The Court of Justice of the European Union has dismissed Google and Alphabet’s appeal in Case C-738/22 P | Google and Alphabet v Commission, confirming the €4,125 billion fine imposed in the long-running Android competition case.
Background
The case arose in the context of the European Commission’s 2018 decision finding that Google had abused a dominant position by imposing restrictions on manufacturers of Android mobile devices and mobile network operators. In broad terms, the Commission objected to arrangements requiring the promotion of Google Search and Chrome on Android devices, including through pre-installation and licensing conditions linked to access to Google’s app ecosystem. The Commission considered that those practices protected and reinforced Google’s position in general search services at a time when mobile internet use was becoming increasingly important.
The Commission initially imposed a fine of €4,343 billion. On appeal, the General Court largely upheld the finding of a single and continuous infringement, although it annulled part of the decision concerning certain revenue share agreements and recalculated the fine at €4,125 billion. Google and Alphabet appealed to the Court of Justice, which has now dismissed that appeal and confirmed the penalty as revised by the General Court.
The judgment
First, the Court confirmed that the assessment of potentially abusive conduct in digital markets must be grounded in the relevant economic context. The General Court had been entitled to consider the Android arrangements in the round, including related revenue share agreements, when assessing the effects of Google’s pre-installation conditions. Importantly, the Court did not require a systematic counterfactual analysis to establish an abuse of dominance.
Second, the Court endorsed the General Court’s finding that pre-installation can create a significant status quo bias in favour of the apps and services presented to users by default. Google and Alphabet had not shown that user preferences or the alleged quality of their services alone explained the observed user behaviour.
Third, the Court rejected the suggestion that the Commission was required in all cases to prove that the conduct was capable of foreclosing an as-efficient competitor. The particular features of the digital markets at issue meant that the General Court could conclude that the practices were liable to restrict competition and reinforce barriers to entry without applying that test as a mandatory condition.
Fourth, the Court upheld the assessment of the anti-fragmentation agreements. Those agreements were found capable of limiting commercial opportunities for non-compatible Android versions and strengthening Google’s dominant position. The Court also accepted that no separate counterfactual analysis was required where the anticompetitive effects had already been sufficiently established.
Finally, the Court agreed that the General Court was entitled to reject Google’s objective justifications and to maintain the classification of the conduct as a single and continuous infringement, notwithstanding the partial annulment relating to certain revenue share agreements. The remaining practices were still regarded as forming part of the same anti-competitive strategy.
