The Landgericht München I (Munich I Regional Court) has just handed down a landmark antitrust ruling against Google: the court's 37th Civil Chamber (Presiding Judge: Dr. Gesa Lutz) prohibited a partnership between Google and the German Federal Ministry of Health under which Google gives a health information portal (gesund.bund.de) prominent exposure among Google's search results, thereby disadvantaging private-sector health information providers such as the plaintiff in this case, NetDoktor.de, a subsidiary of the Hubert Burda Media conglomerate.
The unholy alliance in question was formed last year in connection with the COVID-19 pandemic.
Google can and presumably will appeal this preliminary injunction to the Oberlandesgericht München (Munich Higher Regional Court).
I have just obtained a copy of the written ruling and translate it here later (you'll find my translation further below).
In a recent post on Google's inexplicable approval of the "official" app of a coronavirus lockdown offender group I already mentioned the NetDoktor case. My own app development company recently brought antitrust complaints in half a dozen jurisdictions against Google's (and Apple's) rules concerning COVID-related apps. The Android situation is even worse than the one on the search engine: on Android, app developers like my company are completely barred from using COVID-related keywords, as opposed to merely giving preferential treatment to governmental entities. Yesterday Google updated its COVID app rules, but the changes Google made do nothing to alleviate my competition concerns, and today's Munich decision shows that monopolists can't just disadvantage (much less exclude from the market, as is the case on Android) private-sector offerings.
The court's press release explains that the operation of a health information portal by the Federal Ministry of Health is not merely a governmental activity, but has an economic dimension making it subject to competition law. The agreement between Google and the German government is restrictive of competition in the market for health information portals. The so-called knowledge panel (info box) that appears whenever German Google users search for any of various health-related keywords is unavailable to private-sector entities: the ministry secured this spot on an exclusive basis.
The court recognized that the plaintiff/movant in this case, NetDoktor.de, is economically dependent on its presence among Google's search results, as 90% of the people visiting that website arrive there via Google. The prominent knowledge panels divert attention away from the organic search results and satisfy many users' demand for information before private-sector competitors have any chance to offer their content.
The court rejected Google's and the German government's arguments that this anticompetitive form of collaboration was justified by "qualitative efficiency gains" (such as by reducing the amount of time it takes users to search for health information) or by the aim to improve citizens' knowledge about health. To the extent that there might be any such effects, they would be clearly outweighed by the anticompetitive implications of this cooperation.
With a view to the Android app situation, that finding against a bottom-line consumer benefit (rule of reason) is very significant. Google's official--but totally hypocritical, as the company promotes and sells material promoting what has been proven over and over to be fake science and bogus medicine--rationale for its restrictions on COVID-related Android apps is also that Google claims it doesn't want users to obtain unreliable information.
The court's press release notes that reliable private-sector health information portals should not be driven out of the market, and the diversity of media and available opinions should not be reduced. That, too, applies to COVID-related Android apps in my view.
The plaintiff/movant furthermore made a credible case for being harmed by the illegal cooperation in a way that warrants emergency relief. The court held that NetDoktor.de would not have to seek recovery of any lost advertising revenues (particularly in connection with certain illnesses) at a later stage.
NetDoktor.de also brought a claim against abusive unilateral conduct on Google's part. That part was rejected "on formal grounds." The judgment will likely shed more light on this. As far as I can see, all of the findings underlying the prohibition of the anticompetitive collaboration between Google and the German government would equally apply to an Art. 102 TFEU case (restrictive effects, competitive harm, no rule of reason; and as everyone can see, Google can't just excuse this kind of anticompetitive behavior with the special circumstances of the SARS-CoV-2 pandemic). Also, it's telling that Google has been ordered to bear 75% of the litigation expenses: NetDoktor.de overwhelmingly prevailed.
I agree with many observers who say that Google was basically just interested in currying favor with the German government, which is a key objective for Google given that it is under competition enforcement pressure in Europe.
This is a great and courageous decision, and I hope the appeals court will affirm it. I plan to attend the appellate hearing, which I guess will take place in a couple of months.
