WEBVTT - Google Appeals Record EU Antitrust Fine (Audio)

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<v Speaker 1>In June of this year, the European Commission imposed a

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<v Speaker 1>record fine of two point four billion euros on Google

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<v Speaker 1>for giving unfair advantage to its Comparison shopping service against

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<v Speaker 1>other Internet shopping services. It also ordered Google to change

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<v Speaker 1>the way it displays shopping services in its searches. But

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<v Speaker 1>in the wake of Intel's victory against the Commission in

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<v Speaker 1>Europe's High Court last week, Google has decided to appeal

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<v Speaker 1>the fine, setting up a court fight that could take

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<v Speaker 1>years to resolve. Here to talk with us about Google's

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<v Speaker 1>appeal is Jennifer Ree, senior litigation analyst for Bloomberg Intelligence.

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<v Speaker 1>Jennifer why is it that Google has decided, unlike a

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<v Speaker 1>lot of companies that have settled with the Commission, to

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<v Speaker 1>appeal this fine. Well, yeah, that's a good question, and

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<v Speaker 1>I guess that, you know, only Google really can say

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<v Speaker 1>why they've decided to do this, though it seems with

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<v Speaker 1>the Intel decision in a qualified sense, you know, that's

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<v Speaker 1>kind of good news, I think for Google, because what

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<v Speaker 1>it does is it sets up a court precedent in

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<v Speaker 1>Europe that where a theory of harm is based on

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<v Speaker 1>foreclosure of competitors, which is the case in both Intels

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<v Speaker 1>situation and in Google situation, that it can't just be

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<v Speaker 1>taken for granted that that foreclosure is anti competitive and

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<v Speaker 1>violates the laws, that an economic analysis needs to be

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<v Speaker 1>applied and all of the facts and circumstances need to

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<v Speaker 1>be um evaluated to understand whether really that causes harm

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<v Speaker 1>to markets. Jen a court spokeswoman, said that Google has

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<v Speaker 1>not asked for an interim order to suspend the EU decision,

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<v Speaker 1>which means that without an injunction, it's still obligated to

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<v Speaker 1>pay the fine and comply with other elements of the

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<v Speaker 1>June ruling. Can you imagine why they decided not to

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<v Speaker 1>ask for an injunction? That is right, they will have

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<v Speaker 1>to pay the fine and alter the way their shopping

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<v Speaker 1>services comparison shopping services are displayed. Um. I think it's

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<v Speaker 1>likely that they did not seek an injunction because that

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<v Speaker 1>standard is very high and it's unlikely that they could

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<v Speaker 1>have met it. They would have had to show that

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<v Speaker 1>there is urgency and that they would have suffered irreparable

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<v Speaker 1>harm had they had to comply now, and they have

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<v Speaker 1>to pay this fine which they can't afford, and changing

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<v Speaker 1>these shopping services, it just seems unlikely. They would have

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<v Speaker 1>been able to prove in court that having to do

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<v Speaker 1>these things now, as they weighed out the appeal, would

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<v Speaker 1>have caused urgent and irreparable harm to their business. So, Jenny,

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<v Speaker 1>it's a it's the European court system, so it's not

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<v Speaker 1>one all of us are as familiar with what what

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<v Speaker 1>happens now? Uh? And and how can we expect this

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<v Speaker 1>case to move along? Well, it will move along slowly,

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<v Speaker 1>that much we know. So they have appealed to the

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<v Speaker 1>General Court that is sort of the lower court. Compared

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<v Speaker 1>to the lower court here in the U S. It

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<v Speaker 1>would be the first decision. And Um. In the Intel's case,

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<v Speaker 1>they had a negative decision from the lower court. In

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<v Speaker 1>other words, that court upheld the European Commission's assessment and

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<v Speaker 1>then they appealed to the European Court of Justice. So

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<v Speaker 1>that would be like our appellate court. And this is

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<v Speaker 1>the court and tells case that that that sent it

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<v Speaker 1>back and said this needs more evaluation. Um, so we'll

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<v Speaker 1>now wait for the General Court decision. And it could

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<v Speaker 1>uphold what the European Commission has done here with respect

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<v Speaker 1>to requiring a fine endo conduct remedy or it or

