Resume: On July 12, the French competition authority has sanctioned Google for non-compliance with injunctions imposed in its decision of April 09, 2020. Beyond the fact that it is an umpteenth record for a sanction against Google, this decision is also talked about for the legal arguments and the assessment that is made by the competition authority.
To quote this paper: L. Denis, “Google sanctioned again by the French competition authority for non-compliance with injunctions on neighbouring rights”, Competition Forum, 2021, n° 0026, https://competition-forum.com.
- The historical context of this decision
A. Google and neighbouring rights
The French competition authority was seized in November 2019, by several associations representing press publishers, for practices implemented by the American digital giant, the company Google. This seizure was made on the occasion of the entry into force of the law of 24 July 2019 on neighbouring rights, this law aims to give publishers and press agencies the right to authorise or prohibit the reproduction of their publications by digital platforms, which should allow the establishment of balanced negotiation conditions between digital platforms and press agencies and publishers.
With this new law, Google had unilaterally decided to no longer display any excerpts of articles or any other content affected by this law, unless publishers and news agencies give it permission to do so free of charge. Some observers spoke of a “David versus Goliath” confrontation. In such a context and faced with the visibility that Google provides, many press publishers have granted the company licenses that allow it to have access to even more content. With this blackmail and bad faith in the face of this new law of July 24, 2019, the associations at the origin of the referral requested the pronouncement of precautionary measures aimed at enjoining Google to enter in good faith into a negotiation for the remuneration for the resumption of content that could be proposed by the various publishers.
B. Behaviour that requires emergency measures
For the competition authority, this behaviour on the part of the American firm constitutes an abuse of a dominant position and causes severe and immediate damage to the press sector. In such cases of urgency, the Authority has the right to pronounce what is known as interim measures. This type of measure makes it possible to act in cases of urgency to intervene quickly in order to immediately stop the damage to the sector concerned.
In its decision dated April 9, 2020, the authority made several injunctions against Google: the company had to conduct negotiations within three months from the request to open negotiations from a publisher or news agency; neither the indexing, nor the classification, nor the presentation of protected content taken by Google on its services should be affected by the negotiations.
These various injunctions were aimed at putting an end to what the authority and observers considered to be an abuse of a dominant position, while obliging Google to negotiate with publishers in good faith, as is the objective of the law of 24 July 2019.
- A penalty for non-compliance with injunctions issued by the competition authority
A. The factual background between the two decisions
These measures have pushed the American firm to open up to negotiations, which is beginning to take shape in a statement on Google’s French twitter page dated October 7, 2020, announcing that the company is working closely with the Alliance of the General Information Press, discussions that are apparently taking place within the framework established by the French competition authority.
This announcement will not take long to materialize, it is on November 19, 2020 that the company, through the president of Google France Sébastien Missoffe, announced on its official blog to have signed several individualagreements. These first agreements will therefore be closely scrutinized, as it is a first in this type of negotiation, the other European countries must also transpose the law on neighboring rights. Finally, this law creating a new framework for negotiations is a first in Europe and even in the world, it seems difficult to apprehend the perfect behavior for the company in a dominant position in these discussions. However, the injunctions of the competition authority should have served as a guideline in the face of this vagueness, and it would seem that the American company has not fully respected them.
B. A penalty for failure to comply with injunctions
Google, which is already accustomed to records for what it is monetary sanctions (including at European level with the cases of Google Shoppingand Android), will again get a record and this time for a penalty for non-compliance with a decision of the competition authority. Despite the negotiations on which the company communicated in October, since the three-month deadline that the authority had left to Google to comply with the injunctions was exceeded, the French competition authority was again seized by the various French press unions, on the grounds of non-compliance with the injunctions issued in the decision of April 9, 2020.
In response to this referral, the Authority opened an in-depth investigation and observed all the documents that the parties were able to provide, which concluded with a session on May 5, 2021 where all the parties discussed and defended their points of view. Following this procedure, the French Competition Authority concluded that Google had violated several injunctions, the most important of which was the obligation to negotiate in good faith.
As for the non-compliance with this injunction in particular, several points were raised and discussed in the authority’s decision of 12 July 2021. The main factor that led to the conclusion of a lack of good faith on the part of Google is that their dominant position also gives them the status of a dominant player in the negotiations, de facto the company tries to provide a global negotiation framework, in other words Google wanted to impose a global partnership called “Showcase”. At the same time, the American firm wanted to reduce the field of negotiation for the remuneration that could not come only from the advertising pages “Google Search”. In the continuity of this framework of negotiation that Google tried to impose, they had established a particular condition to be able to enter in negotiation, it was necessary that the contents have the certification of political and general information. But as the Competition Authority points out, the contents without this certification are a source of higher income than those with this certification. The last point that made the authority to judge that Google was not in good faith in its negotiations is the fact that the firm refused to negotiate with news agencies on the issue of remuneration for neighbouring rights. According to them, news agencies are not entitled to remuneration for content that is used by third-party publishers in their publications. However, the authority states in a strong and firm manner that this attitude is completely contrary to the decision on the injunctions addressed to Google, considering that the injunctions concerned the relationship with both publishers and news agencies.
The second injunction that Google has failed to comply with is the one relating to the obligation to communicate to publishers and press agencies the information necessary “for a transparent assessment of the remuneration due”. In principle, the purpose of this communication is to provide all the players with clear and objective information on the calculation of the remuneration. The elements identified by the authority showed that the communication on this subject was only partial, late and insufficient. According to the competition authority, this incomplete communication demonstrates the failure to comply with the second injunction issued.
Faced with this failure to comply with the injunctions, the French competition authority is going to use extremely strong terms by speaking of “extremely serious practice” on the part of the American company. According to the members of the authority, the company “still does not seem to accept the law creating neighbouring rights”.