UNOFFICIAL TRANSLATION OF THE KEY PASSAGES OF THE DECISION (with my explanations in [brackets]):
In NetDoktor.de v. Google [technically, the case against the German government is a separate one, though the issues underlying this decision are the same], the Munich I Regional Court's 37th Civil Chamber--Presiding Regional Court Judge Dr. Lutz, Regional Court Judge Dr. von Merveldt, LL.M. (NYU), and Regional Court Judge Dr. Pfeiffer--hands down, on the basis of the oral hearing held on January 20, 2021 ,the following
FINAL JUDGMENT [note the difference between U.S. and German cases: in Germany, a PI motion is a separate case, and this is the final judgment with respect to the PI motion]
Defendant is enjoined by way of a preliminary injunction and under the threat of a contempt fine of up to 250,000 euros or confinement of one of its general managers for contempt of court for up to six months--or a confinement in the event a contempt fine cannot be collected--
from displaying the content of the gesund.bund.de portal in form of a Knowledge Panel showing health information if this results from previous coordination securing such display exclusively for the content of a website operated by the Federal Ministry of Justice (gesund.bund.de) and involves a link as shown, by way of example, in the following screenshots made on November 24, 2020:
Desktop computers for end users:
Mobile devices for end users:
The remaining claims are rejected.
Defendant bears three quarters of the litigation expenses; Plaintiff/Movant bears one quarter.
This judgment is provisionally enforceable by Defendant with respect to the second item [litigation expenses]. Plaintiff/Movant can avert enforcement by Defendant [again, this relates to litigation costs] by providing collateral to the amount of 100% of the amount enforceable under this judgment, unless Defendant provides, prior to enforcement, security to the amount of 100% of the amount to be collected.
Factual Background
This dispute between the parties is about the legality of a cooperation between Defendant [Google] and the [German] Federal Government, pursuant to which content of the "National Health Portal" operated by the Federal Ministry of Health is afforded prominent exposure in special information boxes next to or, respectively, above general search results in connection with Google searches for certain illnesses.
Plaintiff/Movant, a subsidiary of [Hubert Burda Media], has been operating for more than 20 years an advertising-financed online portal for health information at the www.netdoktor.de domain, which in accordance with scientific standards, yet in a manner that is simultaneously intelligible to lay persons, provides information on illnesses, symptoms, medications, therapies, and laboratory values. It is Plaintiff/Movant's stated goal to enable its users to be an informed counterpart of their doctor or health insurance company. With a daily volume of approximately one million pageviews, Plaintiff-Movant is presently the market leader in the German or German-speaking market for health information portals ahead of the second-placed portal [named redacted out] and further competitors. Approximately 76% of all accesses to Plaintiff/Movant's portal are made via mobile end-user devices, the remainder via desktop computers for end users.
Ireland-based Defendant is a Google subsidiary and offers the Google search engine in Europe, including the offering targeting the German market ("Google Search"). That centralized service can be accessed, inter alia, under the domain www.google.de. In order to respond to search queries, the Google Search deduces the user-specific need for information from the given search terms and displays the information it considers to be most helpful and relevant from its vantage point. Such so-called generic search results, also called organic or natural search results, are traditionally presented as title equipped with an underlying link, a web address, and a short excerpt from the website's content containing the search terms ("Snippet"). The linked webpages are shown as a list ("Search [Engine] Results List") and sorted by their rank ("Ranking").
Plaintiff/Movant enjoys a high level of visibility in the general Google Search and in an overwhelming number of cases involving the relevant search terms ("Keywords") from the field of health inforation appears on the first search engine results page, frequently in the first position, which is attributable to, inter alia, considerable investment in the quality of its content and in its search engine optimization efforts. On average, 88% of the total number of visits by end users ("Traffic") to Plaintiff/Movant's health portal was generated by organic Google search results over the past two years. For visits from mobile end user devices, that share averaged 90%.
If a search query relates to short, specific, and factual information, Google Search does not merely provide a Search Results List. Instead, if a query suggests that a purely factual answer can be provided, it immediately also presents key information designed to provide as direct as possible an answer to the user's query. Such search results are highlighted and displayed in addition to the Search Results List. Such information is either displayed directly, in which case Google Search avails itself of information provided by website operators (such as the programs listed by movie theater operators) for such purpose. Alternatively, if users are not searching for individual facts, but for a group of persons, places, or things (such as the cast of a particular television show), such information is collected in the form of so-called Rich Lists. Finally, in caes where it is suitable, info boxes, so-called Knowledge Panels, are displayed and provide relevant information (such as on the height of the Eiffel Tower). The source of the content of those info boxes is typically the Knowledge Graph, an internal database used by Google Search tht contains facts relating to a wide range of topics. Other search engines offer similar kinds of search results that are separated from organic search results.
