Foundem’s abuse of dominance claims against Google to proceed to trial in the Chancery Division

29/07/13

Foundem, a startup internet search engine, has brought a competition claim for abuse of a dominant position against Google, and also complained to the European Commission about Google's conduct. Foundem's claim is (in summary) that Google imposed two unjustified "penalties" on Foundem's website, causing a sudden dramatic decline in the number of users visiting its site, and that Google distorts the results of users' search queries by favouring Google's own products. Google's response is (in summary) that Foundem's search rankings fell because of quality deficiencies in Foundem's website which it subsequently remedied, and that it does not distort competition in its search services.

Google applied for these proceedings to be stayed pending the outcome of the European Commission's investigation. Mr Justice Roth (to whom the claim has been reserved) has handed down his judgment refusing to grant a stay, because if the Commission announces that it will accept commitments from Google to meet the Commission's preliminary concerns, there will be no bar to Foundem's claim going forward, and the possibility that the Commission may issue a Statement of Objections does not justify a stay. Roth J has ordered that the trial should proceed on the assumption that Google is dominant, and that Google is to provide targeted disclosure into a confidentiality ring (he rejected Foundem's request for standard disclosure) including as to changes in its algorithm that caused negative effects on Foundem's website.

The judgment is here.