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Google Faces Setback as EU Court Adviser Supports Antitrust Regulators

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Alphabet’s Google encountered a potential setback on Thursday after an adviser to Europe’s highest court sided with EU antitrust regulators over a landmark €4.34 billion ($4.98 billion) fine imposed seven years ago.

The European Commission ruled in 2018 that Google had abused its dominant position by using its Android mobile operating system to block competitors. While a lower court upheld the ruling in 2022, it slightly reduced the fine to €4.1 billion. Google subsequently appealed to the Court of Justice of the European Union (CJEU).

Juliane Kokott, Advocate-General at the Luxembourg-based CJEU, issued a non-binding opinion recommending the court reject Google’s appeal and confirm the reduced fine. Kokott stated, “The legal arguments put forward by Google are ineffective.”

She dismissed Google’s claim that regulators should assess the situation by comparing Google with a hypothetical, equally efficient competitor. Kokott explained, “Google held a dominant position in several markets of the Android ecosystem and thus benefited from network effects that enabled it to ensure that users used Google Search.”

Judges typically follow the Advocate-General’s opinion in about 80% of cases. A final ruling is expected in the coming months.

Google responded by emphasizing Android’s role in creating choice and supporting businesses globally, expressing disappointment with the opinion. A spokesperson said, “If followed by the Court, [the opinion] would discourage investment in open platforms and harm Android users, partners, and app developers.”

The regulators’ investigation found Google had imposed illegal practices dating back to 2011, including requiring manufacturers to pre-install Google Search and Chrome browser alongside Google Play on Android devices. Google also paid manufacturers to pre-install only Google Search and prevented the use of rival Android systems.

Google’s Android runs on approximately 73% of the world’s smartphones, according to Statcounter.

This fine is part of a broader enforcement effort against Google, which has amassed €8.25 billion in penalties across three antitrust cases over the past decade, with additional investigations ongoing.

Case Reference: C-738/22 P Google and Alphabet v Commission

EU Probes Corporate Structure of Elon Musk’s X Months After xAI Acquisition

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The European Union announced on Thursday that it is seeking further information from Elon Musk’s social media platform X regarding recent changes to its corporate structure. This inquiry comes months after the platform was acquired by Musk’s xAI in a $33 billion deal.

A spokesperson for the European Commission, the EU’s executive branch, stated, “We are following closely changes in the corporate structure of X, as we would changes in any other designated platform.” However, the spokesperson did not confirm Bloomberg News reports suggesting that regulators are considering potential fines against X under the Digital Services Act (DSA).

Bloomberg reported that the regulator might announce a fine on X before its summer recess in August for alleged violations under the DSA, though such a timeline could be delayed.

Representatives from both xAI and X did not immediately respond to Reuters’ requests for comment.

Under the DSA, companies found in breach can face fines of up to 6% of their global turnover, with repeat offenders potentially banned from operating within Europe.

Earlier this month, X updated its blue checkmark disclaimer to preempt a possible substantial fine from EU antitrust authorities. The European Commission had issued preliminary findings in July last year stating that X violated the DSA’s rules on deceptive design by converting the blue checkmark into a paid verification, thereby misleading users about credibility. X has disputed this assessment.

German Firms to Submit Separate EU Bids for AI Data Centre, Report Says

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Several major German companies — Deutsche Telekom, Ionos, and the Schwarz Group’s IT subsidiary — plan to submit separate bids to the European Union for funding to build an AI data processing centre, according to Germany’s Tagesspiegel newspaper.

The European Commission has announced plans to allocate $20 billion to support the construction of AI data centres aimed at helping Europe catch up with the U.S. and China in artificial intelligence capabilities.

Under the current German government coalition agreement, Chancellor Friedrich Merz’s conservative party and the Social Democrats have prioritized having at least one of these AI centres located in Germany.

In May, Deutsche Telekom revealed it had partnered with SAP, Ionos, and the Schwarz Group to jointly seek EU funding for an “AI gigafactory” — a specialized facility designed to meet the massive computing demands of AI. However, the Tagesspiegel report noted that SAP is no longer involved in the bid.

SAP did not comment on the bidding process itself but said it is not pursuing a role as operator or investor in AI gigafactories. Instead, SAP aims to contribute as a technology and software provider to future AI data centre projects in Germany and Europe.

Ionos told Reuters that the expression of interest being submitted to Brussels this Friday is an initial step, with a formal application planned later this year alongside partners.

The Schwarz Group declined to confirm whether it will submit a separate bid, stating that if a German consortium is formed, all relevant parties will be invited to contribute to creating the fastest, most reliable, and most convincing AI gigafactory.

Deutsche Telekom did not respond to Reuters requests for comment.