In Germany, the Google corporate group has for more than ten years continually had a share of more than 90% in the market for Internet search services.
The Federal Ministry of Health ("FMH") has been operating since September 1, 2020, a National Health Portal (NHP) at https://gesund.bund.de, which--like Plaintiff/Movant--provides health information. The stated goal of the federal government's health portal is to offer quality-assured, independent, and generally understandable health information on the Internet. Besides a directory of illness explained and illustrated in corresponding articles, the NHP contains sections such as "Healthy Living", "Care", and "Digital Health." In the "Healthy Living" section, one can find, for example, articles providing explanations and recommendations relating to "Nutrition and Exercise", "Health at the Workplace", "Growing Up Healthy", "Health for the Elderly", "Soul and Well-being", "Pregnancy and Birth", "Overcome an Addiction", and "Prophylaxis and Early Detection." The articles are illustrated with charts and photos, and some of them contain video recordings and audio files. The NHP intentionally steers clear of references to controversies relating to topcis such as vaccination and mammography or information on fields such as homeopathy and alternative medicine. [I don't doubt that this is correct with respect to the German government's health portal, but Google's hypocrisy and irresponsibility involves the distribution of homeopathy-related apps and ebooks while pretending to be concerned about users being misinformed on medical topics...]
On November 10, 2020, Defendant and the FMH announced in a joint press conference (cf. USB stick provided as an exhibit by Plaintiff/Movant) the launch of their cooperation concerning search queries on health topics. That cooperation, they said, should enable easier access to reliable information on health topics on the Internet (cf. FMH press release of November 10, 2020, Exhibit Set K29). For that purpose, the Google search engine presents a prominently exposed info box, or Knowledge Panel, with the NHP's answers when the search terms involve illness-related terminology. Via a link inside the info boxes, users can directly access the related article on the gesund.bund.de website. In response to a desktop search, the boxes appear to the right of the list containing advertisements and organic search results. On mobile devices, the info boxes appear immediately after advertisements, but ahead of general search results. Each info box has three tabs for navigation purposes: Overview, Symptoms, and Therapies. the mobile version provides links to pertinent media reports under a fourth tab ("Headlines").
To date, such info boxes are available for approximately 160 illnesses. The related text material is content provided by the FMH especially for the immediate display by search engines and comes with a markup. The info boxes retrieve this information via an open interface. That interface is, in principle, also available to other search engines.
The Google corporate group also offers info boxes on health topics in other countries, including, inter alia, the U.S. and the United Kingdom. Here, too, content is obtained from third-party sources, which are not necessarily governmental entities.
At the joint press conference [with Google], Federal Minister of Health Jens Spahn said, inter alia, the following:
"Whoever googles health information should land on our federal government's portal and find the information he needs. Gesund.bund.de should become the central go-to site for reliable health information on the Internet. Nothing is a more obvious choice than to cooperate directly with Germany's most popular search engine, i.e., Google. On Google, the {NHP's] answers to a search query involving medical keywords will be presented in a prominently exposed info box. [...] I am certain that this collaboraiton with Google gives an enormous awareness boost to the [NHP], and this coooperation will ensure that this portal can become one of the most important go-to sites for citizens looking for online health information."
He furthermore declared:
"As we are interested in conveying objective, well-founded, evidence-based information, it doesn't do me any good to be listed by Google in the 783,000th place."
The total traffic volume generated by Google Search for Plaintiff/Movant's website remained at largely the same level after the launch of the info boxes and amounts to approximately 4 million clicks per week. The traffic trend is, therefore, consistent with the same period of the year 2019 and the one in Austria, where Defendant's Google Search does not display info boxes on health topics. During the period from November 10 to December 9, 2020, gesund.bund.de received 283,256 clicks via the Google Search, while Plaintiff/Movant received 17.674 million clicks, i.e., approximately six times the volume. The number of clicks on these links accounted for 0.06% of all clicks of health portals listed on search results pages.
