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Heureka Is Suing Google for an Abuse of Dominance That Harms Online Shoppers and Merchants Alike

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Heureka Is Suing Google for an Abuse of Dominance That Harms Online Shoppers and Merchants Alike June 30, 2020 Heureka is suing Google for an abuse of dominance that harms online shoppers and merchants alike On 27 June 2020, the Heureka Group, one of the leading European comparison shopping services, filed a lawsuit against Google to recoup the damage suffered through Google’s abuse of dominance in the area of search. The claim, submitted to a court in Prague, follows on from the European Commission’s decision in June 2017 that Google had abused its dominance in search by favouring its own comparison shopping service (Google Shopping) in general search results pages. The Heureka Group is suing Google for lost profits since the introduction of Google Shopping in the Czech Republic in February 2013. In its Google Shopping-decision of June 2017, the European Commission had found that in February 2013 Google started favouring its own comparison shopping service (Google Shopping) in general results pages, by positioning and displaying the service more prominently than competing services, regardless of whether these services had more relevant offerings for the user's search query. This meant that users missed out on the best deals because the offers taken from Google Shopping were typically more expensive than the offers that could be found on competing comparison services. According to a study by Grant Thornton1, prices in the boxes of Google Shopping were on average 14% above the prices that could be found elsewhere, in some product categories the price difference was up to 30%. According to the European Commission, Google violated EU competition law by using its near-monopoly position in general search to favour of its inferior comparison shopping service vis-á-vis more relevant competitors. By diverting users to its own service, Google deprived them of access to the most relevant product information. For example, they could not get a quick evaluation of the quality of an online merchant, the methods of available transport of selected goods, or payment alternatives that only competing comparison services provided. Such information is relevant, however, as it assists users to make well informed online purchasing decisions. "We may have little effect on Google's actual behaviour, but we want to take this step to defend ourselves against Google's conduct through the lawsuit," explains Tomáš Braverman, CEO of Heureka Group. "We see which detriment effect Google’s abuse of dominance has had in our market," Braverman continues, "and we see how Google continues the same pattern elsewhere. For example, other online services such as flight, hotel or job search services are similarly at risk. We want to show other entities that even in online markets and e-commerce in particular, monopoly positions need to be observed closely to prevent that they foreclose competition and reduce innovation. " Google’s abusive conduct, as identified by the Commission, torpedoed many years of work, investments and innovations by pioneering comparison shopping services such as Heureka’s and undermined the confidence of consumers and merchants in the use of those services. In contrast to, for instance, marketing agencies and merchant platforms, genuine comparison shopping services fully focus on the consumers’ interests in finding the most suitable product for their respective needs. In turn, these services also provide a significant added-value to merchants, who can broaden their reach and make consumers aware of their latest offerings. The value generated by comparison shopping services for consumers and merchants is at stake, however, if Google further monopolises this market by favouring its own, less relevant, service. All these facts led Heureka to file the lawsuit against Google. 1 Grant Thornton Sweden AB l Data analysis – Google shopping EU benchmark study l 2019-05-07 For questions please refer to [email protected] .
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