The Court of Justice’s Judgment in Google Shopping Between Principles and Pragmatismg
Justin Lindeboom & Vaszília Bartošová 1
Introduction
After 14 years, the Google Shopping antitrust case finally came to an end on 10 September 2024, when the Grand Chamber of the Court of Justice (the ‘Court of Justice’) dismissed Google’s appeal in full.2 The Court of Justice’s judgment not only confirmed the lawfulness of the Commission’s prohibition decision and the EUR 2.4 billion fine, but also clarified a number of core principles and rules of the prohibition of abuse of a dominant position in Article 102 TFEU. The Court confirmed the limited applicability of the strict Bronner criteria which apply to a refusal by a dominant undertaking to deal with another party, clarified under what circumstances preferential treatment of a dominant undertaking’s own products is abusive, and emphasised that Article 102 TFEU does not require competition authorities to prove, in all cases, that competitors just as efficient as the dominant undertaking are pushed off the market. For these reasons, the Grand Chamber’s judgment is a landmark case that will shape the future enforcement of Article 102 TFEU.
The facts of the case are essentially as follows. Google’s search engine displays search results in two distinct ways. First, the general search results are generated by Google’s general search algorithms and are characterised by blue text links. Second, there are so-called specialised search results, which appear among others alongside general results but are more prominently displayed. Google developed several specialised search results including for news, flights and shopping. More specifically, in 2002 Google started offering a comparison shopping service, which it included on its general search page from 2003 onwards. This comparison shopping service consists of boxes, displayed above and alongside general search results, with pictures of products, their prices and links to the websites of sellers. While Google’s comparison shopping services service is prominently displayed, competing comparison shopping services such as Kelkoo and Twenga can only appear in the general search results. Adjustments to Google’s general search algorithm, moreover, demoted alternate comparison shopping services, making them even less visible in general search results.3
1. Justin Lindeboom is Associate Professor of Law at the University of Groningen. Vaszília Bartošová is Graduate Student and Research Assistant at the University of Groningen.
2. Judgment of the Court of Justice of 10 September 2024, Google and Alphabet v. Commission (Google Shopping) (C-48/22, EU:C:2024:726).
3. Judgment of the Court of Justice, Google Shopping, paras. 4–13, 24.
In 2010, the European Commission started an investigation that ultimately resulted in its 2017 prohibition decision that imposed a EUR 2.4 billion fine on Google for abusing its dominant position in the market for general search engine services by favouring its own comparison shopping services over competing comparison shopping services.4 The Commission’s decision led to a wide-ranging academic debate on whether the Commission’s theory of harm to competition was economically sound, and whether it was allowed to qualify as abusive a type of conduct that, as such, had not been subject of a previous antitrust case.
In November 2021, the General Court upheld the Commission’s decision and ruled that the Commission was allowed to legally qualify Google’s self-favouring conduct as abuse of a dominant position, even though the decision was based on a novel theory of harm to competition.5
In this Long-Read, we first explain the main findings of the Court of Justice’s judgment in regard to the four grounds of appeal that Google had put forward, which focused on the questions of (1) whether the so-called Bronner criteria should apply to self-favouring conduct; (2) whether and when self-favouring deviates from ‘competition on the merits’; (3) whether a so-called ‘counterfactual analysis’ is always necessary in abuse cases; and (4) whether the Commission was required to conduct an ‘as-efficient competitor test’.
We then analyse some of the core aspects of the judgment and their implications for the enforcement of competition law against self-favouring conduct.
The Commission’s decision led to a wide-ranging academic debate on whether the Commission’s theory of harm to competition was economically sound, and whether it was allowed to
4. Commission Decision of 27 June 2017, Google Search (Shopping) (case AT.39740, COM (2017) 4444 final), points 1–2.
5. Judgment of the General Court of 10 November 2021, Google and Alphabet v. Commission (Google Shopping) (T- 612/17 EU:T:2021:763).
We argue, firstly, that the Court was legally and economically right to distinguish Google’s conduct from a so-called ‘refusal to deal’ which, following the landmark Bronner judgment, can only constitute an abuse in exceptional circumstances.
Second, the Court clarified how self-favouring conduct by dominant undertakings may deviate from ‘competition on the merits’. It provided a number of useful guidelines on how to distinguish ‘competition on the merits’ from anti-competitive conduct, which allow for a sufficient degree of flexibility for the Commission to craft novel theories of harm, without jeopardising effective judicial review.
