Google’s appeal against EU record £3.8bn fine begins – how did we get here?
Three years after receiving a record fine from the European Commission alongside an order to stop abusing its control of the Android operating system, Google is set to have its day in court.
Back in 2018 the company was fined €4.34bn (£3.8bn) for forcing phone makers to pre-install apps including Google Search and Chrome to the exclusion of other search engines and web browsers.
The fine was a fraction of the €116bn (£99bn) parent company Alphabet recorded in revenues that year, but the real cost to the company was the threat to its future income if smartphones landed in consumers’ hands without Google apps already installed.
Google’s five-day appeal against the decision is being heard at European Court of Justice in Luxembourg, where the company hopes to have the Commission’s decision annulled in its entirety.
A failure to do so could completely reshape the smartphone landscape, but other challenges targeting Google inside the US pose a far more significant risk to the company and could lead to the search giant being broken up into several smaller businesses.
Google’s appeal will be heard in Luxembourg from Monday
Breaking up monopolies
While there are an over-abundance of comparisons between the oil industry of the late 19th century and the tech industry of today, the slow movement of regulators is one of the most striking similarities.
It was in 1890 that US Congress passed a law to tackle the monopolies which had sprung up over the preceding half century, but it took more than three decades for that law to be used to break up Standard Oil, a company which by 1904 controlled more than 90% of oil production in America.
Standard Oil’s business excelled due to its innovations in refining oil, but also because the company had rapaciously acquired rivals and used its commercial heft to strike deals with railroad companies (themselves a target for early antitrust action) at discounted rates which the remaining oil businesses could not compete with.
In a landmark ruling in 1911, the US Supreme Court upheld that Standard Oil was an illegal monopoly and ordered it to be broken up into 34 independent companies. Though that power is not available to the European Commission, there is a growing movement in the US calling for similar actions to be taken against tech giants whom some believe are guilty of the same anticompetitive practices.
Standard Oil controlled more than 90% of US oil production at its height
Modern antitrust law
Google is a very different company to Standard Oil, but the alleged unfairness of its practices – using its control of Android to force phone manufacturers who want to include the Google Play app store on their phones to also pre-install Google Search and Chrome – follows the same model of undermining rivals.
The investigation into Google coercing phone manufacturers formally began in 2015, although the Commission made its first enquiries about the company’s practices in 2013 when an association of Google’s rivals calling itself FairSearch lodged a complaint against its business practices.
The ruling came three years later in 2018 and now, three years later, Google’s appeal has reached the European Court of Justice. Thomas Vinje, counsel to FairSearch and partner at law firm Clifford Chance, told Sky News he expected there could be another appeal after the hearing in Luxembourg.
“Antitrust enforcement is not, on its own at least, sufficiently robust, sufficiently effective, to be able to address these really extraordinary concerns. I’m not sure the world has ever faced a situation where there is such a concentration of power in such a central element of today’s economy, and antitrust law is not up to the task,” he said.
“That is largely because they’re complex cases,” Mr Vinje explained.
“They’re more complex than rail roads or oil distribution – I’m not saying those are simple – but the issues faced in Big Tech today are a hell of a lot more complicated. So there is a hell of a lot more room for obfuscation… and dragging things out.
“So by virtue of the completely appropriate rights that defendants have in these cases, the cases just take too long.”
The Commission accused Google of attempting to cement the dominance of Google Search
What is Google’s response and appeal?
Google, which claims the most popular search term on rival search engines such as Bing is the word “Google” itself and which controls more than 90% of the market for web searches, disputes the Commission’s arguments about its dominance, although that won’t feature prominently in its arguments next week.
In a news briefing ahead of the hearing, the company explained to journalists that it believes a lot has changed in the years since the Commission issued its decision.
Key to Google’s appeal is the argument that its control ensures Android is a platform which can run across millions of smart devices made by different manufacturers, increasing the economic benefits for developers – including rival web browser makers such as Opera, which is supporting Google’s appeal – and ultimately consumers.
Google will note that a revenue sharing agreement it had with phone manufacturers and mobile network operators, cited as an illegal contractual restriction by the Commission, ended in 2014.
