Google and Alphabet V Commission
Google and Alphabet V Commission
Google and Alphabet V Commission
Oral submissions were made not only by Google and the Commission, but also several
interveners who were present at the hearing, including the Bureau européen des unions de
consommateurs (BEUC), Infederation Ltd, the EFTA Surveillance Authority, Kelkoo, Verband
Deutscher Zeitschriftenverleger eV, Visual Meta GmbH, Bundesverband Deutscher
Zeitungsverleger eV, the Federal Republic of Germany, and Twenga.
Google is best known for having a search engine that displays search results for internet users –
it produces results either based on general criteria, or by using a specialised algorithm which
does not require any user involvement.
However, the company also has a number of specialised search services, including for shopping.
It is this comparison shopping service that is at issue in this competition law dispute, for having
favoured Google’s comparison shopping services (on its specialised search services) over that of
its competitors (shown in the general search results).
The Decision concerns two specialised services provided by Google in particular: ‘Product
Universals’ and ‘Shopping Units’. For a brief background of what these tools are, they developed
from ‘Product OneBox’. The latter evolved from using specific criteria in a database, refining
that database, grouping comparison shopping results together, further refining the selection
criteria and catalogue, and enriching the content by adding images. Another mechanism,
‘Universal Search’ made it possible to rank Product OneBoxes against general search results, so
if specialised search results were more relevant than general search results, they were placed
higher up on the results list. Google also had richer content than those of text-only ads, later
showing such results with larger images and with prices.
The Commission found that Google’s inclusion of links to its own specialised (shopping) search
services through its general search results pages (compared to those of competing specialised
search services) was an infringement of EU competition rules (Article 102 TFEU and Article 54
of the EEA Agreement).
First plea: Google’s Product Universals were not favoured over competitors
Google argued that the Commission Decision erred in finding that Google favoured its
comparison shopping service, by displaying Product Universals, over that of competitor
comparison shopping services. In fact, they had been developed to improve the quality of its
services rather than with the aim of redirecting traffic to its services. The Commission, in
response, did not dispute that rationale of improving quality, but noted that Product Universals
were shown in an eye-catching manner, whilst simultaneously, competing comparison shopping
services could only appear through generic search results in a less eye-catching manner, and
moreover, with Google’s Panda algorithm liable to demoting them within those results.
A connected argument of Google’s was that the Decision was wrong to find that there was
favouritism without examining all the requirements for establishing discrimination – the
Commission did not, for example, consider that there were legitimate reasons for the difference
in treatment between Product Universals and generic results (therefore not leading to any
discrimination). The Commission replied that the different treatment was not the issue, but rather
the combination of subsequent practices that elevated Product Universals over products of
competitors.
In line with the above, Google alleged that the Commission infringed the legal test for objective
justifications concerning the display of Product Universals because it did not look at whether the
evidence put forward offset the alleged restrictive practices, or show how Google could have
acted in the alternative without undermining its innovations. The Commission’s response
included the defence that it was for Google, and not it, to consider alternatives, and that no
evidence was offered to consider an objective justification.
Second plea: Google’s Shopping Units were not favoured over competitors
Google made similar arguments concerning the Decision’s finding that its Shopping Units were
favoured (there being no favouritism, legitimate reasons for a difference in treatment, and a
failure by the Commission in applying the legal test for justifications), though the Report of the
Hearing should be read in full to understand the differences between the first and second pleas
given the different nature of Shopping Units.
Third plea: traffic was not diverted away from competitors, and towards Google’s
comparison shopping service
Google denied that its practices caused traffic to be diverted away from its general results pages,
to the detriment of competing comparison shopping service, and to the benefit of its own such
service. It alleged that the Commission had not proved such a decrease in traffic, and that it
should have carried out a counterfactual analysis, submitting that traffic for competing services
would not have been different if the Product Universals and Shopping Units did not exist. It also
considered that broader developments or in the industry or shifting user preferences should have
been taken into account by the Commission. The Commission replied that it was concerned
rather by a combination with other practices leading to the situation whereby competing
comparison shopping services can appear only as generic search results, without any enriched
display features, and are moreover prone to being demoted in those results by general search
adjustment algorithms such as Panda. In response to the causes for traffic, it found it unclear
whether Google believes it should be exonerated because it is not the sole cause of a decrease in
traffic.
Google tied its argument about the decrease in traffic as meaning, by exclusion, that there was no
traffic diverted to its services, and thus no increase to its own benefit, which was being
exaggerated by the Commission. The Commission’s defence was that the increase in such traffic
was at the expense of competing comparison shopping services. Google was overlooking the fact
that that increase was the result of two practices combined.
Fourth plea: the Commission’s findings that there were anticompetitive effects were
speculative
Google argued that the role of Google’s strongest competitors in comparison shopping services,
namely retail platforms such as Amazon, was not taken into account and no explanation was
given as to the alleged effects on prices and innovation. It submitted that the Decision was based
on pure speculation about potential effects and did not examine the actual situation and
development of the markets, and that there was no evidence to show there were anticompetitive
effects. The Commission’s counter argument was that it is only required to show that the conduct
is capable of shutting competitors out – not to prove that effect has actually occurred. It also
noted that Google had not clearly objected to the relevant product market on which the Decision
based its findings, which is limited to comparison shopping services – and not including retail
platforms (such as Amazon).
Another argument made by Google was that the Commission took account only of the traffic
they received from Google’s general results pages. The Commission contended that it had
considered all sources of traffic of competing comparison shopping websites, and that traffic
from Google’s generic results account for around 50% of total traffic received by those
comparison services, that led it to find that Google was capable of foreclosing competition, or at
least distorting it significantly.
On November 10, 2021, the European General Court (Court) issued its judgment in Case T-
612/17 Google and Alphabet v Commission (Google Shopping).
The Court dismissed almost in its entirety the action brought by Google and Alphabet against the
decision by the European Commission (Commission) of June 27, 2017, which found that Google
had abused its dominant market position by favoring its own comparison shopping service (CSS)
on its general results pages while demoting the results from competing CSSs. The Court also
upheld the fine of €2.42 billion imposed on Google by the Commission. The judgment can be
appealed to the Court of Justice of the European Union (CJEU).
Perhaps the most important aspect of this judgment is that the Court has now officially
recognized that self-preferencing practices can constitute an abuse of dominance and has
clarified that the legality of such practices does not have to be assessed in light of the traditional
test relating to essential facilities or abusive refusal to provide access. Instead, self-preferencing
can constitute an abuse on its own terms, arguably broadening the scope of Article 102 Treaty on
the Functioning of the European Union (TFEU) and making it easier for the Commission to
reach similar findings in the future.
Some of the key takeaways from this important and complex judgment are outlined below.
The Court determined that self-preferencing practices (described by the Court as “active
favouring” and “active exclusionary practices”) could constitute an abuse of dominance, in
practice confirming a new category of behavior that constitutes an abuse within the meaning of
Article 102 TFEU.
The Court acknowledged some divergence in approach among member states in relation to self-
preferencing practices, including that certain national courts have not recognized self-
preferencing as an abuse of dominance. However, the Court made it clear that this does not
preclude the Commission from reaching a different conclusion. It is for the national courts and
authorities to follow the jurisprudence of the EU courts, not vice versa.
The Court determined that a finding of abusive self-preferencing requires a robust case-by-case
effects analysis, taking into account “the particular circumstances of the practices in question.”
In other words, it is clear from the judgment that the context within which Google’s self-
preferencing occurs was critical to the finding of abuse. It is in light of such specific
circumstances that the Court referred to the principle of network neutrality (i.e., a general
obligation of equal treatment on internet access providers), concluding that the principle “cannot
be disregarded when analyzing the practices of an operator like Google,” which has the
undisputed ultradominant position in a downstream market and resulting special responsibility
not to allow its behavior to impair competition.
While the Court noted that Google’s general search service is akin to an essential facility, it
concluded that Google’s conduct does not have to be assessed in light of traditional essential
facilities and refusal to provide access case law (e.g., Bronner), which turns on whether access to
a dominant provider’s products or services is “indispensable” to a competitor’s offering, such
that a refusal to provide access will effectively eliminate competition. This is because in the
Court’s view, Google’s conduct does notsimply amount to a refusal to provide access. Instead, it
involves “an unjustified difference in treatment” in the form of Google favoring its own CSS.
Such self-preferencing conduct does not necessarily need to meet the conditions of
indispensability and elimination of all competition to be found abusive. As such, the Court drew
a distinction between two categories of cases:
a. “passive” (and explicit) refusal of access — for instance, where a dominant firm refuses
access to an infrastructure that it deploys for its own needs, but it does not proactively engage in
other strategies to disadvantage its rivals
In relation to the first category of cases (i.e., passive refusals of access), the Court upheld
strict Bronner indispensability and elimination of all competition criteria, recognizing that
forcing a firm to conclude a contract with a third party, such as a competitor, can interfere with
that firm’s freedom of contract and right to property and should therefore be confined only to
exceptional circumstances.
In relation to the second category of cases (i.e., self-preferencing practices), the Court generally
found that these cases could merit a more relaxed legal test that omits the indispensability
criterion. While the Court did not set out a clear effects analysis in relation to such cases, it
seems that such practices would be prohibited only when certain criteria are met. In particular:
• It is evident that only those with material market power should be subject to scrutiny in relation
to potentially abusive self-preferencing practices. Indeed, the Court repeatedly refers to Google’s
“superdominant” and “ultra-dominant” position on the market and “(almost worldwide) quasi-
monopoly” which, in the Court’s view, has placed Google “under a stronger obligation not to
allow its behaviour to impair genuine, undistorted competition.”