Third, we claim that the judgment offers useful guidance on the goals of Article 102 TFEU and the limited relevance of the ‘as-efficient competitor principle’ in abuse cases. However, the judgment includes some confusing passages on the principles underlying Article 102 TFEU, in particular on the question of when the Commission is required to show that the conduct excludes equally efficient competitors.
Finally, we offer some brief concluding reflections on the legacy of the 14-year long Google Shopping saga, and its relationship to the newly adopted Digital Markets Act.
The Judgment of the Court of Justice
The applicability of the Bronner criteria
In Bronner, the Court of Justice held that the refusal by a dominant undertaking to start dealing with another undertaking can only constitute abuse in exceptional circumstances because competition law enforcement would interfere with the freedom of contract and the right to property.6 Accordingly, a refusal to deal only constitute abuse if access to the service of the dominant undertaking is ‘indispensable’ for the other undertaking to carry on its business.
The General Court in Google Shopping concluded that the Bronner criteria were not applicable to this case.7 It held that the Bronner criteria only apply when an undertaking expressly requests access to the dominant undertaking’s facility and that access is subsequently refused. By contrast, Google did not refuse access to its search results page, but rather actively acted to favour its own comparison shopping service over those of its competitors.8
On appeal, Google claimed among others that the Bronner criteria should apply whenever the dominant undertaking retains an asset for its own benefit, and that in this case the competing comparison shopping services requested access specifically to Google’s specialised search results boxes, not its search results page in general.9
6. Judgment of the Court of Justice of 26 November 1998, Oscar Bronner v Mediaprint Zeitungs- und Zeitschriftenverlag (C-7/97, EU:C:1998:569, paras 39–41).
7. Judgment of the General Court, Google Shopping, paras 229–247.
8. Judgment of the General Court, Google Shopping, paras 237–241.
9. Judgment of the Court of Justice, Google Shopping, paras 70–72.
The Court of Justice rejected this ground of appeal and confirmed that the allegedly anticompetitive conduct was essentially not about granting access but rather concerned the combination of two discriminatory practices: ‘(i) the more favourable positioning and display of Google’s own specialised results within its general results pages [and] (ii) the simultaneous demotion of results from competing comparison shopping services by the application of adjustment algorithms’.10 The Bronner criteria must be limited to situations in which the dominant undertaking refuses access altogether. In that situation a finding of abuse will force the dominant undertaking to conclude a contract with a competitor, which justifies the strict indispensability criterion.11 Since Google had already granted competing comparison shopping services access to its search results page, a finding of abuse does not interfere with Google’s freedom of contract and right to property, and the Bronner criteria do not apply here.12
The legal test for self-favouring and ‘competition on the merits’
The General Court in Google Shopping concluded that the Bronner criteria were not applicable to this case. It held that the Bronner criteria only apply when an undertaking expressly requests access to the dominant undertaking’s facility and that access is subsequently refused
Before Google Shopping, it was unclear to what extent self-favouring by a dominant undertaking could amount to abuse.13 The General Court had held in this regard that the Commission was allowed to classify Google’s conduct as deviating from competition on the merits in light of three factual circumstances: (i) the importance of traffic generated by Google’s general search engine for comparison shopping services; (ii) the behaviour of users when searching online; and (iii) the fact that diverted traffic from Google’s general results pages accounted for a large proportion of traffic to competing comparison shopping services and could not be effectively replaced by other sources.14
Google claimed on appeal that the General Court unlawfully had held that these three circumstances sufficed to conclude that Google did not compete on the merits.15
The Court of Justice rejected this ground of appeal and provided, to this effect, additional clarification on what is required of the Commission to demonstrate that the conduct of the dominant undertaking, firstly, deviates from competition on the merits and, secondly, has at least potential anti-competitive effects.
10. Judgment of the Court of Justice, Google Shopping, para 97.
11. Judgment of the Court of Justice, Google Shopping, para 90–91.
12. Judgment of the Court of Justice, Google Shopping, paras 111–112.
13. See e.g. Pablo Ibáñez Colomo, ‘Self-Preferencing: Yet Another Epithet in Need of Limiting Principles’, World Competition 43, 2020, pp. 417–446.