However, with respct to particular illnesses, both the number of accesses and the so-called click rate dropped in the second half of November. The click rate, or click-through rate, is defined as the number of pageviews per impression, i.e., per display of Plaintiff/Movant's page among the organic search results. While user traffic via Google queries generally increased during the year 2020, Plaintiff/Movant lost 5% of its desktop and 10% of its mobile traffic in the period from November 9 to 16, 2020, in connection with 19 particularly high-traffic illnesses. For select so-called Basic Search Terms, which Plaintiff/Movant describes as terms generating a high search volume and which are key to [Plaintiff/Movant's] monetization efforts (arthrosis, cystitis, bronchitis, depression, epilepsy, erysipelas, gallstones, gastritis, prostate cancer, hypothyroidism, typhoid fever, [another term meaning] erysipelas, and neurodermatitis), the click rate dropped by approximately 32.5% between November 5 and 14, 2020--notwithstanding otherwise stable visibility paraemters (i.e., continued appearance among the first organic seaerch results) and a generally positive trend. Plaintiff/Movant conducted a further analysis showing that pagreviews on its website relating to "white skin cancer" dropped by 10.9% (13.9% on mobile devices), and by 17.3% (mobile access: 19.2%) for "cystitis." Even though the average ranking of those pages remained constant oder even improved slightly, the click rate dropped by approximately 23% between November 2 and 16, 2020. A subsequent analysis performed by Plaintiff/Movant showed a decline of the average click rate relating to four commercially particularly relevant illnesses: 37.1% (cystitis), 31.1% (irritable bowel), 15.6% (hemorrhoids), and 31.8% (lactose intolerance). With respect to further studies, reference is made to Plaintiff/Movant's pleadings.
Plaintiff/Movant attributes the above-mentioned--and factually undisputed--developments to the prominently exposed info boxes containing the NHP's content, and brings antitrust and competition claims against Defendant.
Plaintiff/Movant initially bases its prayer for injunctive relief (item 1) on § 33.1 of the GWB [Act Against Restraints on Competition, "Competition Act"] in conjunction with § 1 Competition Act and Art. 101 para. 1 TFEU.
PLaintiff/Movant argues in this regard that the cooperation between Defendant and the FMH is based on a cooperation that is restrictive of competition as evidenced by Defendant's joint press conference with the Federal Minister of Health. According to Plaintiff/Movant, it expresses the joint intent by Defendant and the FMH to provide, in a coordinated fashion, the NHP's content on Google Search exclusively in a special advertising format--the info boxes--exclusively reserved for this purpose, aiming on the one hand to allegedly make Google Search more attractive for its users and on the other hand to disseminate the content of the NHP more broadly than it would be possible in the absence of this cooperation. In Plaintiff/Movant's opinion, this suffices to make a showing of an agreement. The FMH, Plaintiff/Movant argues, is acting as an enterprise as it starts to compete, through its NHP, with private-sector providers.
This cooperation, Plaintiff/Movant says, aims at and results in a significant restraint of competition. Plaintiff/Movant argues that, given the large extent to which all health information portals depend on Google Search's intermediary service, the vertical combination of search engine and info boxes is likely to reduce or even completely eliminate competition in this market. Such an effect is, according to Plaintiff/Movant, the object of theagreement, as the collaborators strive to make NHP the central go-to site for online health information to the detriment of all other providers.
Plaintiff/Movant bases its argument for the existence of a restraint of competition on the fact that Defendant draws users' attention to the prominently displayed info boxes. In this context, Plaintiff/Movant points to behavioral economics explained by the European Commission in its "Google Search (Shopping)" case. User demand for health-specific information is, according to Plaintiff/Movant, already satisfied within the search results pages. This is Defendant's intent, Plaintiff/Movant argues, as its repeated statements show that it considers this to constitute product innovation. Even if there still remained some further demand for information, Plaintiff/Movant considers it more likely that users click on the links in the info boxes than that they would search for further information among the organic search results. Plaintiff/Movant considers this effect to be particularly strong on mobile devices, as organic search results have been pushed far down due to the info boxes.