• Similarly, the Court repeatedly emphasized the importance of Google’s infrastructure (i.e.,
general search) for third parties to effectively compete in the market. Indeed, the judgment
explicitly states that Google’s general search traffic is “akin to […] an essential facility”: It
accounts for “a large proportion of the activity of [rival] comparison shopping services” and “no
[other] viable alternative” exists.
The Court also emphasized a “certain form of abnormality” that was “not necessarily rational” in
Google favoring its own specialized results given “the rationale and value of a general search
engine lie in its capacity to be open to results from external (third party) sources and to display
these multiple and diverse sources on its general results pages.”
• The Court made it clear that self-preferencing practices can be prohibited only when they have,
or are likely to have, anticompetitive effects. The Court further emphasized that “favouring and
its effects [must be] properly established” for the self-preferencing conduct to be found abusive.
Indeed, the Court refers to “material effects” and “material consequences” when describing
Google’s practices, and the Commission did carry out an in-depth analysis of the actual
anticompetitive effects of Google’s conduct, including in its decision a number of detailed charts
illustrating a correlation between Google’s conduct and rapid drops in visibility and traffic
received by its competitors. The Court’s comments clearly indicate that self-preferencing
practices should be subject to a robust effects analysis. This would be in line with the comments
made by judges at the hearing last year, who explicitly mentioned applying some kind of
“relaxed” (but still sufficiently restrictive) Bronner-like test to these types of self-preferencing
practices. It is significant that the Commission went beyond an examination of whether Google’s
conduct was merely capable of having anticompetitive effects. Instead, it considered in detail the
features of the relevant market and the actual impact of Google’s conduct therein.
We hope that if the case is appealed, the CJEU will provide more clarity as to which factors
should be taken into account and how the analysis of effects should be conducted in practice.
The Court reiterated that with respect to objective justifications for anticompetitive behavior, the
burden of proof rests on the firm relying on such justifications to “convincingly” put them
forward, particularly where the firm alone is aware of an objective justification or is naturally
better placed than the Commission to disclose its existence and demonstrate its relevance. In this
case, the Court found that Google failed to show that its conduct was objectively necessary or
that it genuinely improved Google’s service to the benefit of users.
As regards efficiency gains, a firm should show that (a) any efficiency gains counteract any
likely negative effects on competition and consumer welfare; (b) those gains have been, or are
likely to be, brought about as a result of that conduct; (c) such conduct is necessary for the
achievement of those gains in efficiency; and (d) such conduct does not eliminate effective
competition by removing all or most existing sources of actual or potential competition. In
consequence, a firm has to do more than put forward vague, general, and theoretical arguments
or rely exclusively on its own commercial interests. In practice, such efficiencies may be difficult
for firms to prove.
4. Market definition
The Court confirmed the Commission’s assessment that merchant platforms are not part of the
market for CSSs and therefore endorsed the Commission’s view that there is little competitive
pressure on Google from merchant platforms.
The Court reasoned that (i) CSSs do not sell products themselves but inform consumers about
offers from online sellers, whereas consumers can purchase products directly from merchant
platforms; and (ii) merchant platforms offer only a limited selection of goods, namely those of
the platform itself and those of the merchants contracting with the platform. CSSs, on the other
hand, offer products from the entire market. The Court recognized that sellers can and do offer
their products on both CSS and merchant platforms. However, they do so on a complementary
basis and not because they view each platform as interchangeable. The judgment illustrates that
where platforms have similar uses, they can be argued to be complementary uses in order to
separate services into different markets.
As regards the market for general search services, the Court considered that the Commission did
not establish that Google’s conduct had had any (even potential) anticompetitive effects and
therefore annulled the finding of an infringement in respect of that market alone.
5. Fine
The Court made its own assessment of the facts and concluded (a) first, that the annulment of the
part of the Commission’s decision regarding the market for general search services has no effect
on the amount of the fine, as the Commission did not take the value of sales on that market into
consideration in order to determine the basic amount of the fine; and (b) second, that the
infringement was of a particularly serious nature and was adopted intentionally, not negligently.
As such, the Court concluded that the amount of the fine imposed on Google must remain the
same.
A key point of contention was the alleged intentional nature of Google’s infringement. Google
argued that given the novel nature of the Commission’s analysis (in particular, the Commission
stated its decision was “a precedent which establish[ed] the framework for the assessment of the
legality of this type of conduct”), Google could not be accused of either intentionally or
negligently abusing its dominant position. Nonetheless, the Court found that in line with
established case law, where an infringing firm could not have been unaware of the
anticompetitive nature of its behavior, it acts intentionally. Google was aware of its dominant
position in the market for general search services and must have known that its conduct
undermined equality of opportunity among the various economic operators in the market, such
that its conduct was capable of foreclosing its competitors or otherwise restricting competition.
It was inevitable that the Google Shopping judgment would require the General Court to engage with an illustrious
principle of the case law: Article 102 TFEU is only concerned with the exclusion of rivals that are as efficient as the
dominant firm.
As the Court put it in para 22 of Post Danmark I ‘not every exclusionary effect is necessarily detrimental to
competition […]. Competition on the merits may, by definition, lead to the departure from the market or the
marginalisation of competitors that are less efficient and so less attractive to consumers from the point of view of,
among other things, price, choice, quality or innovation‘.
The corollary to this principle is that only anticompetitive effects that are ‘attributable‘ to the dominant firm’s
conduct can trigger the application of Article 102 TFEU. Post Danmark II made an explicit reference to
attributability (para 47). Crucially, this point is acknowledged in para 441 of Google Shopping (‘in order to find that
Google had abused its dominant position, the Commission had to demonstrate the – at least potential – effects
attributable to the impugned conduct of restricting or eliminating competition‘).
Showing that the effects are attributable to the dominant firm’s behaviour (that is, establishing a causal link between
the conduct and its impact) demands, by definition, identifying a counterfactual. There is no way around it (I have
come to understand that this idea is controversial in some quarters; it is a topic for another post, but I will definitely
address it).
The Google Shopping judgment reveals that the principle tends to be conflated with related matters. Two conflations
deserve to be discussed:
The principle is sometimes interpreted as meaning that the Commision (or any other authority or claimant)
needs to show that specific rivals are as efficient as the dominant firm. I do not believe that interpretation is
correct, and I struggle to find support for it in the case law.
The principle is occasionally used as synonymous with the ‘as efficient competitor’ test. They are different,
and the former should not be reduced to the latter.
The principle in practice: what needs to be proved?
In para 514 of the judgment, the General Court explains that one of the interveners argued that the Commission had
not established the anticompetitive effects of the practice as it had ‘failed to show that comparison shopping
services competing with Google that had experienced difficulties were as efficient as Google or that they had
exerted significant competitive pressure on prices or innovation‘.
The General Court rejects the argument as described above. There seems to be no basis for it in the case law. What
cases like Post Danmark I and II demand is that a causal link be established between the practice and the effects. If
the effects are not attributable to the dominant firm, but to other factors, then there is no abuse (think by analogy of
the ‘failing firm defence’ in merger control).
Put differently: the implementation of the principle demands comparing the conditions of competition with and
without the practice. It does not demand, however, establishing the relative relative efficiency of rivals in a reality
that has already been ‘contaminated’ by the practice. It would not be possible to establish a causal link in such
circumstances.
Suppose that a practice denies rivals a minimum efficient scale. It should not be possible for the dominant firm to
then claim that rivals are less efficient and therefore that the practice is not abusive. If such an argument were
accepted, then effects that are attributable to the dominant firm’s behaviour would fall outside the scope of Article
102 TFEU. The General Court makes a point along similar lines in para 540.
Instead, the question should rather be whether rivals being denied a minimum efficient scale is attributable to the
behaviour of the dominant firm or to other factors. Simply put, the appropriate benchmark should be the world in the
absence of the practice.
The wording of the judgment, which seemingly conflates principle and test, can be interpreted as meaning that only
pricing abuses are concerned with as efficient competitors. According to this interpretation, the principle would not
apply to practices such as tying or exclusive dealing. Which takes me to the last point.
Is the principle only relevant for pricing abuses? How could it be so?
According to a current of opinion, the principle laid down in Post Danmark I would indeed only be relevant in
relation to pricing abuses. I struggle with this interpretation of the case law, but insofar as it has been debated, it is
worth discussing.
There are several reasons why the principle laid down in Post Danmark I is applicable across the board. To begin
with, the Court (both in Post Danmark I and Intel) did not confine it to pricing abuses. It was a general
pronouncement. What is more, it made an explicit reference to other parameters of competition, namely ‘choice,
quality or innovation‘.
The most powerful reason, in any event, is that confining the principle to pricing abuses would lead to outcomes that
seem difficult to defend from an intellectual standpoint. Taken to its logical consequences, such an interpretation of
Article 102 TFEU would mean that it is necessary to establish a causal link between practice and effects in relation
to rebates and mixed bundling, but not in relation to exclusive dealing and tying.