14. Judgment of the General Court, Google Shopping, paras 169–173.
15. Judgment of the Court of Justice, Google Shopping, para 124.
First, the Court repeated the so-called ‘as-efficient competitor principle’, according to which ‘it is not the purpose of Article 102 TFEU to […] ensure that competitors less efficient than an undertaking in such a position should remain on the market’ because ‘competition on the merits may, by definition, lead to the departure from the market or the marginalisation of competitors which are less efficient and so less attractive to consumers from the point of view of, among other things, price, choice, quality or innovation’.16
Accordingly, competition on the merits means that competitors compete on particular relevant markets on the basis of the merits of their own products or services. Following up on this principle, the Court recalled that the Commission is required, ‘as a rule’, to demonstrate that the conduct deviates from competition on the merits and has the potential effect of excluding equally efficient competitors.17
However, the Court immediately added that conduct can also be abusive if it impedes potentially competing undertakings at an earlier stage from entering the market. Even if those (potential) competitors are not (yet) equally efficient, the dominant undertaking may not exclude them by ‘the placing of obstacles to entry or the use of other blocking measures or other means different from those which govern competition on the merits’.18 In doing so, the Court expressly limited the scope of applicability of the ‘as-efficient competitor principle’. This finding is confirmed in paragraph 264, where the Court emphasised that the Commission is not always required to demonstrate that the allegedly abusive conduct is capable of excluding an as-efficient competitor.19
In both cases, the Commission is required to take into account ‘all the relevant factual circumstances’, which include the conduct of the dominant undertaking but also ‘the market(s) in question or the functioning of competition on that or those market(s)’.20
16. Judgment of the Court of Justice, Google Shopping, para 164.
17. Judgment of the Court of Justice, Google Shopping, para 165.
18. Judgment of the Court of Justice, Google Shopping, para 167.
19. Judgment of the Court of Justice, Google Shopping, para 264.
20. Judgment of the Court of Justice, Google Shopping, paras 166, 168.
As applied to this case, the Court held that the Commission had rightly concluded, on the basis of the three factual circumstances mentioned above, that Google’s conduct excluded competing comparison shopping services by leveraging its dominance in the market for general search services.21 In other words, Google did not compete with other comparison shopping services on the basis of the merits of its own comparison shopping service, but made use of its dominance in the general search engine services market to exclude its competitors.22
The causal link requirement and the role of a ‘counterfactual analysis’
By its third ground of appeal, Google essentially argued that the Commission was required to conduct a so-called ‘counterfactual analysis’ – i.e. a comparison between the actual market circumstances including the allegedly abusive conduct and a hypothetical scenario in which the conduct did not take place but market circumstances were otherwise identical – in order to prove that the actual or potential anti-competitive effects were really caused by the conduct.23 The General Court had concluded that the Commission was not required to conduct a full counterfactual analysis, which amounts to proving actual effects, but must merely establish that the conduct in question causes potential anti-competitive effects.24
The Court of Justice observed as a matter of principle that there must be a causal link between the conduct at issue and its effects.25 The Commission can meet this causal link requirement by relying on ‘information obtained by observation of the actual evolution of the market’ and, if a correlation between the conduct and the competitive situation on the market is observed, additional information such as assessments of market participants. Based on such data, the Commission can establish a causal link between conduct and anti-competitive effects.26 It is for the dominant undertaking to challenge the Commission’s assessment of the potential or actual effects of the conduct by, for example, putting forward a counterfactual scenario.27 The Commission is therefore not required, in all cases and out of its own motion, to conduct a comprehensive comparison between actual market circumstances and a hypothetical ceteris paribus scenario.
The ‘as-effective competitor test’
Google’s fourth ground of appeal challenged the General Court’s claim that the Commission is not always required to conduct a so-called ‘as-efficient competitor test’ to establish an abuse.28 This test is a specific, narrower application of the ‘as-efficient competitor principle’, and essentially involves a quantitative assessment of whether a hypothetical competitor that is just as efficient as the dominant undertaking could charge, without making a
