Google Shopping: beware of ‘self-favouring’ in a world of algorithmic nudging

February 2018

CPI Europe Column edited by Anna Tzanaki (Competition Policy International) & Juan Delgado (Global Economics Group) presents:

Google Shopping: beware of ‘self-favouring’ in a world of algorithmic nudging By Nicolo Zingales (Sussex Law School)1

Introduction

On 27 June 2017, the European Commission closed its investigation in the Google Shopping case. It found a breach of article 102 TFEU in relation to Google’s “more favourable positioning and display of its own comparison shopping service compared to competing comparison shopping services” (hereinafter, “the conduct”).2 The Commission’s Decision is important for several reasons. First and foremost, it constitutes the first application of the leveraging theory in an algorithmic context, where as a result of certain algorithmic design choices3 a dominant undertaking systematically directs (“nudges”) consumers towards its own goods or services in a secondary market. Google apparently did not see it coming, as it argued both in the proceedings before the European Commission and in the appeal it lodged against the Decision4> that the Commission used a novel theory of abuse, and therefore in accordance with its previous practice should not have imposed a fine. However, the Commission rejected this argument, noting that it had already used a self-favouring theory to establish abuse in a number of cases.5 It therefore imposed a fine of almost 2.5 billion euros and ordered Google to tak

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