If this interpretation of the case law were accepted, the two sets of practices would be subject to different analytical
framework for a purely arbitrary reason (the fact that one set of practices relies on pricing mechanisms) even though
they are interchangeable (and have the same object and effect).
The first threshold issue of law the GC examines in detail is under what
conditions leveraging is anticompetitive. This part of the judgment
(paras. 139-198) includes an interesting discussion of “competition on
the merits,” a concept which has always been a bit nebulous under EU
law.
By way of background, Google had claimed that its practices were quality
improvements that fell within the scope of “competition on the merits”
and could not be treated as abusive.
The GC did not stop there, however, even though in para. 175 it seems to
consider that these three circumstances sufficed to characterise Google’s
conduct as falling outside the scope of competition on the merits. The GC
made three further points to support the conclusion that Google’s
conduct deviated from normal competition:
Incentives of a search engine: Google’s self-preferencing
conduct seemed to involve a certain form of “abnormality,” in that
a search engine is in principle “open” to results from external sources
(in fact this is how it generates value), which distinguishes it from
other infrastructures consisting of tangible or intangible assets. For a
search engine, limiting the scope of its results to its own “is not
necessarily rational, save in a situation, as in the present case,
where the dominance and barriers to entry are such that no market
entry within a sufficiently short period of time is possible in
response to that limitation of internet users’ choice” (para. 178). The
GC seems to consider that, in the absence of market power, a search
engine would not have the incentive to promote its own specialised
results over those of rivals.
After recalling the case law on essential facilities under EU law and the
rationale for the indispensability criterion laid down in Bronner, the
General Court notes that what is at issue in the present case are “the
conditions of the supply by Google of its general search service by
means of access to general results pages for competing comparison-
shopping services” (para. 219). The contested decision does seek to
provide rival CSSs with access to Google’s SERP and ensure equal
treatment with Google’s CSS (para. 222). Next, the GC observes that
Google’s SERP has characteristics akin to those of an “essential facility”
(para. 224), and in practice the Commission found Google’s traffic to be
indispensable for competing CSSs (paras. 225-227).
Most importantly, the GC considers that the practices at issue should be
distinguished from the refusal to supply in Bronner (para. 229). Not
every issue of access means that the Bronner conditions have to apply
(para. 230). The GC gave the following reasons why the Bronner test
does not apply in the present case:
A refusal to supply implies that (i) there is an express refusal to an
access request (to be contrasted to an implicit refusal); and (ii) the
impugned conduct triggering the exclusionary effects lies
“principally in the refusal as such, and not in an extrinsic practice
such as, in particular, another form of leveraging abuse” (para.
232).
On anticompetitive effects
Applying this test to the present case, the GC considered that the
Commission had established such a causal link, in that first, the
Commission (i) had shown there was a decrease in overall traffic to rival
CSSs; and (ii) there was information derived from rival CSSs attributing
such decrease to Google’s adjustment algorithms, and second, Google
failed to provide evidence to the contrary (para. 394).
CCIA (intervener for Google) had argued that the Commission failed to
demonstrate that rival CSSs were as efficient as Google, thus falling foul
of Intel. The GC, in a rather aggressive part of the judgment, states that
the use of an as efficient competitor (“AEC”) test is warranted in the case
of pricing practices, but not in non-pricing practices (para. 538). The use
of such a test, which involves comparing prices and costs, did not
therefore make sense in the present case, since the competition issue
identified was not one of pricing (para. 539).
While the above has been well known ever since Post Danmark II(recall
the dictum that the AEC test should be regarded as “one tool amongst
others”), the GC went even further to state that an AEC test could not in
itself determine whether Google’s conduct was anticompetitive. The
reason is that an AEC test may produce objective results only if
competition is not in fact distorted by anticompetitive conduct (para.
540). It was thus “impossible to know” whether Google “was ‘more
efficient’ that the other comparison-shopping services” when its
practices were capable of distorting competition (para. 541).
The GC held that the contested decision does not take issue with the two-
sided business model of Google, in that the Shopping Units were part of
Google’s CSS (para. 314). In any event, the GC unequivocally stated that
“[i]f the funding model of an undertaking leads it, as in the present
case, to take part in an abuse of a dominant position, there is nothing to
preclude that funding model being caught by the prohibition under
Article 102 TFEU. It is, moreover, a feature of many abuses of a
dominant position that the aim is to improve an undertaking’s sources
of funding” (para. 314).
Conclusion
To understand why the General Court’s judgment now withdraws any basis for the
method that Google ended up choosing to implement the remedy (“Compliance
Mechanism”), we only need to look at Google’s premise for its current mechanism.
Google’s Compliance Mechanism rests upon the premise that the remedy imposed is
about a denial of access to Shopping Units, a box with a group of specialised product
results displayed within Google’s general results pages. Google explained this premise
to the Court as follows:
“when Google shows a Shopping Unit, Google must give aggregators the same
access to the Shopping Unit as it gives the Google CSS, using the same
mechanisms (processes and methods) to allocate access.”[6] (emphasis added)
This premise regarding the remedy, in turn, rested upon Google’s particular
interpretation of the abuse identified in the Commission Decision. Google argued before
the Court that the abuse consisted in the fact that Google favoured its standalone
comparison website, called “Google Shopping,” by displaying and positioning groupings
of specialised search results, first referred to as “Product Universals” and later
“Shopping Units,” within general search results pages because they included links to the
standalone Google Shopping website. Hence, Google saw the abuse in that “the
display of Shopping Units is a means of favouring the Google Shopping 'website.'”[7]
This standalone website, Google argued, was its entire CSS and Shopping Units, not a
part thereof.
Based upon its reading of the abuse and corresponding remedy, Google argued that so
long as it grants competing CSSs equal access to Shopping Units, the preferential
positioning and display of such units no longer constituted a means for favouring the
standalone Google Shopping website (as Google’s CSS) and hence the abuse would
have ceased.
“The remedy chosen by Google is therefore framed as an ‘access remedy’ in that,
through the auction mechanism, Google is giving rival comparison shopping
services access to the Shopping Unit.”[8] (emphasis added)
“raised a concern about access – as between Google Shopping and rival (CSS) – to an
attractive design on Google’s results pages known as 'Shopping Units,' if CSSs have
equal access to Shopping Units, the alleged unequal treatment found in the
Decision falls away.”[9] (emphasis added)
To enable such access Google then allowed competing CSSs to (i) upload product offer
feeds[10] of their merchant customers to Google’s product index alongside merchants
who uploaded such feeds directly or via Google Shopping, and to (ii) bid on the product
offers from the feed, so that Google, in case it chooses to display a Shopping Unit in
return to a particular search query, may include such product offers at any place within
such Shopping Unit, combined with any other offers and content from its own product
index that Google finds suitable based upon its own product search algorithms.
Google has applied very similar mechanisms to several other specialised search
services as well. So now providers of hotel and local or vacation rental search services,
for example, “may” upload their inventory to a Google-owned product index so that
Google can use its own specialised search algorithms to fill any similar groupings of
specialised results (referred to as a “Commercial Unit”) Google intends to display in
return of any search query whenever it concludes that the Unit and products it selects to
fill it are relevant for a search query.
A. Google now needs to grant “equal access to general results pages,” not just to
parts thereof
To start with, the Court clarified the issue of the case. The Commission focused on the
favouring of a Google service within general search results pages. Google, in turn,
argued that the case concerns access to Google’s “own specialised results (Product
Universals and Shopping Units).”[12] The Court combined both narratives into a more
nuanced narrative that is about “access to Google’s general search results page”:
“[C]ontrary to the Commission’s contention, what is at issue in the present case are
the conditions of the supply by Google of its general search service by means
of access to general results pages for competing comparison shopping services,
such access being [..] presented as ‘important’ for generating traffic on comparison
shopping services’ websites and therefore ultimately revenue and [..] ‘not effectively
replaceable.’”[13] (emphasis added)
Or shorter:
“what is at issue in the present case, albeit only indirectly, are the conditions of
Google’s supply of its general search service thorough access by comparison
shopping services to the general results pages.”[14] (emphasis added)
As is apparent from the judgment, the Court did not contradict the Commission with
respect to this point in order to question or weaken its case, but to strengthen it. The
question of whether this case concerns any favouring or any access was immaterial to
the legal test to be applied. The judgment clarifies that the strict Bronner[15] criteria are
not applicable, irrespective of whether the applicable conduct falls under the label of
“access.” That is because, in any event, the conduct does not concern a refusal to grant
any access but the conditions for such access, for which, at the latest since the Slovak
Telecom judgment of March 2021,[16] Bronner plays no role.[17] While referring to
“access” did not alter the legal standard, it allowed the Court to spell out more clearly
what is at stake and what matters.
In particular, the Court’s decision helped to clarify the actual “access object” to which
particular “access seekers” wish to gain non-discriminatory access, and to distinguish
the access object from Google’s own “service” and the “tool” used to favour this service
within the access object:
“Google is accused of failing to make a similar type of positioning and display available
to competing comparison shopping services as is available to its own comparison
service, and therefore of failing to ensure equal treatment of its own comparison service
and the services of its competitors.”[19]
This means: If, within Google’s general search results pages (= access object), Google
makes certain interfaces, such as boxes, available for the provision or display (= tool) of
its own CSS (= the service), it should equally make such interfaces available to
competing CSSs.