21. Judgment of the Court of Justice, Google Shopping, para 172.
22. Judgment of the Court of Justice, Google Shopping, para 171.
23. Judgment of the Court of Justice, Google Shopping, para 212.
24. Judgment of the General Court, Google Shopping, paras 377–378.
25. Judgment of the Court of Justice, Google Shopping, para 224.
26. Judgment of the Court of Justice, Google Shopping, para 225.
27. Judgment of the Court of Justice, Google Shopping, paras 227–228.
28. Judgment of the General Court, Google Shopping, paras 538–539.
loss, its consumers the same prices as those charged by the dominant undertaking.29 The General Court held that this test was inappropriate for assessing non-price-based conduct such as self-favouring.30 Additionally, the General Court observed that it would be impossible to analyse the relative efficiency of competitors in a market where competition is already distorted.31
Google argued on appeal that the General Court had made a legal error by not requiring the Commission to prove that the difficulties of Google’s competitors in attracting user traffic were not due to their own inefficiency.32 Google relied in this regard on the abovementioned principle that Article 102 TFEU does not aim to protect less efficient competitors.33
The Court of Justice, however, ruled that although the objective of Article 102 TFEU is not to ensure that less efficient competitors remain on the market, ‘it does not follow that any finding of an infringement under that provision is subject to proof that the conduct concerned is capable of excluding an as-efficient competitor’.34
The Court clarified this somewhat puzzling contrast by noting that the assessment of whether the conduct is capable of foreclosing an as-efficient competitor, ‘appears, in particular, to be relevant, where the dominant undertaking submitted, during the administrative procedure, on the basis of supporting evidence, that its conduct was not capable of restricting competition and, in particular, of producing the alleged foreclosure effects’.35 In that case, the Commission is ‘required to assess the possible existence of a strategy aiming to exclude competitors that are at least as efficient as the dominant undertaking from the market’.36 More generally, the Commission could be required to apply an as-efficient competitor test ‘where that test is relevant’.37
As applied to this case, the Court held that the Commission lawfully found that the competing comparison shopping services were not able to compensate for Google’s self-favouring of its own service.38 The Court concluded by noting that Google had only made ‘allegations in principle’ and that the General Court was right to state that it was not possible for the Commission to obtain objective and reliable information about the efficiency of Google’s competitors, mostly because market conditions were already substantially distorted by the presence of a (highly) dominant undertaking.39
29. Germain Gaudin and Despoina Mantzari, ‘Google Shopping and the As-Efficient-Competitor Test: Taking Stock and Looking Ahead’, Journal of European Competition Law & Practice 13, 2022, pp. 125–135, p. 128.
30. Judgment of the General Court, Google Shopping, paras 538–539.
31. Judgment of the General Court, Google Shopping, paras 540–541.
32. Judgment of the Court of Justice, Google Shopping, para 252.
33. Judgment of the Court of Justice, Google Shopping, para 253.
34. Judgment of the Court of Justice, Google Shopping, para 264.
35. Judgment of the Court of Justice, Google Shopping, para 265.
36. Judgment of the Court of Justice, Google Shopping, para 265.
37. Judgment of the Court of Justice, Google Shopping, para 266.
38. Judgment of the Court of Justice, Google Shopping, para 267.
39. Judgment of the Court of Justice, Google Shopping, para 268.
The Bronner criteria and the effective enforcement of Article 102 TFEU
The first notable contribution of the Google Shopping judgment is the Grand Chamber’s unequivocal statement that the Bronner criteria do not apply to self-favouring and, more generally, situations in which the dominant undertaking has already granted access to its own infrastructure. This finding is fully in line with the Court’s Third Chamber judgment in Slovak Telekom, which held that the Bronner criteria do not apply to conduct which pertains to the conditions for access, rather than a refusal to grant access as such.40 Nonetheless, in view of the unclear status of self-favouring under Article 102 TFEU, it is important that the Court settled this lack of clarity regarding the applicable legal test.
Applying the Bronner criteria to self-favouring would, in our view, have disproportionately affected the enforceability of Article 102 TFEU. As the Court of Justice as well as Advocate General Kokott emphasised, the strict ‘indispensability’ criterion in Bronner was justified by the special circumstances of an express refusal to deal with another undertaking, since any obligation imposed by Article 102 TFEU will interfere with the freedom of contract.41 To apply the indispensability criterion to cases involving unequal treatment through self-favouring would, as Kokott observed, ‘unduly restrict the practical effectiveness of Article 102 TFEU’.42
The first notable contribution of the Google Shopping judgment is the Grand Chamber’s unequivocal statement that the Bronner criteria do not apply to selffavouring and, more generally, situations in which the dominant undertaking has already granted access to its own infrastructure
40. Judgment of the Court of Justice of 25 March 2021, Slovak Telekom v. Commission (C-165/19, EU:C:2021:239, para 59).
41. Advocate General Kokott’s Opinion of 11 January 2024 in Google Shopping (C-48/22, EU:C:2024:14, points 84–87); judgment of the Court of Justice, Google Shopping, paras 90–91.
