French Supreme Court: Google did not abuse dominant position
E-Kanopi is a French company that runs a search engine as well as thematic sites providing information on various topics: weather, companies' financial data, phone listings and pensions. E-Kanopi subscribed to a Google AdSense account in January 2007 for its websites iadah.com and iadah.net and a Google AdWords account in January 2010 for its other websites.
E-Kanopi asked the Paris Commercial Court for reinstatement of both accounts, which occurred in August and September 2010. In October 2010, E-Kanopi sued Google arguing that Google's suspension of the accounts was discriminatory, constituting an abuse of dominant position. On 23 May 2011, the Paris Commercial Court held that the suspension of the accounts was justified and dismissed the claim. The Paris Court of appeal upheld the Commercial Court's ruling.
E-Kanopi alleged that Google's actions were discriminatory because Google did not apply the same terms to E-Kanopi's direct competitors. According to E-Kanopi, competitors were allowed to continue using AdWords, despite the fact they were doing the same thing as E-Kanopi. E-Kanopi also argued that Google's search results concerning E-Kanopi were discriminatory and harmed its position in the search result page.
The Paris Court of Appeal rejected E-Kanopi's claim for damages based on alleged discrimination and abuse of dominant position. It held that E-Kanopi did not prove that other search engines were in the same position so that the company did not establish the anti-competitive effect of the alleged discriminatory deactivation.
However, the Paris Court of Appeal condemned Google for the sudden termination of AdWords and AdSense contracts and ordered it to pay damages to E-Kanopi. The damages were equal to eight working days' notice, calculated by the Court on the basis of the four-month duration of the business relationship and the specificity of the contracts. The Court considered that if the suspension itself was not unlawful, its abruptness and the lack of notice should be compensated under article L. 442-6, 5° of the French Commercial Code.
E-Kanopi challenged the decision of the Paris Court of Appeal before the French Supreme Court. The Supreme Court said that article L. 420-1 and L. 420-2 of the French Commercial Code prohibits abuse of dominance only if the alleged practice has the object or effect of preventing competition in a market. E-Kanopi did not claim that the alleged abuse could have such anticompetitive object or effect and did not define the relevant market. Consequently, the Court of Appeal was right to reject the claim based on an abuse of a dominant position.
Between April and June 2011, the Paris Commercial Court also dismissed arguments that Google abused its dominant position in two other cases (Webdeviin on 17 May 2011 and Telemaque on 16 June 2011) with similar complaints.
The judgement of the French Supreme Court is consistent with Decision n°13-D-07 of the French Competition Authority (FCA) in which the FCA rejected E-Kanopi's complaint against Google. In its complaint, E-Kanopi alleged that Google had unlawfully tried to eliminate it as a competitor by deactivating its online advertising accounts without justification. The FCA concluded that Google had not violated antitrust law because there was not sufficient evidence of a practice aimed at excluding E-Kanopi from markets in which it allegedly competed with Google. Google's policy for reviewing its advertisers had been enforced in an objective and neutral manner. Therefore, the suspension of the AdWords and AdSense accounts was considered as an objective, clear and non-discriminatory measure. This decision of the FCA was appealed by E-Kanopi before the Paris Court of Appeal and the case is still pending.