“The infrastructure at issue, [is] namely Google’s general results pages.”[20] Such
pages consist of “all types of results.”[21]
Moreover:
“Google’s general search results page has characteristics akin to those of an essential
facility.”[22]
As a result, and this may well be one of the most important clarifications in the Court’s
judgment, the Court stressed:
“The contested decision thus envisages equal access by Google’s [CSS] and
competing [CSSs] to Google’s general results pages, irrespective of the type of
result concerned (generic results, Product Universals or Shopping Units),
and does therefore seek to provide competing [CSSs] with access to Google’s general
results pages and ensure that their positioning and display within those pages are as
visible as those of Google’s [CSS], even if it does not rule out the possibility that, in
order to implement the remedy required by the Commission, Google will cease to
display and position its own [CSS] more favourably than competing [CSSs] on its
general results pages.”[23] (emphasis added)
Note the clear distinction between “Google’s general results pages” (= access object),
“comparison shopping services” (= access seekers), “Product Universals or Shopping
Units” (= sub-category of the results page used as a service for comparing products)
and the “positioning and display” (= tool to discriminate between access seekers within
the access object). This distinction is consistently drawn, for instance, in recital 369:
“[t]he conduct of Google that is challenged in the contested decision consists in the
combination of two practices: first, having displayed its comparison shopping service on
its general results pages in a prominent and eye-catching manner in dedicated boxes,
without that comparison service being subject to the adjustment algorithms used for
general searches, and, secondly, at the same time having displayed competing
comparison shopping services on those pages only in the form of general search
results (blue links) that tend to be given a low ranking as a result of the application of
those adjustment algorithms. It must also be pointed out that Google’s comparison
shopping service, like Google’s other services, never appears as a general search
result.”[24]
Note the clear distinction between a “comparison shopping service” (= access seeker)
that is displayed either, as in case of Google, in prominently displayed “dedicated
boxes” (= Shopping Units as the interface) or, as in case of rival CSSs, only in the form
of general search results (= blue links as interface) within Google’s “general results
pages” (= access object).
Compare that with Google’s (mis)representation that the Commission Decision “raised
a concern about unequal access – as between Google Shopping and rival comparison
shopping services (CSSs) – to an attractive design on Google’s results pages known as
'Shopping Units'.”[25] Thus, in Google’s reasoning, the Google Shopping standalone
website as well as rival CSSs were the access seekers trying to get into Google’s
Shopping Units as access objects, and Google’s “tool” to discriminate against them was
to reserve ads in the Unit to itself. This is, of course, at odds with the Court’s recognition
that competing CSSs had neither requested nor wished to be non-discriminatory
granted access to Shopping Units.[26] They wanted to get rid of them (as a Google
CSS within general search) or be equally entitled to display their own boxes, which is a
matter of equal access to the general results page.
This binding interpretation of the Decision withdraws any basis for this reasoning and
thus the entire Google Compliance Mechanism.
The Court confirmed that the “object” of the favouring abuse and the corresponding
equal-treatment remedy imposed is not the Shopping Unit, as assumed by Google (see
above), but the general search results page. It is that page, including all its elements, on
which Google has to grant non-discriminatory access conditions. It is, in turn, entirely
irrelevant which mechanisms Google implements to determine what kind and whose
results appear in which way within Shopping Units. It is equally irrelevant if such
mechanism has any effects and how many of the ads have now been placed there by
any rival CSS. The case is not about access to Shopping Units or any other type of
search results. What matters is that Shopping Units, which are fed by Google’s
underlying CSS technology, compare products and prices, outside general search, and
may therefore not be positioned and displayed in dedicated boxes within Google’s
general search results pages unless the display of equivalent boxes is also made
available to competing CSS to ensure equal treatment within Google’s general results
pages.
B. Commercial Units within general results pages are not a “tool” to favour a
separate website, they are the favoured specialised Google service
The clear distinction between access object (general results pages), access seeking
services (CSSs), and tools for favouring (positioning and display) also allowed the Court
to easily expose Google’s misrepresentation of the Commission Decision when stating
that Shopping Units were merely a tool to favour a standalone website, which alone
would constitute Google’s CSS:
“As a preliminary point, it must be noted that Google’s arguments are based on the
incorrect premise that the Commission’s complaint is that Google favours its own
comparison shopping service, understood to mean the standalone
website corresponding to the specialised Google Shopping page, through the more
favourable display and positioning of Shopping Units.”[27] (emphasis added)
“Google’s comparison shopping service has taken several forms, that is to say, a
specialised page, most recently called Google Shopping, grouped product results,
which evolved into the Product Universal, and product ads, which evolved into
the Shopping Unit.”[29] (emphasis added)
“Contrary to what is suggested by Google, the conduct at issue in the present case
is not confined to the more favourable treatment of the specialised Google Shopping
page by the favourable positioning and display of Shopping Units [..]. At issue here is
the more favourable treatment of Google’s comparison shopping service as a
whole, which includes Shopping Units.”[30] (emphasis added)
Consequently, throughout the judgment the Court clearly distinguished between
“Google Shopping”, defined (only) as the standalone website outside of Google’s
general results page,[31] and “Shopping Units,” defined as all groups of ads from
several advertisers, together with images and prices that appear on Google’s general
results pages.[32] Based on this distinction the Court then explained that “Shopping
Units and Google Shopping” constitute “one and the same comparison shopping
service.”[33] Accordingly, whenever the judgment referred to any favouring of a Google
CSS within general results pages, it meant both: the preferential positioning or display
of a Shopping Units (vis-á-vis CSSs that obtain no equivalent box), and the favouring of
a link leading to a Google Shopping website.
In particular, in recitals 312 and 329 to 340 the Court went to great length in clarifying
that the provision of Shopping Units are not a “tool” to favour a separate service, but
that they constitute a CSS itself, operated by Google:
“Shopping Units display results from Google’s comparison shopping service and are in
competition with competing comparison shopping services. It is, in that respect,
immaterial that sellers must pay an advertising fee to place products in the Shopping
Units, since, for internet users, Google’s specialised search service offers the same
comparison shopping service free of charge as that of competing [CSSs]. Google does
not therefore show how the comparison shopping service offered to internet users by
the Shopping Units is intrinsically different from that offered by other [CSSs]. On the
contrary, it appears that both are designed to compare products on the internet and
that, they are substitutable from the point of view of internet users.”[34]
Note that the Court explicitly referred to Shopping Units as “Google’s specialised search
service,” a service that “substitutes” competing CSSs from the relevant point of view of
internet users. The design of Shopping Units and its perception by internet users has
not changed. If Shopping Units constituted a CSS that substitutes other CSSs during
the infringement, they still do so today, irrespective of how Google fills those boxes with
content.
To underpin this point, in recitals 329 to 340 the Court explained that even those
Shopping Units constitute a CSS that are not “capable of achieving a level of precision
that allows different offers of the same product or model to be shown, as Google’s
specialised web page did.” The Court rightly pointed out that:
“[a] comparison shopping service can also show offers of several products that may
match the internet user’s query, as in the case of Product Universals and Shopping
Units. Everything depends both on the parameters of the [CSS] and on the precision of
the internet user’s initial search query.”[35]
Here again the Court naturally referred to Shopping Units as a CSS. It clarified that
Google can adjust the design (e.g., product carousel or single product box) and the
content (choice of products, or merchant or additional information) of each Shopping
Unit to the specificity of the search query entered. It is Google alone that provides the
comparison service – not the companies that Google ultimately selects to fill its
compiled boxes.
Based upon this technical consideration, the Court concluded that both:
“grouped product results, notably Product Universals, and product ads, notably
Shopping Units, must be considered to form part of the comparison shopping service
which Google offered to internet users.”[36]
In other words, irrespective of the number of bundled results, and whether they are
unpaid or paid, as soon as they are provided to allow a user to compare products and
prices of several merchants, directly within general search results pages, their provision
may form a specialised search service, operating on a market separate from general
search.
The only argument that Google could ever bring up[37] as to why the Commission
Decision did not clearly say that providing Shopping Units forms part of a Google CSS
were two recitals in the Decision, according to which “the Commission’s case is not that
the Product Universal” (recital 408) or “the Shopping Universal is in itself a [CSS]”
(recital 423). However, the Court also annulled this last argument:
“It must be stated that certain formulations in the contested decision, such as those in
recitals 408 and 423, can, viewed in isolation and at first sight, appear ambiguous.
However, these formulations do not affect the Commission’s general analysis,
according to which Google’s [CSS] was available in different forms. [..] In this regard, it
must be noted that [..] in six EEA countries, during a certain period, 'Google Shopping
existed only in the form of the Shopping Unit without an associated standalone
website.'”[38]
In other words: if the isolated display of Shopping Units (without any corresponding
standalone comparison site) in certain countries constituted an abuse, it is apparent that
Shopping Units form a CSS.[39]
The Court also explained that Shopping Units are based on the same databases,
technology, payment, and linking system as standalone comparison sites.[40] The Court
concluded that because the Shopping Units that internet users see are only the
interfaces displayed at the end of a complex underlying matching mechanism:
This, in turn, invalidates the philosophy followed by the Commission thus far in
measuring any impact of the Compliance Mechanism. Even two days after the judgment
the Commission indicated a certain contentment with the Compliance Mechanism
because by now around 75% of the products displayed within Shopping Units “come
from merchants that work with rivals of Google.”[42] Yet, at least for three reasons these
figures are irrelevant to the question of Google’s compliance with the Decision.