42. Opinion in Google Shopping, para 88.
It is sometimes argued that confining the Bronner test to outright refusals to deal, while applying a less strict test to the conditions of access, creates a perverse incentive for dominant undertakings. They would be incentivised to refuse access to their own infrastructure and services altogether, instead of granting at least some form of access to other undertakings. In the latter case, the dominant undertaking would be obliged to ensure non-discriminatory treatment, while an outright refusal to deal would virtually immunise the dominant undertaking from antitrust enforcement because the Bronner criteria, and the ‘indispensability’ criterion in particular, are notoriously hard to meet.
However, in our view this argument does not withstand close scrutiny. It presumes that the undertaking already has a dominant position upon deciding whether or not to refuse access to its infrastructure or services, and that not granting access will not harm its dominance. Refusing access to its infrastructure altogether, however, will often either prevent an undertaking from becoming dominant in the first place, or least prevent it from maintaining its dominance. While the decision not to grant access to a service or infrastructure may indeed shield an undertaking from Article 102 TFEU enforcement, this will also make it less likely that the undertaking becomes dominant or is able to maintain its dominance.
In rejecting the applicability of the Bronner criteria, therefore, the Court of Justice in our view took an approach that is both principled and pragmatic. It respected the spirit of the Bronner criteria by restricting their applicability to the specific circumstances of the case that gave rise to them. In doing so, moreover, the Court safeguarded the effective enforcement of Article 102 TFEU by refusing to impose the strict ‘indispensability’ requirement on a much wider range of types of conduct.
‘Competition on the merits’, novel theories of harm and the causal link requirement
As we explained above, the Court of Justice ruled that the Commission was allowed to classify Google’s conduct as deviating from competition on the merits. The Commission, ‘as a rule’, should demonstrate that the conduct of a dominant undertaking was capable of excluding equally efficient competitors by deviating from competition on the merits. However, the Commission is also allowed to establish an abuse if the conduct of the dominant undertaking impedes potential competitors at an earlier stage, by placing obstacles to market entry and preventing the growth of competition.43 In the next section, we discuss these considerations in some more depth.
First, however, we want to highlight the Court’s conclusion that the Commission should take into account ‘all the relevant factual circumstances’ to demonstrate that the conduct deviated from competition on the merits.44 This requirement aligns with recent case law in the Court that emphasised the importance of a contextual, case-bycase analysis.45
43. Judgment of the Court of Justice, Google Shopping, para 167.
44. Judgment of the Court of Justice, Google Shopping, paras 166, 168
45. See e.g. judgment of the Court of Justice of 27 March 2012, Post Danmark A/S v. Konkurrencerådet (Post Danmark I), (C-209/10, EU:C:2012:172, para 26); judgment of the Court of Justice of 19 April 2018, MEO v. Autoridade da Concorrência (C-525/16, EU:C:2018:270, para 28); judgment of the Court of Justice of 6 September 2017, Intel v. European Commission (C-413/14, EU:C:2017:632, paras 139–140.
At first sight, this requirement constrains the Commission’s discretion because the Commission cannot rely on general, abstract rules that classify some types of conduct as ‘abusive’ without taking into account the circumstances of each case. However, at the same time and arguably more importantly, the Court authorised the Commission to craft novel theories of harm and establish new forms of abuse, to the extent that the Commission indeed relies on all the relevant factual circumstances. The Commission is allowed, for example, to use ‘different analytical templates depending on the type of conduct’ in order to show ‘on the basis of specific tangible points of analysis and evidence’ that the conduct is capable of excluding equally efficient competitors.46
As (online) business models are constantly adapting, competition authorities should have the policy freedom to apply existing legal rules to wholly novel types of conduct
There is no requirement, therefore, that the Commission relies on a previously established substantive legal test or existing categories of abuse recognised in the case law. The Commission may further develop Article 102 doctrine by applying the abstract prohibition to abuse a dominant position to new cases, as long as it respects existing substantive principles and meets the evidentiary requirements mentioned above.47 In this sense, the Commission is not merely a law-applying institution, but also acts as a law-maker.48
This is a welcome clarification of the Commission’s competence to pursue cases based on new theories of harm, which is particularly important in light of the rapidly developing nature of digital markets. As (online) business models are constantly adapting, competition authorities should have the policy freedom to apply existing legal rules to wholly novel types of conduct. Paragraphs 165 to 168 of Google Shopping imply that the Commission indeed has this competence, without jeopardising the EU Courts’ ability to review Commission decisions on their compatibility with the substantive principles and evidentiary requirements as developed in the case law.
