Discover what's up in the business of marketing each Friday.
Google Wins Major Antitrust Victory In Brazil, Does It Foreshadow Broader EU & US Wins?
In addition to the various government antitrust investigations against Google going on around the world, there is a parallel world of private lawsuits by Google rivals and critics that make similar unfair competition or antitrust claims against Mountain View. They generally allege, among other things, that Google is unfairly referring traffic to its own “vertical sites” and thereby violating antitrust or fair competition rules.
Comparable issues are at the heart of the European Comission’s “four concerns” that are now the basis for antitrust settlement talks with Google. The same or similar arguments are also used against Google in the US. (The FTC is now weighing a “go or no go” decision about whether to bring an antitrust case in the US.)
Summary Judgment Granted for Google
One of those private antitrust litigants against Google was the parent of Brazilian shopping comparison site Buscapé. However, at the end of last week Google was granted summary judgment (see translated decision below) against the company. That effectively ended the case in Google’s favor. A motion for summary judgment (under US law) is only granted if all plaintiffs’ factual allegations are assumed to be true and there is still no legal remedy available. The Brazilian legal standard appears to be the same or substantially similar.
What’s striking and relevant about the Brazilian case is its similarity to cases and claims against Google around the world. In addition, the Brazilian court seemed to base its ruling and decision on general legal principles rather than specific Brazilian statutes or competition rules.
Plaintiff’s Factual and Legal Claims
Buscapé’s parent company made the following claims in the case:
[Google] manipulates its search service, that controls 95 percent of the market, for the purpose of:
i) allowing only GOOGLE SHOPPING to display images of the searched merchandise, which is not permitted to BUSCAPÉ and BONDFARO;
ii) embezzling and usurping the database of reviews – clients’ evaluations of the purchases gathered along more than 10 years by BUSCAPÉ, BONDFARO and E-BIT sites;
iii) artificially including GOOGLE SHOPPING in the first ranks of the search results, whenever a consumer conducts a query for the purchase of products in Google Search, thus harming the other competitor sites owned by Plaintiff.
The Court: Google Not a Monopoly, No Obligation to Plaintiff
Despite the assertion that Google owns “95 percent of the market” in Brazil, and the procedural “assumption” that plaintiff’s factual allegations are true, the Brazilian court was not persuaded by any of plaintiff’s arguments. It rejected every one of plaintiff’s arguments.
Google isn’t a monopoly: “There are several search services at the disposal of the consumers who are looking for products, and at the disposal of the merchants intending to attract consumers [i.e., Bing, Yahoo, Ask]. Google’s leadership in the internet search segment in Brazil cannot be mistaken with a monopoly of that activity . . . Plaintiff does not need and is not dependent on Google Search to [be found by consumers]. The users may access Buscapé and Bondfaro sites without passing through Google.”
Google Shopping isn’t a separate “product”: “Google Shopping is not a shopping comparison site like Buscapé and Bondfaro . . . Google Shopping is one more among the thematic search options of Google search . . . Google Shopping is not a “site” to compare prices, but just a thematic search option within the generic search made available by Google Search.” (This is the argument Google makes about the relationship of general search to its “verticals”: they can’t be separated from Google search results.)
Google can present search results in whatever order or manner it deems appropriate: “[Google] admits that the display order of the most relevant results is based on its algorithmic formula, developed with the clear intention of ranking first the results which best fit
its criteria of quality and relevance to meet user’s actual intention. And nothing prevents [Google], in the conduction of its profit corporate business, from developing and using a tool (algorithmic formula) that returns results to a user query in Google search in a display order dictated by Google’s quality and relevance criteria.”
Display of plaintiff’s product reviews is not a copyright violation: Plaintiff had claimed that Google’s display of reviews from its Buscapé site constituted a kind of embezzlement and copyright violation. The court disagreed, citing a kind of “fair use” theory: “[E]ven if [one] considers that the Plaintiff organized said evaluations and that the comments selection and their presentation format are sufficient to consider the data base to be an intellectual work subject to copyright protection . . . actually, there is no embezzlement in the use of said database by [Google] . . .
From a search of any product (such as 40” LCD TV set, for example), made in Google site, whether a generic or thematic search (with the “shopping” theme), the information inherent to the pages indexed by Google search will appear in all results, regardless of the ranking, so that the internet user can see the results and have the minimum elements to decide on which result he should click, that will lead him directly to the desired page . . .
In other words, each result displayed by a search engine such as Google, necessarily brings portions of the respective page (of the result) on the internet.”
Now in (Plain) English
This Brazilian ruling technically and legally has no impact on US authorities or anyone else around the world. However the court is using certain kinds of broad legal ideas and arguments that exist as potential defenses in both the US and Europe (to varying degrees). And the plaintiff’s claims in the case are very similar to arguments that Google opponents have made or are now making.
Basically what the court said was the following:
- Despite Google’s overwhelming search market share, plaintiff’s shopping sites have other ways to be found. Google isn’t a monopoly.
- Google’s vertical results aren’t competitive “products,” they’re just a part of Google’s search results
- Google owes no duty to present plaintiff’s site(s) in a particular position; Google can present search results in whatever manner and order it deems best for its users
If Google had been considered a monopoly the outcome would have been quite different in all likelihood. But that finding wasn’t made here.
Google is probably going to “double down” on these defenses (articulated by the court) though it will seek to negotiate settlements if possible to avoid litigation or comparable adversarial process in Europe.
As one “remedial” measure Google is now labeling many of its vertical or “thematic” results with a “sponsored” badge, such as these examples in travel:
Google will likely broaden this approach as a kind of compromise measure to satisfy regulators. However, it doesn’t really address critics’ central concern about being pushed to the bottom of the page or otherwise overshadowed by Google’s “own content.”
As a practical matter there’s probably nothing they can do about it — except to buy AdWords for visibility.