US lawsuit against Google: Parallels to the EU ruling 2017?

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 20 October 2020, a total of 11 states sued Google. The allegation: The online giant is accused of exploiting its dominant market position to disadvantage competitors in the advertising and comparison portal sectors. The plaintiffs claim that Google favours its own services, thereby significantly restricting competition in the comparison portal market. The US government even argued that Google had created "a wall around its search engine monopoly" with this practice. A 280-page ruling has now been handed down by Judge Amit Mehta, alleging a potential violation of American antitrust law by Google. What demands the US Department of Justice, as the plaintiff, will make remains unknown.

 Déjà-vu from the EU ruling against Google

In 2017, a ruling was also made against Google regarding very similar allegations: 

• Violation of EU antitrust law. This means:

• Preferential treatment of its own service (Google Shopping)

• Disadvantage to competitors (third-party comparison portals)

When the verdict against Google was handed down 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, this means that competing price comparison services are no longer to be disadvantaged. Google's solution was and still is today the Google CSS (Comparison Shopping Service) programme. This allows price comparison services to display ads in Google Shopping results, thereby promoting competition with Google's own shopping service. This is intended to give more providers the opportunity to showcase their products. 

The parallels between both rulings

The similarities between the EU case and the current US case are striking. The central allegations are particularly overlapping:

• Exploitation of the dominant market position

• Disadvantage to competitors

• Impairment of competition

While the EU has already imposed these allegations with high fines and demands for changes in practices and called for measures to remedy the deficiencies, the US case is still in an early stage, where no fines or mandatory changes are required yet. 

Is the Google CSS Partner Programme soon to 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 with the EU ruling from 2017 make it clear that such problems are not just a regional phenomenon - they affect the whole world. It remains to be seen what further actions the US authorities will take and whether these will lead to an outcome similar to that of the EU. A Google CSS programme in America? The ruling not only speaks against Google's shopping practices but also against Google's overall power in the search area. With an opening of the shopping channel, Google would not be rid of the US authorities. Nevertheless, similar topics are at stake in both rulings. It remains to be seen whether Google will react similarly to how it did in the EU and open advertisements towards third-party providers. 

What we already know: The decision of the US authorities could fundamentally change the digital economy and the way in which large tech companies are regulated in the future.