The same applies, in our view, to the Court’s application of the causal link requirement. As the General Court had held, the Commission cannot reasonably be required to prove how the market would have developed in the absence of the dominant undertaking’s conduct. This will often be an ‘arbitrary or even impossible exercise if that counterfactual scenario does not really exist for a market that originally had similar characteristics to the market or markets in which those practices were implemented’.49
46. Judgment of the Court of Justice, Google Shopping, para 166.
47. See to this effect, in response to the General Court’s judgment in Google Shopping, Justin Lindeboom, ‘Rules, Discretion, and Reasoning According to Law: A Dynamic-Positivist Perspective on Google Shopping’, Journal of European Competition Law & Practice 13, 2022, pp. 63–74.
48. See Justin Lindeboom, ‘Reason and Fiat in the Google Shopping Case’, Kluwer Competition Law Blog, 28 March 2024.
49. Judgment of the General Court, Google Shopping, para 377.
The Court of Justice therefore merely required the Commission to supplement the finding of a correlation between the conduct at stake and the modification of the conditions of competition with additional evidence in order to demonstrate a causal link.50 Contrary to Article 101 TFEU, the case law of the EU Courts never required the Commission to identify a comprehensive and credible counterfactual scenario for the purpose of Article 102 TFEU, and Google Shopping continues this approach. This makes sense from both an economic and a legal perspective. In abuse cases the appropriate counterfactual scenario is often epistemically inaccessible, simply because the presence and conduct of a dominant undertaking is likely to affect the conditions of competition to such an extent that we cannot credibly reconstruct a hypothetical scenario in which the conduct did not take place but which otherwise developed identically.
What the Court did instead is essentially a distribution of the evidential burden of proof, as Pablo Ibanez Colomo noted.51 While it is for the Commission to establish a causal link, this burden of proof does not require the Commission ‘systematically to use any single tool to prove the existence of such a causal link’.52 By requiring the Commission to demonstrate a causal link without necessarily conducting a full-fledged counterfactual analysis, and by allowing the dominant undertaking to present such a counterfactual in defence, the Court again provided a pragmatic approach to the evidentiary requirements of Article 102 TFEU that is also consistent with the principles from earlier case law.
The ‘as-efficient competitor principle’ and the objectives of Article 102 TFEU
In regard to the ‘as-efficient competitor principle’, the judgment of the Court of Justice seems to send some mixed signals. On the one hand, the Court affirmed that Article 102 TFEU does not aim to prevent the departure from the market or the marginalisation of competitors which are ‘less efficient and so less attractive to consumers from the point of view of, among other things, price, choice, quality or innovation’.53 But at the same time it expressly stated that an abuse may also be found if the dominant undertaking prevents new competitors, which may not yet be equally efficient, from entering the market,54 and it explicitly confirmed that the Commission is not always required to prove that the dominant undertaking’s conduct is capable of excluding an as-efficient competitor.55
Accordingly, we respectfully disagree, as a factual matter, with Pablo Solana Díaz’s conclusion that Google Shopping essentially requires an ‘effort to establish whether, given the content and context of the conduct, its objective aims or overall logic are to foreclose equally efficient competitors’.56 This conclusion ignores paragraphs 167 and 264 of the Google Shopping judgment.
50. Judgment of the Court of Justice, Google Shopping, para 225.
51. Pablo Ibáñez Colomo, ‘Case C- 48/22 P, Google Shopping: great cases make… for carefully crafted judgments’, Chillin’Competition, 16 September 2024.
52. Judgment of the Court of Justice, Google Shopping, para 228.
53. Judgment of the Court of Justice, Google Shopping, para 164.
54. Judgment of the Court of Justice, Google Shopping, para 167.
55. Judgment of the Court of Justice, Google Shopping, para 264.
56. Pablo Solano Díaz, ‘A Hopeful Reading of Android Auto and Google Shopping. Content, Context and Equally Efficient Competitors: Google and Alphabet (C-48/22 P)’, EU Law Live, 12 September 2024 (emphasis in original).