The company also strongly disputes the way that the Commission calculated the €4.34bn (£3.8bn) fine, something the Commission said was “calculated on the basis of the value of Google’s revenue from search advertising services on Android devices” inside the European Economic Area.
The US Department of Justice has filed charges against Google
What is the threat in the US?
Even if Google succeeds in getting the Commission’s decision annulled or amended, it faces three more challenges in the US which are backed by severe powers to tackle monopolies.
The first complaint was filed last October in a case led by the Trump administration’s Department of Justice and joined by 11 states – though with apparent bipartisan support – charging Alphabet with “unlawfully maintaining monopolies in the markets for general search services”.
It followed a congressional report which accused Amazon, Apple, Facebook and Google of monopolising the digital market and recommended antitrust laws be used to break them up.
Two more cases were brought against Google in December.
One from the attorneys general of 35 states accuses the company of anticompetitive practices in order to retain its dominance in search, while another filed by the attorneys general from 10 states focuses on the company’s monopoly power in digital advertising markets.
Google has denied engaging in anticompetitive practices.
Donald Trump has filed a lawsuit against Rupert Murdoch, two Wall Street Journal reporters and the publication’s owner, News Corp.
The US president has accused the named individuals of defamation, claiming they acted with malicious intent and caused him overwhelming financial and reputational harm.
The lawsuit, which was filed in Miami, seeks at least $10bn (£7.5bn) in damages.
In a post on Truth Social, Mr Trump called the lawsuit “historic legal action” which was filed on behalf of himself and all Americans who he said will “no longer tolerate the abusive wrongdoings of the Fake News Media”.
“I hope Rupert and his ‘friends’ are looking forward to the many hours of depositions and testimonies they will have to provide in this case,” he wrote.
It comes after Mr Trump claimed that a letter he allegedly wrote to paedophile Jeffrey Epstein was “fake” and said he would sue the “ass off” Rupert Murdoch, who owns the Wall Street Journal (WSJ), which first published the story.
The publication had said Mr Trump wrote the letter as part of a collection Epstein’s former girlfriend, Ghislaine Maxwell, planned to give him as a 50th birthday present in 2003.
It claimed the message, allegedly from Mr Trump, featured several lines of typewritten text, concluding with: “May every day be another wonderful secret.”
The text was framed by what appeared to be a hand-drawn outline of a naked woman, the WSJ claimed. The letter is also said to have featured the signature “Donald”.
Mr Trump immediately denied writing the letter when the WSJ report was published on Thursday night.
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Memes of Epstein undermine victims, says lawyer
“The Wall Street Journal printed a FAKE letter, supposedly to Epstein,” he wrote on Truth Social.
“These are not my words, not the way I talk. Also, I don’t draw pictures. I told Rupert Murdoch it was a Scam, that he shouldn’t print this Fake Story. But he did, and now I’m going to sue his ass off, and that of his third rate newspaper.”
Mr Trump ignored questions about Epstein as he signed a cryptocurrency bill at the White House earlier on Friday.
The president’s lawsuit comes as the US government filed a motion to unseal grand jury transcripts related to Epstein, who took his own life while awaiting trial in 2019.
In a Manhattan federal court filing, the Department of Justice said the criminal cases against Epstein and Maxwell are a matter of public interest, justifying the release of associated grand jury transcripts.
Earlier on Friday, Mr Trump said attorney general Pam Bondi had been asked to release the transcripts because of “the ridiculous amount of publicity given to Jeffrey Epstein”.
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The justice department previously said it had around 200 documents relating to Epstein and that the FBI had thousands more.
It is unknown how much of this is grand jury testimony, which is typically kept secret under US law.
Read more:
All we know about the ‘friendship’
Trump denies writing birthday letter to Epstein
The president has faced increased scrutiny over his alleged friendship with Epstein since his administration’s U-turn on the so-called ‘Epstein files’.
Mr Trump pledged to release files on Epstein during his presidential campaign, as his MAGA movement accused the Biden administration of suppressing the extent of Epstein’s paedophilia, predatory behaviour and his so-called “client list” – thought to contain names of the rich and famous who conspired with him in his child sex trafficking operation.
But after a review of the evidence the US government has, the Justice Department recently determined that no “further disclosure would be appropriate or warranted”.