First and foremost, the remedy does not oblige Google to ensure equal treatment within
Shopping Units, but within general results pages. As long as no rival CSS is entitled to
provide corresponding boxes, this obligation is not implemented. For the issue of equal
access to Google’s general results pages, it does not matter how Google compiles its
exclusive box. Even if Google succeeded to fill up its Shopping Units with 100% product
offerings that were uploaded to its index through a competing intermediary, it could
never create equal treatment on the general search results page. Because the unit is
still a part of Google’s CSS and “a click in a Shopping Unit [is] to be regarded as a
manifestation of the use of Google’s [CSS].[43]
Second, the Commission’s calculation contradicts the attribution of value laid down by
the Court. According to the Court, 100% of the clicks on a Shopping Unit are to be seen
as clicks for Google, irrespective of who served the product offerings within. If anything,
the high figure confirms the strong anti-competitive effect of the Compliance
Mechanism. It demonstrates that the mechanism serves Google as an acquisition tool
that brings more merchants, more inventory, and more advertising budgets to Google’s
CSS, where those merchants can then outbid each other to pay the highest price for the
´privilege` to be selected by Google for a box. Every single click on the Shopping Unit,
no matter who uploaded the feed, triggers a payment to Google. For the same reason,
Google’s argument that by now more than 700 companies participate in the Compliance
Mechanism[44] is beside the point. Most of them are “fake CSSs” that have been set up
by ad intermediaries or merchants that Google awarded with a discount if they
participated in the Compliance Mechanism.[45] In any case, the number of participants
says nothing. Thus far no CSSs have succeeded to gain any market share through the
mechanism.[46] This is only logical: as the boxes lead users directly to merchants, no
traffic goes to the participants’ websites, which is “the most important asset of a
specialised search engine.”[47]
Third, only allowing rival CSSs to place bids on behalf of their merchant customers for
product ads to be included in Google’s Shopping Units is also inconsistent with another
central finding by the Court: that such an alternative turns competitors into customers.
In recitals 319 and 347 to 353 the Court clarified that a feed-based mechanism for the
inclusion and display of rival CSSs within Shopping Units does not create equal
treatment because it turns rivals into Google customers.
Since around 2014, Google had ´allowed` rival CSSs to upload product feeds to
Google’s product index on behalf of their merchant customers, so that such products
may be displayed in Google’s Shopping Units. Because of this option, Google argued
that it had already granted rival CSSs access to its Shopping Units and, therefore, that
equal treatment was ensured. The Court dismissed this argument, finding that:
“competing [CSSs] were not, as such, eligible to appear in the Shopping Units. [T]hey
can be included only if they change their business model by adding a 'buy' button or if
they act as intermediaries to submit products to Google on behalf of online sellers. Yet,
as BDZV points out, these options fundamentally change the business model of a
[CSS].”[48]
In other words, “competing [CSSs] are not eligible for the same display criteria as
Google’s [CSS] – even by paying – to appear in Shopping Units, unless they change
their business model.”[49] That is because:
“While Google does indeed [..] allow retailers to send it feeds containing an inventory of
their products, in order to be eligible for this, [CSSs] must change their business
model.”[51]
“the arguments put forward by Google [..], according to which competing [CSSs] were
already included in the Shopping Units and therefore there could not have been any
favouring, must be rejected.”[52]
The Commission had largely presupposed such interrelations. They are only briefly
mentioned in two recitals of the Commission Decision.[53] However, the Court
considered this distinction between being a competitor and mere customer of a Google
service so crucial for the case that it included it in its two-page press release:
“While Google did subsequently enable competing [CSS] to enhance the quality of the
display of their results by appearing in its ‘boxes’ in return for payment, the General
Court notes that that service depended on the [CSS] changing their business model
and ceasing to be Google’s direct competitors, becoming its customers instead.”[54]
This point is crucial because as Google itself had explained to the Court, the current
Compliance Mechanism works “in exactly the same way”[55] as the late Shopping Units
that Google introduced in 2014 and which the Court condemned as being anti-
competitive. The only changes, “By CSS” and “view more” links, account for less than
1% of the clicks in the Shopping Units and are therefore immaterial.[56] In other words,
Google’s current Compliance Mechanism is based upon the very same mechanisms as
the one that the Court found to force competing CSSs “to stop being [Google’s]
competitors.” Thus, irrespective of Google’s false focus on equal access to Shopping
Units (rather than equal access to the broader general results page), Google’s claim
that the abuse has ceased because competing CSSs are now included in Shopping
Units, can only be rejected.
V. Implications for the regulation of general search and other gatekeeper services.
The General Court’s findings, in particular its reference to Google's particular
responsibility as an “ultra-dominant” “gateway to the internet,” as well as the comparison
to net neutrality regulation,[60] should also have far-reaching consequences for the
envisaged regulation of Google and other digital gatekeepers around the globe.
Equalising Google’s general search results pages with an essential infrastructure that
should be open and needs to grant equal access backs up all calls for a tough
regulatory stance against any favouring practices by a gatekeeper. Regarding the
European proposal for a Digital Markets Act, in particular, the General Court’s judgment
provides input for the fine-tuning of several envisaged obligations. For instance, the
judgment’s focus on the entire general search results page strongly suggests that any
regulatory prohibition to treat own services more favourably[61] must encompass any
type of Google’s search result,[62] and even navigation links in the menu links (tabs) on
general search results pages,[63] irrespective of whether they are displayed prior or
after the entry of a search query.[64] Equally, the judgment’s focus on equal access to
Google’s general results pages strongly suggests that the obligation to apply fair and
non-discriminatory general conditions of access for business users may not be limited to
app stores,[65] but must encompass, at the very least, also search engines.[66] In any
event, such legislative initiatives indicate that any appeal against the judgment would
not save Google from having to fundamentally change the way it treats competing
services within its general results pages.
Google needs to grant equal access to the general search results page, not any
equal treatment within a grouping of results powered by its specialised search
service. Equal treatment within Shopping Units is far less than equal treatment
within the entire search results page.
Google’s provision of specialised product ads via Shopping Units constitutes an
independent CSS. To display such units without allowing competing CSSs to
compile and display equivalent boxes based on their indexes and algorithms
therefore constitutes an abuse of dominance.
The opportunity for rival CSSs to buy ads in the Shopping Units powered by
Google’s CSS is no viable alternative in any event as it forces rivals to become
customers of Google’ CSS and to thereby stop competing with its service.
In light of all these findings, Google’s current Compliance Mechanism can under no
legal consideration comply with the remedy imposed in the Commission Decision.
Google will have to change the design of general search pages fundamentally--
immediately. The Commission in turn is obliged to enforce its Decision and to ensure
compliance with Article 102 TFEU in all affected sectors. The proceedings originally
covered “the unfavourable treatment” of all “competing vertical search providers” in
Google’s search results.[67] In 2014 the Commission decided to concentrate on the
comparison shopping sector first, to set a legal framework that then applies to all
affected markets. Following this logic, the natural, if not inevitable next step for the
Commission would be to enforce this shopping precedent now in a way that serves all
affected markets. Thus, the Commission needs to initiate formal non-compliance
proceedings and recover the periodic penalty fixed in its Decision for non-compliance.
[68] As of 15th November 2021, such penalty amounts up to US $37.727.233.742,17 -
rising daily by $25 million.[69] A failure to enforce the remedy and recover the penalty
could give rise to actions against the Commission itself, in particular under Article 265
TFEU.
Abstract: Does a dominant firm abuse its market power in violation of EU competition law and,
more specifically, art. 102 TFEU if it accords more favourable treatment to its own products or
services than to those of its rivals? In answering this question in the affirmative and holding that self-
preferencing constitutes a novel type of abuse of dominance, the European Commission's Google
Shopping decision (case AT.39740) expanded the scope of art. 102 TFEU into unchartered territory.
The Commission found that Google had abused its dominant position by guaranteeing its own
comparison shopping website a more prominent placement on the result page of its general internet
search engine than rival comparison shopping services. In November 2021, this decision was upheld
on appeal by the General Court of the European Union (case T-612/17 Google and Alphabet v
Commission (Google Shopping) ECLI:EU:T:2021:763). This Insight critically reflects on this
watershed ruling. The General Court’s Google Shopping judgment poses once more the unsettled
question of the exact boundaries of the concept of abuse of dominance under art. 102 TFEU.
This Insight analyses different attempts by the General Court to redraw the scope of art. 102 TFEU
by pinning down the constitutive elements of abusive self-preferencing. Although the Court
considered various pathways to determine the legality of self-preferencing, it failed to articulate a
clear legal test that establishes limiting principles as to when self-preferencing by a dominant firm
violates EU competition law. In light of this finding, this Insight sketches an alternative pathway that
would have enabled the General Court to ground the novel theory of harm of self-preferencing within
a legally and economically sound framework.
