’ve reached a sure measurement and that’s simply not acceptable.

“This time it’s a couple of product comparability however subsequent time… it may be flights or insurance coverage or no matter. So if we don’t take this battle for the sake of European tech firms everybody else will probably be damage subsequent, that’s my view.”

The Fee was contacted for touch upon the lawsuit and to ask whether or not it has ongoing considerations about Google’s compliance with the Purchasing enforcement order however on the time of writing it had not responded. We’ll replace this report if we get a response.