Google’s win in the EU antitrust fight comes when the tech giant is undergoing an antitrust trial in the US.

According to CNBC, the fine imposed on Google by the European Commission was a result of a 2019 case where Google was accused of abusing its market dominance through its product, AdSense for Search. Website owners use AdSense for Search to place ads on their web pages. The product allows users to optimize their websites for Google searches and ads to generate more revenue.

Restrictive Clauses

Google argued that it is an intermediary that lets advertisers place search ads on third-party websites.

The Commission had accused the search giant of abusing market dominance by imposing several clauses in its contracts with third-party websites. These clauses kept Google’s competitors from placing search ads on third-party websites.

The Commission fined Google $1.7 billion based on these claims, and the search giant filed an appeal against this ruling at the EU General Court.

Court Reasoning

On Wednesday, September 18, the EU General Court said that it upheld most of the findings that formed the basis of the ruling by the Commission. However, the court annulled the decision to impose the $1.7 billion fine on Google saying the Commission’s decision did not consider all relevant circumstances in assessing the contract clauses that it claimed were abusive.

“The Commission has also not demonstrated that the clauses in question had, first, possibly deterred innovation, next, helped Google to maintain and strengthen its dominant position on the national markets for online search advertising at issue and, last, that they had possibly harmed consumers,” Judges said.

Google expressed satisfaction with the ruling issued by EU’s second-highest court and said it will review it fully.

“This case concerns a very narrow subset of text-only search ads placed on a limited number of publishers’ websites. We made changes to our contracts in 2016 to remove the relevant provisions, even before the Commission’s decision. We are pleased that the court has recognized errors in the original decision and annulled the fine,” Google’s spokesperson said.

Possible Appeal

The EU Commission may decide to appeal the court’s ruling at the European Court of Justice. Several cases involving big tech companies in Europe and in the U.S. have concluded.

On September 10, Europe’s highest court upheld the $2.65 billion fine that the EU Commission imposed on Google for favoring its shopping comparison service. Review website Yelp has also sued Google over illegal monopoly in local search. Google’s ad technology is on the spot in an antitrust trial that commenced on September 9 in the US.

Last month, the tech giant faced a huge setback after a US court ruled that it is an illegal monopoly.

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The new law requires the video streaming platform to spin off from its Chinese parent company, ByteDance, by January 2025 or face a ban. The US government views ByteDance’s ties to China as a national security threat. However, ByteDance and TikTok have denied links to Chinese authorities multiple times.

Court Arguments

TikTok’s legal battle in the US started back in May 2024 when the social media platform filed a case to block the new law. At the time, the video streaming platform had termed the legislation unconstitutional.

TikTok argued that the new law would significantly impact freedom of speech for its 170 million US users. TikTok’s court case was heard by three court of appeals judges in Washington DC.

“This law imposes extraordinary speech prohibition based on indeterminate future risks,” Andrew Pincus, TikTok and ByteDance’s attorney said in court.

In his submission, the lawyer addressed concerns by the US government about Chinese authorities. He said ByteDance Limited is a Cayman Island holding firm and is not owned by China.

The judges challenged the submissions by Pincus, with Judge Sri Srinivasan saying that ByteDance was subject to China’s control. The lawyer argued that the US government had not alleged any wrongdoing on TikTok’s part and that the social media platform was being punished based on suggestions that issues may arise in the future.

Judge Ginsberg challenged this claim, arguing that the law targets all firms that are controlled by foreign adversaries, not just TikTok. The Judge also termed the law as an ‘absolute bar on the current arrangement of control’ of the firm, not the firm itself.

Impact of TikTok Split

TikTok has consistently denied sharing data from US users with Chinese authorities. The social media platform claimed that a breakup from ByteDance cannot happen without its closure. In court documents filed in June 2024, TikTok argued that a split would make it a shell.

TikTok’s Appeal Against US Divest or Ban Law Commences

The breakup will also mean that Americans can no longer share their views with TikTok’s global community. Free speech advocates have added their voice to the US divest-or-ban law. The advocates say if the law is implemented, it will set a precedent to oppressive regimes across the world and lead to violation of free speech rights.

“We shouldn’t be surprised if repressive governments the world over cite this precedent to justify new restrictions on their own citizens’ right to access information, ideas, and media from abroad,” Columbia University’s Knight First Amendment Institute staffer, Xiangnong Wang said.

The Institute has filed legal documents with the appeals court offering expertise with the aim of influencing the outcome of the TikTok appeal case. Wang accused lawmakers of being vague with respect to national security threats they claim TikTok poses to the US.

Digital content creators also argued that the law impedes their right to work with publishers of their choice.

Government’s Position

The Department of Justice will be arguing its case against TikTok. DoJ’s submissions will largely be based on data concerns. US lawmakers and government officials have raised alarm over possibilities that Chinese authorities could be using TikTok to spread misinformation to Americans.

In addition to the US, the UK government has also raised concerns over potential Chinese influence on TikTok. The UK has banned TikTok on government devices for fear of Chinese influence.

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