As Isabelle de Silva, President of the French Competition Authority, reminds us in the press release announcing the decision: “When the authority imposes injunctions on companies, they are obliged to apply them scrupulously, respecting their letter and their spirit. In this case, this was unfortunately not the case“.
Faced with this transgression, the authority will impose a fine of a record amount for non-compliance with one of its measures: 500 million euros. This new financial penalty that Google is facing. This penalty is also the second in less than two months in France, after a penalty of 220 million euros for Google for having favored its own services in the online advertising sector. In parallel to this financial penalty, the Competition Authority obliges the American firm to comply with injunctions 1 and 2 established in the decision of April 2020, failing which, if these injunctions are not complied with, they are accompanied by a penalty of 300,000 euros for each day of delay at the end of the 2-month period starting from the formal request to reopen negotiations.
In short, this is a strict and striking decision, in line with what French and European antitrust law has established against GAFAM.
C. The astonishment and counterattack of the American company in the face of this sanction
Faced with this detonating decision, Google does not hide its astonishment and its willingness to contest this decision, as explained by the company’s spokesperson: “We disagree with certain legal elements, and consider that the amount of the fine is disproportionate to the efforts we have put in place. It is therefore the first September that an appeal is made against the decision made by the French competition authority, it is recalled in particular that the company recognizes the neighboring rights and has moreover extended its offers to 1200 publishers of press, contracts modified in order to comply with the decision of the competition authority .
The company’s representatives continue to argue, explaining to reporters from the French press agency that the decision only took into account a period that was transitory in the negotiation phase, in other words between May and September 2020, and that since that time there has been work and a willingness to work in good faith with all press publishers. The American firm which tends more and more to recognize its faults and even to negotiate with the competition authorities, as shown by the press release of the case of June 07, 2021. It is therefore legitimate to question the direction and proportionality of the sanction pronounced against Google.
A. The inclusion of good faith in the competitive analysis
In principle, competition law and contract law are two completely separate matters. As a matter of principle, the relationship between platforms and their contractual partners is examined in competition law by means of a specific and precise analysis provided by the tools of antitrust law. In this context, we must necessarily mention the analyses of price parity clauses that may be considered as agreements; self-preferencing practices or abuses of economic exploitation or dependence. There are therefore different levers of analysis and potential sanctions for the authorities, but the good faith criterion, which belongs exclusively to contract law, has never been considered for competition law until now. Good faith is one of the fundamental principles of contract law, and with this case, one of the pillars of contract law has been included in the competition analysis.
The principle of good faith is not unknown in competition law. More and more economic actors are moving towards greater autonomy, which necessarily requires them to act in good faith. However, what interest’s competition law by this principle is that the behaviour of the actors is in good faith. In the case of this decision of July 12, 2021, it is not Google’s behavior on the economic market that is of interest, but the fact that the content of the negotiations held between Google and the press publishers, a debate in principle governed under the prism of Article 1112 of the French Civil Code which provides that: “The initiative, the course and the breaking off of pre-contractual negotiations are free. They must imperatively satisfy the requirements of good faith“. This analysis of good faith in the pre-contractual phase is, in principle, the prerogative of the ordinary law judge. What is even more surprising is that the competition authority is not a judge, but an independent administrative authority, which has the power to issue opinions and impose sanctions in the event of anti-competitive practices. It is interesting to wonder whether in this decision, the competition authority has not granted itself a power that was not its own by analyzing the good faith of Google or not within this negotiation phase.
B. The legal and economic risks of these regular sanctions.
This decision is not the first record for Google in terms of monetary penalty as we observed previously. In 2021, Google will have been fined more than one billion euros. In France with the two decisions against him, with respectively for that of June 7 of 220 million and for that of July 12 500 million. Italy had earlier in the year in May also sanctioned Google for abuse of dominant position, for an amount close to 100 million euros. More recently, it was in South Korea that the digital giant was again sanctioned for abuse of dominant position. In a decision dated September 14, 2021, the Korean competition authority condemned Google for 2.5 billion won (equivalent to 150 million euros). We are facing a tangle of condemnation and sanction that reaches in the end a significant sum. Even if many think that for a company like Google 1 billion is nothing, we must take into account that these sanctions are not the first and given the current trend surely not the last. These repeated fines can finally begin to weary a company that is economically efficient and especially a cornerstone for the European digital economy.
Legally, the decision, as we have seen and as Google claims, is open to criticism. The question of the politicization of this decision arises. The debate is also growing within the doctrine on the fact of knowing if we are not finally starting to sanction the dominant positions of Big-techs without even analyzing the abuses, at the slightest misstep of the latter. One may also wonder whether legal security is always guaranteed, with sanctions continually being imposed on the basis of an extensive assessment and application of competition law. A handling of the law which can sometimes contravene the famous adage: nullem crimen, nulla poena, sine lege certa (no crime, no sanction without a certain law).
Questions may also be asked about the perpetual use of fines in the face of this legal uncertainty. Fines, as we recall, are a weapon of dissuasion which, in principle, make it possible to prevent and avoid harming competition and consumers in the future. However, for some years now, the authorities seem to have been using these fines in an attempt to bend the large digital companies to their authority, rather than to prevent and educate companies about our increasingly evolving competition policy and rules.
We are facing a decision that could be a simple reminder of the injunctions that Google must follow in the context of neighboring rights with publishers and news agencies. A record decision when Google had already been condemned a month earlier by the same authority. This finally brings to this decision a questioning that is to know if we do not condemn too much the digital companies and especially Google. Why not think about calls to order, or simple notices that would allow these companies to understand precisely what is expected of them in the competitive sphere.
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