US lawsuit against Google: Parallels to the EU ruling 2017?
10 Sept 2024
10 Sept 2024
10 Sept 2024
5 min read
2017 marked a turning point in the history of the digital economy: The European Commission (EC) imposed a record fine of €2.42 billion against Google. The verdict? "Illegal preferential treatment of its own comparison shopping service (Google Shopping)." Now, 7 years later, a similar spectacle is unfolding in the USA.
The new verdict against Google in the USA
On October 20, 2020, a total of 11 states filed a lawsuit against Google. The accusation: The online giant is alleged to exploit its dominant market position to disadvantage competitors in the advertising and comparison portal sectors. The plaintiffs claim that Google favors its own services, significantly restricting competition in the comparison portal market. The US government even argued that Google has created "a wall around its search engine monopoly" with this practice. A 280-page ruling has now been issued by Judge Amit Mehta, in which Google is accused of a potential violation of US antitrust law. What requirements the US Justice Department as a plaintiff will demand is still unknown.
Déjà vu from the EU ruling against Google
In 2017, a ruling was made against Google regarding very similar accusations:
Violation of EU antitrust law. This means:
Favoring its own service (Google Shopping)
Disadvantaging competitors (third-party comparison portals)
When the ruling against Google was made by the European Commission (EC) in June 2017, not only was a record fine of €2.42 billion imposed, but Google was also required to change its practices within 90 days. Specifically, to ensure that competing comparison shopping services are no longer disadvantaged. Google’s solution to this was and still is the Google CSS (Comparison Shopping Service) program. This allows comparison shopping services to place ads in Google Shopping results, thus promoting competition with Google’s own shopping service. This is intended to provide more providers the opportunity to make their products visible.
The parallels between both rulings
The similarities between the EU case and the current US case are striking. Especially overlapping are the central allegations:
Exploitation of dominant market position
Disadvantaging competitors
Impairment of competition
While the EU has already imposed these allegations with high fines and requirements to change practices and called for measures to remedy the situation, the US case is still in an early stage, where no penalties or forced changes are yet required.
Will the Google CSS Partner Program soon be worldwide?
The current case in the USA raises doubts:
Does Google also unfairly exploit its dominant power against competitors in other segments?
Currently, one can only speculate about this. However, the parallels to the EU ruling of 2017 make it clear that such issues are not just a regional phenomenon – they affect the entire world. It remains to be seen what further measures the US authorities will take and whether these will lead to a result similar to that of the EU. A Google CSS program in America? The ruling speaks not only against Google Shopping practices but also against Google’s overall power in the search area. With an opening of the shopping channel, Google would not have escaped from the US authorities. Nevertheless, both rulings address similar issues. So, it remains to be seen whether Google will respond similarly as it did in the EU and open up advertising to third-party providers.
What we already know: The decision of the US authorities could fundamentally change the digital economy and the way large tech companies are regulated in the future.
2017 marked a turning point in the history of the digital economy: The European Commission (EC) imposed a record fine of €2.42 billion against Google. The verdict? "Illegal preferential treatment of its own comparison shopping service (Google Shopping)." Now, 7 years later, a similar spectacle is unfolding in the USA.
The new verdict against Google in the USA
On October 20, 2020, a total of 11 states filed a lawsuit against Google. The accusation: The online giant is alleged to exploit its dominant market position to disadvantage competitors in the advertising and comparison portal sectors. The plaintiffs claim that Google favors its own services, significantly restricting competition in the comparison portal market. The US government even argued that Google has created "a wall around its search engine monopoly" with this practice. A 280-page ruling has now been issued by Judge Amit Mehta, in which Google is accused of a potential violation of US antitrust law. What requirements the US Justice Department as a plaintiff will demand is still unknown.
Déjà vu from the EU ruling against Google
In 2017, a ruling was made against Google regarding very similar accusations:
Violation of EU antitrust law. This means:
Favoring its own service (Google Shopping)
Disadvantaging competitors (third-party comparison portals)
When the ruling against Google was made by the European Commission (EC) in June 2017, not only was a record fine of €2.42 billion imposed, but Google was also required to change its practices within 90 days. Specifically, to ensure that competing comparison shopping services are no longer disadvantaged. Google’s solution to this was and still is the Google CSS (Comparison Shopping Service) program. This allows comparison shopping services to place ads in Google Shopping results, thus promoting competition with Google’s own shopping service. This is intended to provide more providers the opportunity to make their products visible.
The parallels between both rulings
The similarities between the EU case and the current US case are striking. Especially overlapping are the central allegations:
Exploitation of dominant market position
Disadvantaging competitors
Impairment of competition
While the EU has already imposed these allegations with high fines and requirements to change practices and called for measures to remedy the situation, the US case is still in an early stage, where no penalties or forced changes are yet required.
Will the Google CSS Partner Program soon be worldwide?
The current case in the USA raises doubts:
Does Google also unfairly exploit its dominant power against competitors in other segments?
Currently, one can only speculate about this. However, the parallels to the EU ruling of 2017 make it clear that such issues are not just a regional phenomenon – they affect the entire world. It remains to be seen what further measures the US authorities will take and whether these will lead to a result similar to that of the EU. A Google CSS program in America? The ruling speaks not only against Google Shopping practices but also against Google’s overall power in the search area. With an opening of the shopping channel, Google would not have escaped from the US authorities. Nevertheless, both rulings address similar issues. So, it remains to be seen whether Google will respond similarly as it did in the EU and open up advertising to third-party providers.
What we already know: The decision of the US authorities could fundamentally change the digital economy and the way large tech companies are regulated in the future.