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<v Speaker 1>it could say that this needs to be reevaluated, or

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<v Speaker 1>reverse things, or even lower the fine. Last week, EU

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<v Speaker 1>official said the plan that Google recently filed to comply

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<v Speaker 1>with the European regulations appeared to be a step in

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<v Speaker 1>the right direction. So Google is moving forward, changing according

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<v Speaker 1>to what the European Commission said, and still fighting at

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<v Speaker 1>the same time. So if it wins, it'll just be

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<v Speaker 1>able to go back to what it did before. Will

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<v Speaker 1>that be too much of a upheaval? Well, I think,

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<v Speaker 1>you know, I think that's a lot. We're talking way

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<v Speaker 1>down the road into a lot of speculation, and frankly,

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<v Speaker 1>technology moves so quickly. These worlds move so quickly. Things

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<v Speaker 1>could be so different by the time this decision comes out. Um,

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<v Speaker 1>they have on ahead because they will be fined quite

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<v Speaker 1>a lot if they don't make that change to the

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<v Speaker 1>way they display their shopping services. So I think that's

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<v Speaker 1>probably part of the reason they've gone ahead, and also

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<v Speaker 1>because they haven't sought an injunction. Well, Jenn, let's take

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<v Speaker 1>a little bit more into what we don't know exactly

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<v Speaker 1>what they're going to end up arguing. And you know,

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<v Speaker 1>only really Google knows its reasoning, as you said before,

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<v Speaker 1>But when you look at the way the European Commission

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<v Speaker 1>looks at anti trust cases, what do you think they

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<v Speaker 1>might be arguing when they get when they challenge this, Well,

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<v Speaker 1>I think they could be arguing a few things. First,

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<v Speaker 1>that if you look at the totality of the circumstances,

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<v Speaker 1>that what they're doing here is ultimately pro competitive or

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<v Speaker 1>beneficial or or simply doesn't amount to a harm to

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<v Speaker 1>the market that violates the European rules for abuse of dominance.

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<v Speaker 1>That could be one thing, um, you know. Another could

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<v Speaker 1>be that that as a vertically integrated company that they

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<v Speaker 1>don't where where they have the search and they have

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<v Speaker 1>also the comparison shopping service, says that they don't necessarily

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<v Speaker 1>have an obligation to work with their competitors, that they

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<v Speaker 1>haven't excluded their competitors completely, the competitors have access and

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<v Speaker 1>are listed in the Google search results, and that it's

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<v Speaker 1>not necessarily harmful for um Google to be giving favorability

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<v Speaker 1>to its own products. It's it's it seems sort of.

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<v Speaker 1>I don't know if Europe is used to having these

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<v Speaker 1>huge fines and then appeals by these companies that take

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<v Speaker 1>forever because these you know, the European companies haven't appealed

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<v Speaker 1>as much. Well, you know, first, I think we have

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<v Speaker 1>to remember that these huge fines are kind of far

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<v Speaker 1>and few between. There have been some really huge fines,

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<v Speaker 1>but the biggest ones, um, since this Google find was

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<v Speaker 1>Intel and that was back in two thousand nine, so

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<v Speaker 1>and that was appealed. Other finds haven't been appealed in

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<v Speaker 1>the past, but they really are are sort of foreign,

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<v Speaker 1>few between. There's not a lot of record to go

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<v Speaker 1>on here. Well, Jenna, just about thirty seconds. Do you

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<v Speaker 1>think that, um, you know a lot of American companies

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<v Speaker 1>have been critical of the UU. Do you think that

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<v Speaker 1>this might start a trend of American companies with this

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<v Speaker 1>and Intel fighting back against the EU? You know, it

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<v Speaker 1>certainly could be. It certainly could be some push to

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<v Speaker 1>try to see if through these appeals, the courts in

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<v Speaker 1>the Europe come out with decisions that are aligned a

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<v Speaker 1>bit more with your with the US approach to antitrust,

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<v Speaker 1>which is in this case and these abusive dominance cases

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<v Speaker 1>is actually quite different. Well, our thanks to Jennifer Ree

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<v Speaker 1>of Bloomberg Intelligence for being with us today on Bloomberg

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<v Speaker 1>Law