I. Introduction
On 10 November 2021, the General Court of the European Union handed down its long-awaited
judgment in the Google Shopping case.[1] The ruling upheld one of the most controversial and
consequential competition law decisions by the European Commission of the last decade. After
seven years of investigation and three failed commitment packages, the Commission concluded in
2017 that Google had abused its dominant position in violation of art. 102 TFEU. At the heart of the
Commission's finding of an abuse of dominance lay the novel theory of harm that Google had
designed the result page of its well-known general internet search engine “Google Search” in a way
that favoured its own Comparison Shopping Service (CSS) Google Shopping, while placing rival
CSS websites at a competitive disadvantage. According to the Commission, Google's abusive self-
preferencing consisted of two elements: Google was found to have i) consistently afforded its own
CSS greater visibility on the result pages of its general search engine by displaying it amongst the
highest ranked and most visible search results, and ii) simultaneously actively demoted competing
CSS on its general search result pages to lower-ranked links and pages. The Commission not only
sanctioned Google's conduct by imposing a then-record fine of 2.42 billion euro, but it also ordered
Google to put an end to its self-preferencing conduct and ensure equal access to all third-party
providers on its general search website.
rely in support of this conclusion.[2] Most notably, the Commission argued that it was not
the Bronner case.[3] Instead, the Commission took the view that it was not bound to show
that Google's general search result page constituted, consistent with the demanding Bronner test for
refusal to deal, an essential facility or indispensable input for competing CSS to be able to operate
effectively.[4] At the same time, however, the Commission failed to articulate any alternative
legal test in support of its finding that self-preferencing by a dominant firm may breach art. 102
TFEU. The Google Shopping decision soon fuelled a controversial debate about the appropriate
legal test and limiting principles that would indicate when self-preferencing constituted an abuse of
Since the Commission's decision in Google Shopping, the novel theory of harm of self-preferencing
took on a life of its own. Self-preferencing is singled out by a number of expert reports as
emblematic example of the new types of anticompetitive conduct that dominant platforms, most
notably Google, Apple, Amazon and Facebook, have used to leverage their market power and
entrench their grip over digital markets.[6] Self-preferencing also lies at the core of a number
of high-profile antitrust investigations that the Commission and other competition authorities have
[10] the as-efficient competitor test,[11] and the requisite standard of proof.
[12] But does it also address the fundamental question of how far art. 102 TFEU can interfere
with the design choices of dominant firms and prohibit them from according favourable treatment to
their own products or services?
The short answer to this question is: no. Those who expected the General Court to delineate the
redrawn boundaries of art. 102 TFEU after Google Shopping or had hoped for a limiting principle
that determines how far a dominant firm’s obligation of equal treatment reaches have certainly been
disappointed by the judgment. The General Court missed the opportunity in Google Shopping to set
out a clear legal test to establish which elements must be fulfilled for self-preferencing to qualify as
an abuse of dominance. Even after the General Court's Google Shopping ruling, we remain in the
dark as to when exactly self-preferencing amounts to an abuse of dominance and when it does not.
The remainder of this Insight develops this argument as follows. Section II discusses the General
Court's holding that self-preferencing constitutes a free-standing abuse of dominance under art. 102
TFEU as the main takeaway of the case. Section III critically reflects on different unsuccessful
attempts by the General Court to pin down a legal test that spells out the constitutive elements that
self-preferencing has to fulfil to qualify as an abuse of dominance. Section IV proposes an
alternative route that the General Court could have taken to devise a clear analytical framework and
test for the analysis of self-preferencing in future cases. Section V concludes.
II. Self-preferencing as a free-standing abuse of dominance
The most important takeaway and clarification brought about by the Google Shopping judgment is
that self-preferencing, or what the General Court calls “favouring”, on the part of a dominant firm is
liable to constitute on its own an independent form of abuse of dominance. The General Court thus
sided with the Commission's position that, as a matter of principle, unilateral conduct whereby a
vertically integrated dominant platform gives greater visibility to its own product/service relative to
competing products/services and downgrades the “findability” of competing products/services may
The Google Shopping ruling also upheld the most important elements of the Commission's
reasoning that supported its finding that Google's self-preferencing violated art. 102 TFEU. The
General Court recalled that art. 102 TFEU provides a non-exhaustive list of examples of abusive
practices. The mere facts that self-preferencing constitutes a novel form of abuse and that art. 102
TFEU does not explicitly refer to self-preferencing cannot preclude the Commission from
General Court rejected the claim advanced by Google and learned commentators[15] that the
[16] The Google Shopping ruling thus makes it plain that self-preferencing by a dominant firm
may fall foul of art. 102 even if access to the platform (or infrastructure) on which it occurs is not
indispensable for rivals active on an adjacent upstream or downstream market and the self-
In upholding the Commission's finding that self-preferencing may constitute a standalone abuse
under art. 102 TFEU, the General Court endorsed the Commission's expansive reading of the
special responsibility[18] of dominant firms under art. 102. This bold reading implies that art.
102 TFEU may, in certain circumstances, impose limits on the dominant firm's discretion to alter or
even improve the design of its products and services.[19] Google Shopping also reaffirmed
the open-textured and versatile nature of the prohibition of art. 102 TFEU. For dominant firm conduct
to be in breach of art. 102 TFEU, it does not have to fall within well-established legal categories or
economic theories of harm. Instead, art. 102 TFEU empowers the Commission to take action against
any form of unilateral conduct by dominant firms that is inconsistent with the principle of competition
on the merits because it excludes competing operators from the market, not on the basis of better
quality or performance but by reason of the dominant firm's superior market power.[20]
This reaffirmation of the “openness”[21] of art. 102 TFEU in Google Shopping is a welcome
development. It serves as an important reminder of the “conceptual elasticity”[22] of art. 102
TFEU, which enables the EU competition law system to respond to novel types of abuses and harms
to competition. This flexibility and responsiveness undoubtedly constitute a strength of the system,
as they allow EU competition law to adapt to changing circumstances and secure the preservation of
competition even in fast-moving environments, such as digital markets.
limiting principles that strike a balance between the openness and the integrity of the provision by
ensuring legal certainty as to when specific conduct accords with lawful competition on the merits,
and when it does not.
Yet the General Court's ruling is much less cogent when it comes to laying down limiting principles
that provide guidance as to when self-preferencing clashes with competition on the merits. In its
infringement decision, the Commission relied on two somewhat distinct theories of harm to support
its finding that Google's conduct amounts to an abuse of dominance. On the one hand, it advanced a
discrimination theory of harm. It found that Google had subjected competing CSS to unequal, and
hence unfair, treatment by giving its own CSS greater visibility on its general search result pages
while downgrading the visibility of competing CSS, thereby depriving them of a substantial amount of
end-user traffic.[24] On the other hand, the Commission also argued that Google's self-
preferencing was abusive because it allowed the company to leverage its dominant position on the
market for general search into the adjacent market for comparison shopping services.
[25] The Commission, however, failed to put forth a clear legal test for either of these theories
of harm.
The General Court's ruling in Google Shopping does not fare any better. With respect to the
“leveraging” theory of harm, the General Court observed that leveraging is not a specific form of
abuse in itself. Rather, it constitutes a generic term that describes practices that occur in one market
and have appreciable results on competition in related adjacent markets.[26] Leveraging is,
therefore, best understood as an umbrella term to designate various practices such as tying, refusal
to deal, margin squeeze, or rebates.[27] While leveraging by a dominant firm may amount to
an abuse of dominance if it takes the form of one of these practices, the Court asserted that the
mere fact that a dominant undertaking leverages its market power from one market to another is
insufficient to qualify, in itself, as an abuse. Accordingly, something more than mere leveraging must
How much more, however, remains unclear. Google Shopping clearly resists a restrictive reading
that would only outlaw leveraging that falls within the established category of a refusal to deal as
defined in Bronner.[29] To make this point, the General Court walked a thin line. The Court
went to great lengths to distinguish self-preferencing from refusals to deal covered by Bronner. It
held that the Bronner test only applies to express[30] refusals to deal, while self-preferencing,
as well as other forms of constructive refusals to deal, such as margin squeeze, are not governed by
the strict Bronner criteria.[31] At the same time, however, the General Court undermined its
efforts to narrow the scope of Bronner to “express” refusals to deal by asserting that it emerges from
the Commission's decision that Google's general search result page had “characteristics akin to
those of an essential facility”.[32] According to the General Court, the Commission had – at
least implicitly or unwittingly – established that the traffic generated by Google's general search
result pages was “indispensable”[33] for rival CSS to operate because it could not be
realistically replicated by other sources[34] and that Google's practice led “to the potential
The General Court’s discussion of Bronner appears to have it both ways: the Court contends that
the Commission was under no obligation to demonstrate that self-preferencing amounted to a
refusal to deal as defined in Bronner, only to tell us in the same section of the judgment that the
Commission had, in any case, implicitly established that Google's conduct met the Bronner criteria.
A charitable reading may interpret this fundamental tension in the General Court's reasoning as a
sign that the judges were deeply divided over the requisite legal standard to be met in order for self-
preferencing to qualify as an abuse. A less forgiving reading would suggest that it defies logic. The
Court’s orbiter dictum on the quasi-essentiality of Google’s search result page also raises broader
questions about the scope of the General Court's judicial review because it de facto substitutes, at
least in part, its own factual assessment for that of the Commission.[36]
While the Court made it clear that, as a matter of principle, the Commission was under no obligation
to demonstrate that self-preferencing fulfilled the Bronner criteria, it omitted to clearly spell out any
alternative test or limiting principle to determine when self-preferencing ought to be condemned as
unlawful leveraging. Such a test is, if at all, only implicitly articulated in the judgment. The Court
highlighted that the Commission did not content itself with establishing that self-preferencing enabled
Google to leverage its market power, but that it also adduced additional circumstances that indicated
how this leveraging entailed anticompetitive effects.[37] According to the Court, the
visibility and ranking of competing CSS on its general search results page.[38] This
elements may constitute the rudimentary scaffolding for a legal test to distinguish lawful from
unlawful self-preferencing, the General Court by no means signalled that these elements were
binding on the Commission when establishing unlawful self-preferencing in future cases.
