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Google protests 'eye-catching' $2.6 billion EU fine, judge disagrees

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02/14/2020 | 03:04pm EDT
FILE PHOTO: Logo of Google is seen at VivaTech fair in Paris

Google on Friday attacked what it called an eye-catching 2.4 billion euro ($2.6 billion) EU antitrust fine, prompting a judge to ask how a rich company can miss a relatively paltry amount.

The sparring underlines the battle ahead for the world?s most popular internet search engine, with two other challenges against EU antitrust enforcers to be heard in the coming months.

The Alphabet unit argued that additional amounts tacked on to the fine imposed by the European Commission in 2017 to deter anti-competitive behavior known as a deterrent multiplier and another multiplier factor was excessive and unwarranted.

Google's challenge came on the final day of a three-day hearing at the General Court, Europe's second-highest, as it attempts to overturn the first of a trio of EU antitrust penalties totaling 8.25 billion euros.

"2.4 billion euros is an eye-catching amount, it might attract the headlines but it is not justified by the actual facts of this case," Christopher Thomas, Google's lawyer, told judges.

He said there should not have been a fine in the first place as existing case law showed that Google's behavior was not anti-competitive while its market shares and the 13 countries where the infringement was committed did not justify the size of the multiplier.

The Commission used a gravity multiplier between 5% and 20% to Google's 2016 turnover in the 13 EU countries, higher than the 5% levied on Intel in 2009. EU laws allow for regulators to apply a multiplier of up to 30%.

EU antitrust regulators should also have taken into account the company's efforts to settle the case with concessions before they changed tack in 2015 and sanctioned Google, Thomas said.

"Credit should be given for Google's good faith attempts to find a solution to the Commission's concerns with its three commitments offers and the almost 9 months engineering effort spent building that solution provisionally agreed with the Commission," he said.

Irish judge Colm Mac Eochaidh, one of the panel of five judges hearing the case and who had a day earlier said the company clearly committed an infraction, asked whether the size of the fine was as eye-catching as Google claimed.

"You are one of the richest companies in the world," he said, citing the example of someone with 120 euros and fined 2.4 euros for littering.

"Would you miss the 2.4 euros?"

Mac Eochaidh also wondered about the power of the court to increase or revise fines, a thought which Google tried to squash by saying the Commission had not asked judges to do so.

The court in 2007 broke new ground by jacking up a cartel fine imposed by the Commission for the first time, leaving Germany?s BASF AG <BASF.DE > with a higher penalty.

EU enforcers merely stuck to the rules when calculating the fine, Commission lawyer Anthony Dawes said.

"The Commission scrupulously followed the methodology set out in the guidelines. Google's conduct constituted a well established form of abuse," he said.

A ruling is expected next year and can be appealed to the Court of Justice, Europe's highest.

The case is T-612/17 Google and Alphabet v Commission.

By Foo Yun Chee

Stocks mentioned in the article
ChangeLast1st jan.
ALPHABET INC. -4.43% 1106.31 Delayed Quote.-13.25%
BASF SE -4.99% 40.99 Delayed Quote.-35.94%
BE HEARD GROUP PLC 0.00% 0.2 Delayed Quote.-61.90%
INTEL CORPORATION -2.48% 52.67 Delayed Quote.-9.57%
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