18 February 2016

Which way to the Court of Appeal? Streetmap to appeal High Court decision in Google dominance case

On 12 February, the High Court ruled in favour of Google in a competition case brought by the company behind rival online maps provider streetmap.co.uk (Streetmap). Streetmap argued that, as a dominant player in the online search market, the inclusion by Google of thumbnail images of maps within its search results, exclusively provided through its own Google Maps functionality, constitutes an abuse of its dominant position contrary to both Chapter II of the Competition Act 1998 and Article 102 of the TFEU.

Streetmap's claim stems from the introduction by Google in 2007 of a feature known as a 'Maps OneBox' into its search results pages (SERPs) in the UK. When a user performed a search of the internet via Google's search engine facility, a ‘OneBox’ (being a box containing specific, potentially useful information responding to the subject matter of the search) would often be displayed near the top of the first SERP. The traditional search results, in the form of hyperlinks to relevant websites, would follow beneath the OneBox.  Where Google’s search algorithms considered that, based on the user’s search terms, a map-based result may be a useful output, a ‘Maps OneBox’ would present the user with a thumbnail image of a map generated by Google Maps, which served as a hyperlink to the full sized map. The Maps OneBox feature initially displayed a small thumbnail map image adjacent to a clickable hyperlink to the full-sized map, but Google later expanded the thumbnail to cover the width of the SERP. The traditional-type search results appearing below the Maps OneBox would include, where relevant, a link to the websites of other map providers, such as Streetmap. Streetmap claimed that the number of visitors to its website and consequently its revenues declined catastrophically following the introduction of Google’s Maps OneBox feature.

During a two-week preliminary trial in November 2015, in which Google's dominance in the market for online searches was assumed, to be properly determined at a later date, Streetmap alleged that Google abused its power by bundling its search engine and mapping features. It argued that rather than competing on the quality of its maps, Google had simply given them a prominence that no other provider could compete with. Google was claimed to have prevented the growth of competition and foreclosed competitors, whilst failing to comply with its special responsibility as a super dominant company to avoid abusing its power. It was suggested that links to alternative map providers, such as Streetmap, could have been included in Google’s Maps OneBox. Google, meanwhile, argued that it was under no obligation to include third party map providers in its Maps OneBox and, as an integral part of its search offering which provided a benefit to consumers, its thumbnail maps did not amount to bundling, unjustified discrimination or a refusal to supply.

In reaching his judgment, Mr Justice Roth had to consider a number of factors. For there to be abuse, anti-competitive foreclosure is required. Google’s use of only its own map function may have had a detrimental effect on rival map providers, but this is arguably just symptomatic of effective competition.

The issue of intention was also considered. An intention by a dominant company to foreclose competition is not requisite for abuse to be proven but can prove particularly relevant to the Court's assessment. In this case, it was found that displaying the Google Maps thumbnail on the SERP was merely a logical step for Google in improving search functionality for its users and a means of keeping pace with its rivals’ US offerings.

In assessing the effects of Google's conduct on the relevant market, the Court accepted that the applicable test in cases alleging abuse of dominance was whether the complainant could establish that the conduct was reasonably likely to harm competition. However, Mr Justice Roth noted that the “challenging and unusual” feature of this case was that conduct in the online search market in which Google enjoyed dominance, was alleged to be abusive on the grounds of an anti-competitive effect in a market in which it was not dominant, namely the market for online maps. For this reason, he held that “it does not follow that conduct will constitute an abuse where the effect is on a separate market where the undertaking is not dominant, if that effect is not serious or appreciable".

Upon considering various pieces of factual information, Mr Justice Roth concluded that Google’s introduction of the Maps OneBox in 2007 was not reasonably likely to appreciably affect competition in the market for online maps. Even if, contrary to this finding, it was likely to have such an effect, Google's conduct was in any event objectively justified. On the assumption that Google did hold a dominant position, it did not commit an abuse.

Streetmap has already stated its intention to appeal this ruling, on the basis that this case explores an untested avenue of competition law and that Mr Justice Roth erred in raising the standard of proof for abuse of dominance from a mere probability to an ‘appreciable effect’. Further, Streetmap contests that Google didn’t comply with UK law requirements when introducing Google Maps in 2007, as it did not first perform a test on the competitive effects in the UK.

The outcome of this case and the likely appeal will be of interest to small businesses, particularly those in the technology sector. The High Court ruling, if allowed to stand, could set a worrying precedent whereby small businesses cannot bring a case for abuse of dominance until it is potentially too late, as the evidence they need to prove their case will not be known to them at the critical time.

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