This redirection [of traffic] and the visibility loss is proven by a reduction in traffic and click rates, Plaintiff/Movant says. The only plausible reason from Plaintiff/Movant's perspective is that the visibility of the generic search result from NetDoktor.de is reduced by the NHP box. Plaintiff/Movant contradicts Defendant's position that the total traffic volume on Plaintiff/Movant's website had only changed nominally. Instead, Plaintiff/Movant attaches particular relevance to the sudden "discrepancy" between the number of impressions and the number of clicks, as reflected by the click rate.
Plaintiff/Movant furthermore claims to suffer in qualitative terms. Due to the negative trend, PLaintiff/Movant says it is forced, due to previous guarantees given to advertisers regarding the size of the audience, to compensate for the declining number of pageviews, which in turn reduces the quality of what it can offer to advertisers. As a result, PLaintiff/Movant claims to be forced to display ads on less relevant subpages. This, Plaintiff/Movant argues, distances the advertisements from the topics [of the pages], resulting in [losses resulting from a less targeted placement of advertisements].
At the same time, Plaintiff/Movant argues, the federal government's NHP has enjoyed a sudden increase in visibility, which, for instance, on November 13, 2020, amounted to 200% of the previous day's figures. In the meantime, the NHP has allegedly made further headway among the organic search results. For example, Plaintiff/Movant says that the NHP has since January 2021 already been listed in the fourth position of the first search results page for the term "white skin cancer." This now makes the NHP a direct rival for the position that the long-established, high-quality health portal [name redacted out] has, says Plaintiff/Movant.
Plaintiff/Movant attributes this to secondary effects: as a result of users clicking on the links to the NHP found within the info boxes, relevance is signaled, which the self-learning Google algorithm converts into higher rankings. The long-term effect--Plaintiff/Movant argues--would be that the NHP would sooner or later also appear as the first organic and, therefore, seemingly most relevant search result. By arguing that the mere placement of the info boxes and a click on a link contained therein does not influence the Google algorithm, Defendant omits, in Plaintiff/Movant's opinion, that an increase in the number of pageviews, irrespectively of the source, does have a positive effect on the ranking--a fact that is not in dispute.
This effect--Plaintiff/Movant argues--is not due to [Google] considering Plaintiff/Movant's content to be less relevant, but the better position and related competitive advantage of the NHP is achieved in circumvention of the general relevance determination by [Google's] algorithms. Plaintiff/Movant describes it as extremely difficult to counter a loss of a relevance rank through effective measures, which is why it would, according to Plaintiff/Movant, at some point become impossible to restore competition by deactivating the info boxes. For advertising-financed health portals, Plaintiff/Movant argues, it is not financially viable to compensate for diverted search traffic through Google Ads text advertisements or [advertisements in] mobile apps. The loss of traffic from users would--Plaintiff/Movant asserts--lead to a downbound spiral of programmatic ads and keyword-based targeting by the advertising customers of independent health portals and, therefore, endanger their financial viability. The reductions in traffic from users already affects--Plaintiff/Movant avers--all advertising contracts concluded for the year 2021, as Plaintiff/Movant takes the negative trend into account when calculating the number of placements of advertisements promised to its advertisers.
Plaintiff/Movant claims that this provides Defendant itself with a competitive advantage. There is--in Plaintiff/Movant's representation--substitutive competition between advertising on search engines and other online advertising channels; with both parties' platforms being advertising-financed, Plaintiff/Movant considers Defendant a rival competing for the same advertisers and health information-related budgets. By integrating the info boxes [into its search results pages], Defendant has allegedly gained further attractiveness as an advertising channel by comparison to health information portals. Plaintiff/Movant says some of its major advertisers already told it that they could--or might even be forced to--reallocate some of their budgets to Google Ads text advertisements.
Plaintiff/Movant does not consider the agreement [the one between Google and the federal government] to be justifiable in accordance with § 2 Competition Act, Art. 101 para. 3 AEUV. It argues that Defendant had failed to sufficiently substantiate any potential efficiency gains. In Plaintiff/Movant's opinion, such efficiency gains do not exist, as the content of the info boxes is no less reliable than quickly and easily accessible health information that is available on the Internet at any rate. Furthermore, Plaintiff/Movant argues the restraints of competition are, at a minimum, unnecessary. In order to achieve the desired effect of providing only a first reliable overview of a particular illness, Plaintiff/Movant believes a less detailed presentation of information would have been sufficient and would have made it less likely that users' appetite for information would be satisfied in its entirety. Plaintiff/Movant also notes that links to (exclusively) the NHP would not be necessary to achieve this objective.
