GOOG Alphabet Inc

By Valentina Pop 

LUXEMBOURG -- Alphabet Inc.'s appeal against a multibillion-dollar fine for alleged anticompetitive behavior by its Google unit risks backfiring after a European Union court floated the prospect of increasing the fine, rather than scrapping it.

In a surprise twist Friday at the end of a three-day hearing, one of five judges on the panel said the EU's General Court has the power to increase the EUR2.4 billion ($2.6 billion) fine, levied in 2017, if it finds that the sum was insufficient to deter the company from further anticompetitive behavior.

"The fine of EUR2.4 billion was described as eye-catching, but it is a small amount of cash in your hands," Judge Colm Mac Eochaidh said in court. "Did that level of fine deter you from repeating your behavior?" he asked Google's counsel.

Mr. Mac Eochaidh said that as recently as this year, travel search engines including Expedia and TripAdvisor had complained to the European Commission, the EU's executive arm, about Google's alleged anticompetitive behavior.

Christopher Thomas, a counsel for Google, dismissed the idea that the fine was warranted and said the company takes the entire antitrust process "with extreme seriousness." Google disputes the findings of the commission that it had willingly or negligently squeezed competitors out of its shopping searches.

Increasing a fine has only one precedent in the court's history, according to Mr. Mac Eochaidh, when German chemicals giant BASF SE was ordered to pay EUR54,000 in 2007 on top of an initial EUR35 million fine for participating in a chemicals cartel.

The prospect of raising the fine was described as theoretical by the panel's presiding judge. Still, it sent Google lawyers scrambling for arguments, with one sitting on the floor outside the courtroom frantically researching how to contest such a move. If Google loses the case, it has the right to appeal to the bloc's highest court, the European Court of Justice.

At the core of the dispute is a finding from 2017 by European Competition Commissioner Margrethe Vestager that Google had abused the dominance of its search engine to drive traffic to its own shopping ads at the expense of rivals that operated their own shopping-comparison sites.

The EUR2.4 billion sum was a record fine at the time, and it was followed by two other rulings against Google with fines totaling more than $9 billion. Google is challenging the other fines as well. The ruling in this first case, due next year, will have a significant impact on its other appeals as well as on other antitrust cases against tech companies.

The "judgment will guide future cases, not just for the European Commission, but also for member states and courts outside the EU," said James Killick, a lawyer representing the Washington-based Computer & Communications Industry Association, a tech-industry group.

Write to Valentina Pop at valentina.pop@wsj.com

(END) Dow Jones Newswires

February 14, 2020 11:53 ET (16:53 GMT)

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