With regard to the discrimination theory of harm, the Google Shopping ruling does not provide much
clarity either. Instead, the General Court again in broad brushes followed the reasoning of the
Commission. It held that Google's self-preferencing was objectionable because it treated rival CSS
less favourably than its own CSS and thereby placed its competitors at an unfair disadvantage.
[40] The General Court highlighted that the principle of equal treatment not only constitutes a
general principle of EU law[41] but also forms the very basis of equality of opportunity
The General Court then introduced some form of a novel “no economic sense test” [43] to
describe when and why self-preferencing constitutes an undue form of unequal treatment or
discrimination. It contended that Google's initial business model for its general search engine
consisted of providing consumers with neutral, objective, and unbiased search results which are
most relevant to their search queries.[44] The Court took the view that Google's self-
preferencing of its own CSS relative to competing CSS sites regardless of their relevance
constituted an “abnormality”[45] as it runs counter to Google’s own business model.
[46] Not only, so the Court, was the self-preferencing only possible by virtue of Google's
market power, as consumers would otherwise have switched to other more objective alternatives; it
also implied that the self-preferencing could not be explained by any economic rationale other than
This iteration of the “no economic sense test” is fraught with difficulties. Above all, the General
Court's reasoning implies that a dominant undertaking's special responsibility may prevent it from
altering its business model if such a change turns out to be disadvantageous for competing
products/services relative to the dominant firm’s own product/service.[48] By implication, this
imposes an obligation on Google to run its general search service like a public utility and to
guarantee equal access for all interested third-party providers. Indeed, Google Shopping goes as far
as suggesting that even changes in the product design which contribute to an improvement of the
dominant firm's business model may be incompatible with the special responsibility of dominant firms
Such a sweeping interpretation of the special responsibility of dominant firms is not a problem in
itself, as long as its underpinning rationale and limiting principles are clearly articulated and its
implications for innovation duly considered. However, no such explanation is provided apart from the
fact that Google held a “superdominant position” and operated as “a gateway to the internet” within a
market characterised by high entry barriers.[50] The implications of the General Court's “no
economic sense test” also deviate from the recent CK Telecoms ruling. In this judgment, the General
Court held that the mere fact that a merged entity adopts changes to its post-merger business
strategy cannot result in a significant impediment to effective competition even though it may
The most important shortcoming of the General Court's version of the “no economic sense test” is
that it leaves open the matter of exactly when unequal treatment in the form of self-preferencing
amounts to an “abnormality”. It thus fails to put forth any limiting principle that delineates the scope
of the special responsibility of dominant firms under art. 102 TFEU. Nor does it give guidance to
dominant firms with regard to how far they can go in designing their products in a way that grants
preferential treatment to their own business units. Indeed, the “no economic sense test” tells us
nothing about the constitutive conduct elements of unlawful self-preferencing, let alone the
exclusionary effects that must be present for it to breach art. 102 TFEU. The General Court put
major emphasis on the fact that Google's self-preferencing consisted of two elements, namely the
upgrading of its own CSS and the demoting of competing CSS.[52] In no instance, however,
did it state that self-preferencing must contain both conduct elements – that is, involve the upgrading
of the dominant firm's own service plus the active and consistent downgrading of its competing
services. It remains hence unclear whether, in future cases, only one of these two elements would
be sufficient to establish the abusive character of self-preferencing conduct.
The General Court's failure to clarify this point is a major omission. The question of whether the two
elements of upgrading of the dominant firm's own business and the downgrading of competitors
have to be cumulatively present for self-preferencing to qualify as abuse is determinative of the
evidentiary burden for competition authorities and private plaintiffs under art. 102 TFEU. It is also of
paramount importance for dominant undertakings to know how far they can go in designing their
products and services in a way that gives greater visibility to their own offers. Moreover, it affects the
evidentiary burden for the defendant undertaking when pleading an objective justification or putting
forward a counterfactual as rebuttal evidence. That becomes evident in the General Court's
discussion of Google's objective justification and counterfactual analysis. The Court observed that
Google could not justify its otherwise unlawful self-preferencing on the grounds that it gave its own
CSS greater visibility to improve its service quality. While this explanation may serve as justification
for the upgrading of Google's own CSS, the Court held that it failed to provide a legitimate
explanation for the downgrading of competing CSS.[53] Along similar lines, the General Court
also rejected the relevance of two counterfactual studies Google produced during the proceedings.
These studies showed by means of a “difference-in-difference analysis” and an “ablation
experiment” that the greater visibility of Google’s own CSS on its general search result page had
only a marginal impact on traffic.[54] The General Court objected that both studies focused
One is left wondering whether this means that unlawful self-preferencing always consists of
upgrading and downgrading, for both of which dominant firms have to advance an objective
justification or other forms of rebuttal evidence. Or does it imply that even self-preferencing
consisting of only one out of the two conduct elements criticised in Google Shopping may run afoul
of art. 102 TFEU, but that, in this case, dominant firms face a lower evidentiary burden because they
only have to adduce an objective justification or counterfactual for this one element?
Greater clarity on the constitutive elements of unlawful self-preferencing under art. 102 TFEU may
also inform the current policy discussion on the new platform regulations. Above all, it may provide
guidance on the scope of the ex-ante prohibitions of self-preferencing enshrined in the Digital
Markets Act (DMA), which draws up a new regulatory framework for powerful “gatekeeper”
platforms.[56] In its current state, art. 6(1)(d) of the DMA proposal is framed in a way that
requires gatekeeper platforms to refrain from any favourable ranking of their own products or
services, irrespective of whether competing products are actively downgraded. If Google
Shopping is to be read as requiring upgrading and downgrading as two cumulative constitutive
elements of self-preferencing, it would be up to the EU legislator to take the necessary steps to
finetune art. 6(1)(d) lest it become a major source of inconsistency.
under art. 102(2)(c) TFEU with no mention of the recent MEO ruling. The MEOjudgment added to
this case law by further clarifying when a dominant firm's unequal treatment of upstream or
downstream customers violates art. 102(2)(c) TFEU. In a nutshell, that is the case if a dominant
firm i) applies dissimilar conditions to equivalent transactions and thereby ii) places other trading
The major contribution of MEO was that it clarified that the Commission could no longer content
itself with establishing that the dominant firm had subjected trading partners to unequal treatment.
Instead, it would also have to assess “all the relevant circumstances” to determine whether the
discriminatory conduct had a foreclosure effect on upstream or downstream customers, and it would
have to ascertain the seriousness of this effect.[59] Amongst the relevant circumstances for
this effects-based analysis of the dominant firm's unequal treatment are, for instance, the negotiating
power of upstream or downstream customers, the conditions and duration of the discriminatory
arrangements, the existence of an exclusionary strategy, and, notably, the impact of the
While the MEO case involved discriminatory pricing conduct, nothing precludes the application of
this test to determine the legality of self-preferencing. Indeed, the wording of art. 102(2)(c) TFEU,
which prohibits the application of “dissimilar conditions to equivalent transactions”, is sufficiently
flexible to accommodate both discriminatory pricing and non-price conduct.[61] Nor does the
fact that MEO was not vertically integrated and only discriminated amongst third-party downstream
customers suggest that it constitutes an inapposite framework for the analysis of self-preferencing
that relates to discrimination by a vertically integrated firm between its own upstream/downstream
division and competing third-party services. On the contrary, the Advocate General[62] and
the Court[63] agreed in MEO that the fact that a dominant firm is vertically integrated and
uses discriminatory conduct to favour its own upstream or downstream unit would make it a more
plausible foreclosure strategy. This observation is of particular relevance for the analysis of unequal
treatment in digital markets involving platforms with a hybrid business model which, like Google,
operate both a marketplace and sales function.[64] As their upstream or downstream sales
function is exposed to a cannibalisation effect by competition at the relevant level of trade, vertically
integrated hybrid platforms may have strong incentives to design their marketplace in a way that
places upstream or downstream rivals at a disadvantage.
The MEO test would certainly provide a conceptually sounder foundation for the analysis of self-
preferencing than the General Court's “no economic sense test”. Elegant though it may appear, the
“no economic sense test” often puts competition authorities and courts in the uncomfortable position
of second-guessing the business model of the dominant firm. Such an exercise inevitably involves
strong assumptions which can be easily challenged and which, being subjective in nature, sit
uneasily with the fact that the notion of “abuse of dominance” is an objective concept.
[65] This becomes apparent from the General Court's bold claim that Google's self-
preferencing runs counter to its business model and therefore does not make any economic sense.
This proposition appears out of sync with commercial reality. Strategic product placement of private
labels or products by “category captains” are commonplace in the grocery sector[66] and has
been recognised to be a source of important efficiencies.[67] This is the case even though the
business model of grocery stores also hinges on providing consumers with access to a broad choice
of products.[68] The difference between the self-preferencing employed by Google and that
employed by grocery stores or their category captains does not necessarily lie in their respective
business models. It revolves instead around their respective market power and the ensuing potential
to generate substantial foreclosure effects.[69] It is on these effects, rather than the economic
sense of Google's conduct, where the focus of the art. 102 TFEU analysis should rest.