Plaintiff/Movant furthermore brings a claim for injunctive relief under § 8 paras. 1, 3, and 4.4 of Unfair Competition Law, arguing that Defendant unfairly restricts Plaintiff/Movant['s ability to compete] through the info boxes.
Plaintiff/Movant Plaintiff/Movant furthermore bases its second prayer for injunctive relief on § 33 para. 1 Competition Act in conjunction with § 19 Competition Act, Art. 102 TFEU. According to Plaintiff/Movant, Defendant abuses its dominant position in the search engine market to cause anticompetitive effects, particularly in the market for health information portals by discriminating against Defendant and other competing portals, and by self-preferencing and an illegal technical combination of search engine and info boxes as two separate products, without an objective justification.
Additionally, Plaintiff/Movant claims to be entitled to injunctive relief under § 8 paras. 1, 3a UCL in combination with § ,94 Media Service State Treaty [a German piece of Internet regulation in the form of an agreement between the country's federal states]. Also, Plaintiff/Movant is seeking an injunction under § 8 paras. 1, 3a UCL in conjunction with Art. 5 para. 1 of the German Basic Law [the country's de facto constitution] as Defendant allegedly aids and abets through its display of the info boxes the FMH's violation of the constitutional imperative that the press be at arm's length from the government.
[The ruling then quotes the original first prayer for injunctive relief, and notes that it was withdrawn in part during the course of the oral hearing on January 20, 2021. The modified first prayer for relief is materially consistent with the injunction that has meanwhile been actually granted, see the first part of this unofficial translation. But there was also a second prayer for injunctive relief, which I will translate below; that one was not granted.]
2. Defendant is enjoined from employing, for the positioning and display of content of the FMH's website (https://gesund.bund.de) or links thereto on the general sarch engine results pages, other processes and methods than those applied to the content of Plaintiff/Movant's website (www.netdoktor.de), especially if this occurs due to the display of content exclusively afforded to the FMH's website (https://gesund.bund.de) in the form of Knowledge Panels with health information and links, as shown by way of example in the screenshots of November 24, 2020, under item 1.
Defendant requests that the {entire] motion be denied.
Defendant consents to a partial withdrawal of the motion, which could be seen in the [modified] prayers for relief stated by Plaintiff/Movant in the oral hearing, but objects to any amendment to or extension of the motion that might lie in the new version of the prayers for relief.
Defendant criticizes the indeterminate nature of the prayers for relief, including the new version of the prayers for relief, and the unclear interdependencies between the first and second prayers for relief.
Defendant is of the opinion that the FMH, as operator of the gesund.bund.de health information portal, does not act as an enterprise, but fulfills its governmental task of protecting public health. According to Defendant, the FMH does not become an economic operator and does not pursue commercial interests. The fact that the governmental action does not generate revenues is, according to Defendant, a strong indication of the absence of any entrepreneurial context. The fact that private entities could publish the same information does not--Defendant argues--alter the character of governmental efforts to inform. Defendant says that ECJ case law requires clear indications if governmental actions were to be viewed, for an exception, in an entrepreneurial context.
Defendant furthermore claims that there is no contractual agreement between itself and the FMH, and particularly no obligation to cooperate exclusively or to make payments. Instead--Defendant claims--the cooperation is limited to Defendant carrying certain content from the "Illnesses" section of the gesund.bund.de portal. Any--disputed--harm to Plaintiff/Movant would, acording to Defendant, at most result from Defendant's prior, unilateral, fundamental decision to display info boxes for certain illnesses as part of the German Google Search, but not from a decision to select a particular source. Defendant argues that its choice of a source is irrelevant to the visibility of other search results. Therefore, Defendant denies the existence of a causal nexus between the alleged agreement and the alleged harm.
