Google UK Tribunal: EU DMA Rules Factor in Damages Claim

• Comparison shopping sites Kelkoo and Ciao are seeking compensation from Google at the U.K. Competition Appeal Tribunal.
• The claimants argue that a recent European Commission decision under the Digital Markets Act (DMA) provides relevant reasoning for their claim against Google's alleged self-preferencing.
• Google contends that the DMA decision applies a different law and cannot determine if its 2017 shopping redesign fixed the problem, nor does it automatically imply damages under older rules.
• The European Commission previously fined Google $2.81 billion in 2017 for favoring its shopping service and issued another $534 million fine in July under the DMA for similar conduct.
• The tribunal must decide what Google's lawful conduct would have been to assess damages, navigating the interplay between traditional antitrust law and the new DMA framework.

This case underscores the critical debate over the retrospective application and interpretive influence of new regulations like the Digital Markets Act on existing antitrust disputes.

Comparison shopping platforms Kelkoo and Ciao are pursuing a compensation claim against tech giant Google before the U.K. Competition Appeal Tribunal (CAT). The dispute centers on allegations that Google unfairly favored its own shopping service, thereby disadvantaging rival platforms. At the heart of the current proceedings is whether a recent European Commission decision, issued under the new Digital Markets Act (DMA), should influence the tribunal's assessment of Google's past conduct.

Google contends that a finding of non-compliance with the European Union's new DMA rules does not automatically translate into an obligation to pay damages under older competition law frameworks. The company argues that the July European Commission ruling, which applied a different legal standard, cannot determine whether its 2017 redesign of its shopping service adequately resolved previous antitrust concerns. In 2017, the European Commission had imposed a substantial Google Shopping fine of $2.81 billion (2.42 billion euros), concluding that the company leveraged its dominant search position to grant its shopping service an unfair advantage, prominently displaying its own offerings while demoting rival comparison sites in ordinary search results. Google's subsequent response involved allowing competing comparison services to bid for placement within its shopping box, a move it presented as creating equal opportunities.

Kelkoo and Ciao, however, maintain that Google's shopping box itself continues to function as Google's own comparison shopping service. They assert that the reasoning underpinning the recent DMA decision by the European Commission provides crucial insight into why Google's shopping box still benefits from preferential treatment. While acknowledging that the July decision is not legally binding on the UK tribunal, the claimants argue its analytical framework helps illuminate the ongoing issues, reserving their right to initiate separate claims under the newer DMA legislation in the future. The UK Competition Appeal Tribunal Google is tasked with adjudicating these claims for compensation, rather than imposing further regulatory penalties on Google.

The Digital Markets Act (DMA) represents the European Union's comprehensive regulatory framework designed for its largest online platforms, aiming to prevent companies that control access to customers from stifling competition. A key provision of the DMA is its explicit prohibition against gatekeepers giving preferential treatment to their own services in search rankings, addressing EU antitrust self-preferencing. Google argues that these DMA obligations extend beyond the scope of traditional antitrust law, which typically necessitates a more detailed examination of how services compete and the actual impact of conduct on market competition. According to Google's legal counsel, the very essence of competition implies that Google should be able to favor its general search results over those of competitors like Microsoft's Bing.

Conversely, Kelkoo asserts that the DMA's ban on favoring a platform’s own services was directly informed by the original Google Shopping case. Kelkoo's legal representatives accuse Google of selectively focusing on the European Commission's finding of a violation while largely disregarding the substantive arguments and reasoning embedded within the DMA decision itself. In July, the European Commission levied an additional fine of $534 million (460 million euros) against Google for favoring its own services, including shopping, under the provisions of the Digital Markets Act application. This marked a significant enforcement action, with the law's first designated platforms having been required to comply with its mandates since March 2024. Other major U.S. technology firms have already adjusted their European operations to meet various DMA requirements; for instance, Apple announced support for alternative iPhone app marketplaces, and Meta introduced an option for users to utilize Messenger independently of their Facebook account information.

A central challenge for the UK Competition Appeal Tribunal in this Google Kelkoo Ciao damages claim is to determine what Google's conduct would have been had it operated lawfully, a prerequisite for assessing the claimants' losses. This case underscores the critical debate over the retrospective application and interpretive influence of new regulations like the Digital Markets Act on existing antitrust disputes. Google has also raised objections to the tribunal considering later design modifications, such as buttons allowing users to refine searches, which were not subject to examination during the initial trial phases. Kelkoo, however, dismisses the decisive impact of these buttons, suggesting their removal would not fundamentally alter the underlying issues.

The tribunal itself has probed the extent of the divergence between the two legal approaches – traditional antitrust principles and the newer DMA framework – noting similarities in how both distinguish between specialized and general search functions. This highlights the complex task facing courts in reconciling novel regulatory frameworks with established competition law principles, particularly concerning 'self-preferencing' practices. Kelkoo maintains that Google's display of products, prices, and merchant links constitutes comparison shopping, even when rival companies supply the advertisements. Google, however, counters that the more recent DMA decision employs a different definition of what constitutes a comparison shopping service. The outcome of this Google UK tribunal EU DMA rules case could significantly impact potential liabilities and defenses for digital platforms operating across various jurisdictions, as it navigates the interplay between historical conduct and evolving regulatory standards.

This case highlights the critical debate over the retrospective application and interpretive influence of new regulations like the Digital Markets Act on existing antitrust disputes and damages claims. Lawyers and compliance officers should monitor how courts reconcile new regulatory frameworks with established competition law principles, particularly regarding 'self-preferencing,' as it impacts potential liabilities and defenses for digital platforms operating across jurisdictions.

Source: Original reporting via Courthouse News