The European Court of Justice upholds the €2.424 billion fine imposed on Google
The recent ruling by the Court of Justice of the European Union (CJEU) has highlighted the adverse effects that the dominant position of large companies can have on small businesses . The Court upheld the €2.424 billion fine imposed by the European Commission on Google for abuse of its dominant position in the general internet search market.
To better understand how this situation affected small businesses in our region, we consulted our legal partner, Heras Sasot Abogados.
The Court confirms that Google's conduct had a significant impact on small businesses , due to:
- Visibility reduction
- Competitive disadvantage
- Increased costs
- Dominnate platform dependency
- Reduction of innovation
- Effects on prices
Heras Sasot has welcomed the CJEU ruling, emphasizing its commitment to protecting the competition of local businesses and consumers in the digital single market. " This decision reaffirms the importance of guaranteeing non-discriminatory treatment in digital markets (e-commerce), thus strengthening the competitiveness of SMEs in areas like Bajo/Baix Cinca ."
Following this ruling, Google will have to be more transparent in its business practices and will be under close scrutiny from the authorities, who will impose further sanctions if the abuse of its dominant position is repeated.
Reduced Visibility: The CJEU ruling highlights how Google favored its own product comparison service, Google Shopping, to the detriment of competitors. This practice reduced the visibility of small businesses in search results, making it harder for consumers to find them.
Competitive Disadvantage: Small businesses, lacking the resources to compete on a level playing field, are at a disadvantage compared to the practices of dominant companies. Google's ability to prioritize its own products creates significant barriers to entry for smaller competitors.
Increased Costs: Unfavorable conditions imposed by dominant companies can increase the operating costs of small businesses. Higher fees for using platforms or services reduce these businesses' profit margins, affecting their sustainability.
Dependence on the Dominant Platform: Small businesses' reliance on dominant platforms like Google or Amazon limits their ability to diversify their sales channels. This dependence increases their vulnerability to changes in platform policies, which can negatively impact their operations.
Reduced Innovation: A lack of effective competition reduces the incentives for dominant firms to innovate. This limits growth opportunities for smaller businesses and reduces the variety of products and services available to consumers.
Effects on Prices: The ability of dominant companies to set higher prices due to a lack of alternatives negatively impacts small businesses. These businesses are forced to adjust their prices to remain competitive, thus reducing their profit margins.
Links of interest regarding the ruling:
Page 4 of the judgment: "The countries affected were Belgium, the Czech Republic, Denmark, Germany, Spain , France, Italy, the Netherlands, Austria, Poland, Sweden, the United Kingdom and Norway . "
>> LINK 1
>> LINK 2