The Court of Justice was legally and economically correct not to elevate the asefficient competitor principle to a universal principle of Article 102 TFEU
Moreover, in our view the Court of Justice was legally and economically correct not to elevate the as-efficient competitor principle to a universal principle of Article 102 TFEU. This is what recent case law had suggested by emphasising the fact that Article 102 TFEU is not intended to prevent less efficient competitors from leaving the market.57 The Court’s corrective clarification in Google Shopping is the right approach for two reasons.
First, Article 102 TFEU aims to protect ‘competition’, not ‘competition among equally efficient competitors’. Since competitors less efficient than the dominant undertaking also exert competitive pressure to the benefit of consumers,58 and Article 102 TFEU imposes a ‘special obligation’ on dominant undertakings not to further weaken competition,59 there is no principled reason why Article 102 TFEU should only protect as-efficient competitors.60 In this regard, the as-efficient competitor principle is a legal formalism.61 We submit that this rule mainly serves as a heuristic device to avoid false positive outcomes in situations where less efficient competitors leave the market not due to the dominant undertaking’s conduct, but because they are less attractive to the consumer. However, this does not mean that the exclusion of less efficient competitors which is the result of the dominant undertaking’s conduct cannot be abusive, which indeed the Court of Justice confirmed in this judgment.
57. Judgment of the Court of Justice, Post Danmark I, para 21; judgment of the Court of Justice, Intel v. European Commission, para 133; judgment of the Court of Justice of 12 May 2022, Servizio Elettrico Nazionale v. Autorità Garante della Concorrenza e del Mercato (C377/20, EU:C:2022:379, para 45).
58. See e.g. Steven Salop, ‘Exclusionary Conduct, Effect on Consumers, and the Flawed Profit-Sacrifice Standard’, 73 Antitrust Law Journal, 2006, pp. 311–374, 328–329; Ioannis Lianos, ‘The Price/Non Price Exclusionary Abuses Dichotomy: A Critical Appraisal’, Concurrences, 2009.
59. Judgment of the Court of Justice, Google Shopping, para 163.
60. See also e.g. judgment of the Court of Justice of 6 October 2015, Post Danmark A/S v Konkurrencerådet (Post Danmark II) (C-23/14, EU:C:2015:651, paras 59–60); European Commission, ‘Enforcement Priorities in Applying Article 82 EC Treaty to Abusive Exclusionary Conduct by Dominant Undertakings’ [2009] OJ C45/7, para. 24; European Commission, ‘Draft Guidelines on the application of Article 102 TFEU to abusive exclusionary conduct by dominant undertakings’ [2024], para 144.
61. Justin Lindeboom, ‘Formalism in Competition Law’, Journal of Competition Law & Economics 18, 2022, pp. 832–880, p. 866.
Moreover, in some markets it is virtually impossible for competitors to be as efficient as the dominant undertaking, precisely because the latter has achieved scale advantages that cannot be duplicated at least in the short or medium term. In such a situation, the dominant undertaking is not punished from having reached a superior degree of efficiency, but simply may not abuse its lawfully acquired dominance to prevent potential and emerging competitors from challenging its dominance. In this regard, paragraph 167 of the Court’s judgment emphasises that Article 102 TFEU expressly aims to ensure open and contestable markets.
Consequently, we would also disagree in this respect with Pablo Solana Diaz’s earlier Op-Ed on Advocate General Kokott’s Opinion in Google Shopping, in which he argued that Article 102 TFEU should not ‘pursue objectives other than protecting equally efficient competitors’ and that ensuring the contestability of markets is ‘alien to competition law and should be fostered by purpose-specific regulation (such as […] the Digital Markets Act)’.62 In fact, up until 2012 the as-efficient competitor principle as a general principle of Article 102 was foreign to the case law. In Google Shopping, the Court of Justice confirmed that its relatively recent introduction into the Article 102 case law should not be read as providing an all-encompassing philosophy of Article 102 TFEU.
The question that Google Shopping leaves on the table is the following. How should we determine in which circumstances the as-efficient competitor principle is, or rather is not, applicable? In this respect the judgment remains unclear, which may be caused by the fact that the Court was keen to both confirm its earlier case law and emphasise the limits of the as-efficient competitor principle. In paragraphs 164 to 167, the Court suggested that the as-efficient competitor principle primarily applies in cases about the (alleged) exclusion of existing competitors on the market, while it does not apply to cases concerning the exclusion of potential or emerging competitors that are not yet equally efficient. In paragraphs 264 to 268, the Court noted that the as-efficient competitor test appears in particular (such caution on part of the Court!) to be relevant if the dominant undertaking has casted sufficiently substantiated doubt on the capability of its conduct to restrict competition.
