Judgment of the Court of Justice of the EU in Case C-738/22 P | Google and Alphabet v Commission

The appeal brought by Google and its parent company Alphabet against the judgment of the General Court is dismissed, thereby confirming the penalty imposed for Google Search’s abuse of a dominant position in the context of the Android operating system

In 2018, the European Commission adopted a decision in which it concluded 1 that Google had abused its dominant position by requiring, in particular through pre-installation agreements and licensing conditions for certain apps, that its search engine, Google Search, and its Chrome browser be promoted on mobile devices running the Android operating system, which is also provided by Google. 2 It therefore found a single and continuous infringement covering the whole of that conduct and imposed an overall fine on Google of €4 342 865 000, with Alphabet jointly and severally liable as to €1 921 666 000.

The General Court of the European Union, at first instance, 3 confirmed the classification as a single and continuous infringement but annulled the part of the Commission’s decision relating to the conduct that consisted in making the conclusion of revenue share agreements with certain original equipment manufacturers and mobile network operators conditional on the exclusive pre-installation of Google Search on a predefined portfolio of devices. Following that partial annulment, the General Court reassessed the penalty and set Google’s fine at €4 125 000 000, in respect of which Alphabet was to be jointly and severally liable as to €1 520 605 895.

The Court of Justice dismisses the appeal brought by Google and Alphabet against that judgment of the General Court, thereby confirming the penalty imposed on them, as revised by the General Court, for their anticompetitive practices relating to the Android operating system.

First, the General Court did not err in law when assessing the anticompetitive effects of the pre-installation conditions laid down by the Android agreements. The Court of Justice considers that the General Court was entitled to take account of the relevant economic context in its entirety, including the revenue share agreements, without it being necessary systematically to carry out any counterfactual analysis in order to establish an infringement of the prohibition of abuse of a dominant position. It also confirms that the General Court was entitled to find that there was a status quo bias in favour of pre-installed apps and that Google and Alphabet had not demonstrated that user preferences or the alleged quality of their services alone accounted for the behaviours observed.

Second, the General Court did not err in law by confirming the Commission’s assessment of the pre-installation conditions laid down by the Android agreements. Demonstrating an abuse of a dominant position is not conditional in any case on proof of a capability to foreclose only as-efficient competitors. Given the particular characteristics of the digital markets concerned, the General Court was entitled to conclude that those practices were liable to restrict competition and strengthen barriers to entry without applying that test.

Third, the General Court did not err in law by confirming the Commission’s assessment of the anti-fragmentation agreements. Those agreements were liable to limit commercial markets for non-compatible Android versions and thus to strengthen Google’s dominant position. A counterfactual analysis was not necessary in the circumstances of this case, the anticompetitive effects of the conduct having been sufficiently established.

Fourth, the General Court was entitled to reject the objective justifications put forward by Google in relation to the anti- fragmentation agreements and to maintain the classification of the infringement as single and continuous despite the partial annulment in respect of certain revenue share agreements, since the remaining abuses still formed part of the same anticompetitive strategy.

Lastly, the Court of Justice endorses the exercise by the General Court of its unlimited jurisdiction to set the amount of the fine, ruling that its reasons were sufficient and that the procedural principles invoked by Google and Alphabet, including rights of defence, were adhered to.

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