Venezuela releases jailed Americans in prisoner swap
The Trump administration said on Friday that it had negotiated an exchange with Venezuela, resulting in the release of 10 jailed Americans.
US secretary of state Marco Rubio said the prisoners, who had been held in the South American country, were “on their way to freedom”.
Men in the CECOT jail in EL Salvador. Pic: Reuters
In return, 252 Venezuelan migrants being held in El Salvador have been freed, the Venezuelan government said.
They had been held in the notorious maximum security CECOT prison after being deported by the US.
US
Trump denies claim he wrote birthday letter to Jeffrey Epstein – and says he has ordered release of more case files
Donald Trump has called an alleged letter he wrote to paedophile Jeffrey Epstein “fake” and said he will sue the “ass off” Rupert Murdoch, who owns the paper that first published the claim.
In multiple posts on Truth Social, the US president accused The Wall Street Journal (WSJ) of fabricating the letter that it claimed was written by Mr Trump as part of a collection of letters addressed to Epstein that his former girlfriend Ghislaine Maxwell planned to give him as a birthday present in 2003.
According to documents seen by the WSJ, Mr Trump’s letter featured several lines of typewritten text framed by what appeared to be a hand-drawn outline of a naked woman.
The paper said the letter concludes “Happy Birthday – and may every day be another wonderful secret”, and featured the signature “Donald”, allegedly drawn across the woman’s waist, meant to mimic the appearance of pubic hair.
Epstein took his own life in prison in 2019. Pic: AP
Responding to the WSJ’s claims, Mr Trump wrote: “The Wall Street Journal printed a FAKE letter, supposedly to Epstein. These are not my words, not the way I talk. Also, I don’t draw pictures.
“I told Rupert Murdoch it was a Scam, that he shouldn’t print this Fake Story. But he did, and now I’m going to sue his ass off, and that of his third rate newspaper. Thank you for your attention to this matter! DJT.”
He said earlier he would also sue the WSJ and News Corp, which Mr Murdoch owns. The WSJ is published by News Corp subsidiary company, Dow Jones & Co.
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From 16 July: Trump: Epstein case is ‘a boring story’
The Justice Department has not responded to the WSJ and the FBI declined to comment.
In a separate post, Mr Trump said he has asked the attorney general, Pam Bondi, to release “any and all pertinent grand jury testimony” in the case of the paedophile financier who was found dead in his Manhattan cell in August 2019, shortly after he was arrested on sex trafficking charges.
The release of any documents, Mr Trump said, would be subject to approval by a court.
The justice department has previously said it had around 200 documents relating to Epstein and that the FBI had thousands more. It is unknown how much of this is grand jury testimony – which is typically kept secret under US law.
Ms Bondi responded to the president on X, writing: “President Trump-we are ready to move the court tomorrow to unseal the grand jury transcripts.”
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Elon Musk, who claimed last month that Mr Trump appears in the Epstein files, was surprisingly among the first to come to the president’s defence over the WSJ claims.
“It really doesn’t sound like something Trump would say tbh,” the tech billionaire wrote on X, before going on to ask where the evidence against Epstein allegedly held by the FBI had gone.
The Trump administration has come under criticism after the president appeared to U-turn on his own promise to release more information about the Epstein case publicly.
In the run-up to the US election last year, Mr Trump drew on rumours and conspiracy theories that appeared to accuse the Biden administration of suppressing the extent of Epstein’s paedophilia, predatory behaviour and his so-called “client list” – thought to contain names of the rich and famous who conspired with him in a child sex trafficking operation.
Ms Bondi fuelled these rumours in February by telling Fox News that the alleged Epstein client list was “sitting on my desk right now to review”.
Read more:
Ghislaine Maxwell could challenge imprisonment
Why is Trump fighting with MAGA over Epstein?
The huge impact of Musk’s row with Trump
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In the same month, the justice department released some government documents regarding the case, but there were no new revelations.
After a months-long review of additional evidence, the department earlier this month released a video meant to prove that Epstein killed himself, but said no other files related to the case would be made public.
The decision was criticised by many in Mr Trump’s Make America Great Again (MAGA) movement, who Mr Trump later called “weaklings”.
Sky News has contacted the White House for further comment.
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