The legacy of the Google Shopping case and the Digital Markets Act
As we mentioned at the start of this contribution, the Google Shopping judgment marks the end of a 14-year procedure. As Ruben Elkerbout, Philine Wassenaar and Saimi Merenlahti observed in their commentary, however, this judgment may just as well be regarded as the start, rather than the end, of an era. For one, this is because comparison shopping services are now able to sue Google before national courts throughout Europe for damages suffered during the entire period of abuse.63
62. Pablo Solano Díaz, ‘Opinion in Google Shopping: Growing and trimming Occam’s beard and cutting oneself on the way’, EU Law Live, 17 January 2024.
63. Ruben Elkerbout, Philine Wassenaar and Saimi Merenlahti, ‘The End or the Beginning of an Era? The Court of Justice Delivers its Verdict in the Google Shopping Case’, The Platform Law Blog, 17 September 2024.
Furthermore, the prohibition of anti-competitive self-favouring by now has been incorporated into the Digital Markets Act, which contains a per se prohibition for designated gatekeepers to favour their own products and services over similar products and services of third parties.64 This regulatory prohibition ‘is a direct translation of the Google Shopping theory of harm into regulation’, as Jasper van den Boom rightly stated.65 The Digital Market Act of course applies only to the limited set of gatekeepers that includes, for now, Alphabet (Google), Amazon, Apple, Booking.com, ByteDance, Meta and Microsoft. At the same time, the Digital Markets Act deliberately contains no requirement to prove actual or potential anti-competitive effects, nor an efficiency defence for gatekeepers, such that the enforcement of this provision against self-favouring conduct by gatekeepers is expected to be faster than the application of Article 102 TFEU.
This brings us to a final observation on the effective enforcement of Article 102 TFEU. As we noted above, the Google Shopping judgment upholds the main principles of Article 102 TFEU – further developing them where appropriate – while also recognising the importance of effective and flexible enforcement. It allows the Commission a sufficient degree of flexibility to prove to the requisite legal standard that the conduct of a dominant undertaking deviates from competition on the merits and is capable of restricting competition.
At the same time, the Court emphasises that the Commission is required to take into account all the relevant circumstances of the individual case. This ‘all-things-considered’ approach is one of the main reasons why recent cases involving Article 102 TFEU have been very time-consuming. Indeed, the recently published Draghi report points at the fact that antitrust cases take too long and are insufficiently predictable for companies.66 While the Court of Justice in Google Shopping offered the Commission, as a general manner, enough flexibility to enforce Article 102 TFEU against future instances of selffavouring, it remains to be seen whether such cases can be pursued quickly and effectively, without harming predictability, legal certainty and effective judicial review.
The Google Shopping judgment upholds the main principles of Article 102 TFEU – further developing them where appropriate –while also recognising the importance of effective and flexible enforcement
64. Art. 6(5) of Regulation (EU) 2022/1925 on contestable and fair markets in the digital sector, OJ 2022, L 265, p. 1.
65. Jasper van den Boom, ‘Winners & Losers: Game Set and Match in Google Shopping?’, SCiDA Blog, 7 September 2024.
66. The Future of European Competitiveness: Part B: In-depth Analysis and Recommendations (September 2024), 304.
Google Shopping will have a lasting impact as a landmark decision on the prohibition of abuse of dominant position, fleshing out a number of important requirements for establishing an abuse of dominance in a judgment that is principled and pragmatic alike
Google Shopping will have a lasting impact as a landmark decision on the prohibition of abuse of dominant position, fleshing out a number of important requirements for establishing an abuse of dominance in a judgment that is principled and pragmatic alike. Moreover, regardless of how this judgment will impact future cases based on Article 102 TFEU itself, the Google Shopping case will live on in the Digital Markets Act.67
67. For a political economy perspective on the relationship between Google Shopping and the Digital Markets Act, see Justin Lindeboom, ‘Google Android, Google Shopping and the Digital Markets Act: Three Sides of the Same Countermovement’ in Lewis Reed and Pablo Solano Díaz (eds.), Symposium: The Impact of the Google Android Judgment (EU Law Live, December 2022).