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Google Questions EU’s Math in Fight Over Record Fine

Aoife White

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Google claims the European Union unfairly ramped up a then-record 2.4 billion-euro ($2.6 billion) antitrust fine by hundreds of millions of euros using flawed number-crunching meant to punish the “gravity” of its alleged ill-treatment of shopping rivals.

The EU based its fine on part of Google’s revenue from 2016, then increased the basic penalty by “the highest multiplier” possible for a monopoly-type case and then increased that figure again, Google says in documents at the bloc’s General Court, where it’s slugging it out with the regulator over the 2017 levy.

Lawyers say the court clash will help set the scene for a broader crackdown on U.S. tech giants by Margrethe Vestager, the EU’s competition commissioner. Apple Inc. is separately battling her massive back-tax order and Amazon.com Inc. is currently being investigated for using data on third-party sellers on its platform to help its own sales.

Since the first decision in 2017, the European Commission has also levied separate fines against Google for unfairly linking apps to Android software and for thwarting advertising rivals.

The exact percentage of the multiplier used initially to increase Google’s fine is redacted in a print version of the report, placed outside the Luxembourg courtroom on the first part of a three-day hearing on the company’s appeal against the EU decision.

So-called multipliers are usually used to increase fines for cartels where companies are found guilty of colluding to cheat customers of suppliers, viewed as an extremely serious offense under EU antitrust rules.

“Even in the worst cartel fines” the “gravity multiplier rarely exceeds 20%,” according to Google.

While the EU cites Google’s high market shares and the economic importance of these markets they “do not justify such a high multiplier,” according to the company.

The EU in 2017 cited the need to set the penalty “at a level sufficient to ensure deterrence.”

That was “unjustified,” Google said, according to the report, arguing that it “cooperated constructively” with the EU and “did not conceal the practice at issue which rules out the need for a specific deterrence component.”

Google says it should never have been fined at all since the EU was using a new theory to weigh behavior the company could not have known was unlawful. The commission contends that there was nothing novel about its legal analysis and Google didn’t help the EU in any way that would have reduced the penalty.

To contact the reporter on this story: Aoife White in Luxembourg at awhite62@bloomberg.net

To contact the editors responsible for this story: Anthony Aarons at aaarons@bloomberg.net, Peter Chapman, Molly Schuetz

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