An assessment of self-preferencing under art. 102(2)(c) TFEU based on the MEO test would have
the merit of putting this theory of harm back on a conceptually sound foundation and of providing a
clear framework that ensures legal certainty to dominant firms and their competitors as to when self-
preferencing amounts to unlawful abuse. Considering self-preferencing within the framework of art.
102(2)(c) TFEU, as interpreted in MEO, would have enabled the General Court to “retrofit” the
Commission's analysis into well-established conceptual and legal categories.
Applying the MEO test to self-preferencing would also do greater justice to the economic analysis
that the Commission deployed in Google Shopping. The beauty of MEO is that it realigns the
assessment of secondary-line discrimination with the “raising rivals' costs” paradigm that provides an
economically sound and unified framework for the analysis of arguably any type of exclusionary
conduct under art. 102 TFEU. MEO suggests that unequal treatment of upstream or downstream
competitors by a dominant firm is harmful to competition if it raises their costs to the extent that they
are no longer capable of exerting meaningful competitive pressure and, as a result, competition is
materially impaired.[70] Such a strategy of raising rivals' costs can be implemented through
the pricing of an important input controlled by the dominant firm that competitors (upstream or
downstream) need in order to be able to compete effectively. But it can also take the form of non-
price foreclosure of important distribution channels that prevents competitors from achieving
minimum efficient scale or forces them to distribute through less effective and more costly sales
channels.[71]
Arguably, the Commission's analysis endorsed by the General Court in Google Shopping closely
followed the blueprint of the raising rivals' cost analysis that informs MEO as well as other leading
“effects” cases under art. 101[72] and art. 102 TFEU.[73] The Commission first
assessed the foreclosure rate of Google's exclusionary practice by gauging the proportion of CSS
traffic that was affected by Google's self-preferencing.[74] It concluded that Google's self-
preferencing affected a “large proportion of the overall traffic of competing comparison shopping
of the traffic that rival CSS received from Google's general search result page. [76] Third, it
considered the extent to which competing CSS could have recourse to effective counterstrategies
that would allow them to compensate for the loss in traffic from Google's general search result page
by reaching end-users through alternative channels. It found that competing CSS could not offset the
loss in traffic from Google's general search results through alternative distribution channels, such as
text ads on Google, mobile apps, direct traffic, or other sources, which proved either ineffective or
economically unviable substitutes for the traffic coming from Google's general search result page.
[77] The traffic from Google's search result notably outperformed other traffic in generating
clicks for CSS. Moreover, some of the alternative sources of traffic, such as text ads, were also
considerably more expensive than search engine optimisation that ensures traffic from Google's
general search result page.[78] In a nutshell, the Commission attempted to show that
Google's unequal treatment of competing CSS raised rivals' costs by foreclosing a substantial
fraction of their distribution channel and forcing them to reach customers through more expensive
and less effective distribution channels, thereby preventing them from building up a critical mass of
network effects.[79]
Grounding the assessment of self-preferencing in the MEO test and the underlying raising rivals'
cost theory of harm would also have allowed the General Court to put forward a more cogent
explanation as to why the Commission was under no obligation to demonstrate that non-price
abuses, such as self-preferencing, are capable of foreclosing equally efficient competitors.
[80] Indeed, the General Court seems to erroneously assume that the as-efficient competitor
test, which seeks to determine whether the impugned dominant firm conduct is capable of
foreclosing equally efficient competitors, can only take the form of an (incremental) price-cost test
and can therefore only be used for the assessment of pricing, but not non-price abuses.
[81] The raising rivals’ cost literature suggests otherwise. One way of determining whether
non-price conduct on the part of a dominant firm forecloses an equally efficient competitor from the
market is to look at the foreclosure rate of the impugned conduct and determine whether it is
sufficiently large to hinder competitors from achieving minimum efficient or viable scale (MES/MVS
test).[82] If that is the case, it is safe to assume that even equally efficient competitors would
not be able to withstand the dominant firm's conduct and that the impugned conduct is likely to lead
to market power effects. Yet, even in its iteration as an MES/MVS test, the as-efficient competitor
test may prove under-inclusive because it only catches conduct that is capable of fully foreclosing an
equally efficient competitor from the market. The as-efficient competitor test – both in its
operationalisation as (incremental) price-cost or MES/MVS test – thus fails to address
anticompetitive conduct that falls short of full foreclosure but nonetheless significantly raises rivals'
costs and reduces their competitive impact, without however entirely eliminating them from the
market.[83]
Above all, the MEO test would have enabled the General Court to lay down a principled and effects-
based legal test that clearly indicates when self-preferencing by a dominant firm will qualify as an
abuse in future cases. Simultaneously, it sets out a limiting principle as to how far a dominant firm's
equal treatment obligation reaches. Consistent with existing case law, self-preferencing would be
unlawful if the dominant firm i) applies dissimilar conditions to equal transactions and ii) thereby
places other trading parties at a competitive disadvantage by foreclosing a large enough fraction of
their distribution channel to raise their costs.[84] Such would notably be the case if the self-
preferencing conduct covers an important distribution channel and rivals do not have access to
effective and economically viable alternative sales channels. This test would introduce an
administrable and economically informed limiting principle to distinguish legitimate and illegitimate
self-preferencing or unequal treatment on the part of a dominant firm: a dominant firm would thus
remain free to design its business in a way that favours its own products or services over those sold
by rivals, as long as the unequal treatment or self-preferencing does not have the potential to result
in significant foreclosure effects.
V. Conclusion
(Legal and economic) Tests have been close to the heart of competition lawyers, and not just since
the outbreak of the Covid-19 pandemic. The Commission's omission in its Google Shopping decision
to articulate clear benchmarks that specify when self-preferencing violates art. 102 TFEU has again
brought the question of the appropriate legal test for finding an abuse of dominance to the forefront
of European competition law debates. While the General Court's ruling brings about some important
clarifications as to the legal status of self-preferencing under art. 102 TFEU, it failed to remedy this
basic flaw in the Commission's decision by forging clear limiting principles that delineate when self-
preferencing infringes art. 102 TFEU. Neither the General Court's pronouncements on the scope of
the Bronner test, nor its discussion of leveraging and the “no economic sense test”, provide clear
and precise guidance as to when self-preferencing is incompatible with competition on the merits,
and when it is not. Even after Google Shopping, dominant firms and their competitors are left
wondering which constitutive elements have to be fulfilled for self-preferencing to breach art. 102
TFEU. The failure of the General Court to establish a clear limiting principle determining the
(il)legality of self-preferencing is unfortunate. Dominant firms will have little legal certainty as to how
far they can go in altering their business model and design of their products or services without
risking antitrust liability. This may chill their incentives to undertake product improvements and to
innovate. By the same token, competitors and competition authorities also have little certainty as to
how far the protective scope of art. 102 TFEU reaches and when they can effectively challenge self-
preferencing by dominant firms. This uncertainty may also take its toll on competitors' incentives to
innovate.
This unsatisfactory outcome could easily have been avoided. The MEO test, which clarifies long-
standing case law on when discriminatory conduct by dominant firms constitutes an abuse of
dominance, could have provided a well-established legal framework that sets out the relevant
constitutive elements for unlawful self-preferencing. It would also have allowed the General Court to
link the analysis of self-preferencing with the “raising rivals’ costs” paradigm, which offers a unified
economic framework for assessing exclusionary conduct under art. 102 TFEU. This road has not
been taken by General Court. As a result, competition lawyers, dominant firms and their competitors
will continue to be in search of the legal test for self-preferencing. A counter-intuitive takeaway of
the Google Shopping saga is that obsessive attempts to shoehorn novel forms of exclusionary
conduct into existing legal categories enhance neither analytical clarity nor legal certainty. The
alternative route of grounding the assessment of exclusionary conduct in the "raising rivals‘ cost"
paradigm would provide an economically well-established and sound, principled and unified
framework for an effects-based analysis of any type of exclusionary conduct under Art. 102 TFEU,
which ensures legal certainty and strikes an adequate balance between the openness and integrity
of the system.
Some may object that the legal question of the applicable test for self-preferencing will soon be moot
because the new DMA will, in any case, introduce a per se prohibition for self-preferencing by
gatekeeper platforms in the near future. The reality may, however, turn out to be slightly more
complex. The difficulty of pinning down a clear definition for self-preferencing may soon also creep
into the enforcement of the DMA. The vague definition of self-preferencing in art. 6(1)(d) of the
current DMA proposal does not bode well in this regard.[85] At the same time, it is also
conceivable that the failure of the General Court to establish a clear test for self-preferencing under
art. 102 may facilitate cross-fertilisation between the DMA and the assessment of art. 102 TFEU. For
better or worse, the per se approach against self-preferencing under the new platform regulations
may thus also creep into the enforcement of art. 102 TFEU against self-preferencing by dominant
firms that are not designated as gatekeeper platforms. Google Shopping is thus also a missed
opportunity for the General Court to contribute to greater consistency between art. 102 TFEU and
the nascent DMA and, thereby, to prevent undue fragmentation of EU competition law.