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Cleary defends Google in face of potential €1bn EC antitrust shopping market abuse fine

The European Commission’s (EC) probe of Google’s online shopping practices is reported to be closing in coming months with a potential €1bn (£875m) fine, in a case in which Clifford Chance (CC), Cleary Gottlieb Steen & Hamilton and Covington & Burling all act. 

For seven years, the European regulator has been investigating allegations that Google favours its own online shopping price comparison services above others on its search engine, abusing its dominant market position in breach of antitrust law.

According to media reports, the Brussels-based agency is nearing a decision on a fine against the company.

In 2009, UK price comparison website Foundem accused Google of lowering its ranking on the search engine in favour of its own companies. At least 30 other similar complaints soon followed from companies such as Microsoft, Expedia and TripAdvisor.

The fine is expected to break the EC’s previous record in relation to an technology company antitrust breach after it fined Intel €1.06 billion in May 2009 for granting favourable rebates to companies such as Dell, HP, and Lenovo, for acquiring all or nearly all of their chips from Intel. 

The EC opened this Google antitrust case in 2010. In July 2016, the EC formally stated that Google ‘has abused its dominant position by systematically favouring its comparison shopping service in its search result pages.’ Google denied the allegations and delayed its response.

The EC is concerned that Google promotes its own services its rivals’ cost to the ‘detriment of consumers’ who have to pay more due to resulting market distortion. It also claims that Google’s conduct ‘stifles innovation’ in the market for online shopping.

The EC also sent a statement of objections to Google in relation to advertising. According to the EC, Google restricted the ability of certain third party websites to display search advertisements from its competitors. The three firms are also involved in this separate investigation.

Alphabet Group, a holding company, has owned the US multinational conglomerate and other Google subsidiaries since a corporate restructure in 2015.

Cleary’s London-based competition partner Maurits Dolmans and Brussels partners Thomas Graf and Robbert Snelders act are defending Google. Google’s internal competition lawyer Julia Holz co-ordinates the company’s in-house defence.

Led by partner Thomas Vinje, CC is advising Fairsearch, a 15-strong consortium with allegations against Google in the case. Covington & Burling’s Miranda Cole acts for Expedia, TripAdvisor and trivago.

In December 2016, Google’s UK and Ireland legal chief Emma Jelley left the company to join tech start-up Onfido as general counsel.

Jelley had overseen the company’s legal affairs in the UK and Ireland for eight years.