Defendant claims to have engaged in coordination with the FMH and the agency retained by it [to create the gesund.bund.de portal] solely for the purpose of implementing its choice of the gesund.bund.de portal [as the source of the content of its info boxes]. Defendant describes it as a technical necessity to preselect a particular source as the info boxes do not use the full text found at the source, making it a requirement that the source mark up the exceprts to be displayed in the info boxes, which enables the automatic identification and transmission of the text fragments relevant to Google Search by means of a query. Furthermore, Defendant says the preselection is necessary in order to ensure the consent of the operator of the chosen website. Also, Defendant says it had to ascertain whether the content of that portal met its linguistic and editorial criteria. However, any coordination was limited to those aspects, Defendant avers.
Defendant holds the view that the--disputed--agreement with the FMH neither has the object nor the effect of a restraint of competition. Defendant says the indispensable requirement of a binding agreement between Defendant and the FMH is not met. In any event, Defendant says the sole effect of its cooperation with the FMH is the immediate provision of reliable health information to the users of Google Search. According to Defendant, this is pro-competitive, as the Hamburg Regional Court held in its April 4, 2013 decision (case no. 408 HKO 36/13) when analyzing the provision of weather-related information on the basis of unilateral conduct. Therein, Defendant argues, lies neither an intended nor an actual restraint of competition. Furthermore, Defendant denies the presence of any abusive unilateral conduct.
Defendant disputes Plaintiff/Movant's allegations of negative effects on the order of search results.
With respect to Plaintiff/Movant's allegation of reduced traffic relating to 19 select search terms in the week from November 9 to 16, 2020, Defendant responds that in 18 of those 19 cases (the sole exception being "Alzheimer") users entered those search terms less frequently in that particular week (for example, cystitis or hypothyroidism). Defendant attributes the--minimal at any rate--decline in the numberr of clicks on Plaintiff/Movant's website in those particular cases to reduced interest as opposed to the display of info boxes. Therefore, Defendant denies that there is a correlation between the so-called click-through rate to Plaintiff/Movant's portal and the introduction of the info boxes.
Defendant also dismisses Plaintiff/Movant's claim that the display of info boxes afforded the FMH a lasting and irreversible competitive advantage. According to Defendant, this is already stablished by the low number of clicks on the links in the info boxes and the fact that Plaintiff/Movant still has a multiple of the number of users as the NHP. Defendant says any increased visibility of gesund.bund.de [presumably this refers to the NHP's ranking among organic Google search results] can be explained with public attention as a result of the FMH's press conferences.
Defendant argues that Plaintiff/Movant would have to allege a specific revenue loss. Defendant considers it insufficient to base a prayer for injunctive relief on insinuations and concerns. Even after the introduction of the info boxes, Defendant says, traffic on Plaintiff/Movant's portal as a result of clicks on search results in the search results list of Google Search did not decline. Since December 2020, Defendant considers this perspective to have been validated further, such as by way of the comparison with development in Austria, where so far no info boxes on illnesses are displayed.
Defendant denies that there are discernible negative effects of the info boxes on competition. In this context, Defendant alleges that there is no threat of Plaintiff/Movant's portal being ranked lower in the search results list. Defendant claims that the algorithm that determines the order of search results ignores clicks on the links to the gesund.bund.de site that are found inside the info boxes. Defendant denies that the display of an info boxes in response to search queries is a factor for the algorithm that determines the ranking of search results within the search results list.
Defendant claims that the info boxes presenting content of the gesund.bund.de portal are structurally and functionally disparate from health information portals such as the one operated by Plaintiff/Movant. Google's special info boxes on illness are not a substitute for the offerings of health information portals, Defendant says. They [the info boxes] represent, according to Defendant, an informational starting point with short, factual, basic information, according to Defendant. Defendant says the info boxes are meant to help users, with extremely diverse, far-reaching and more detailed information, in terms of a controlling and supporting function. Defendant says the purpose of the info boxes is not to provide exhaustive information, as shown by the prominent pointer to "further information." All that Defendant admits to import from the NHP is information on illnesses. Defendant describes such information as purely factual information as opposed to editorial content. According to Defendant, this sets the content of the info boxes apart from Plaintiff/Movant's portal.
The direct display of health information in info boxes, according to Defendant, has nothing to do with self-preferencing and, therefore, is fundamentally different from the European Commission's "Google Search (Shopping)" decision cited by Plaintiff/Movant (European Commission, June 27, 2017 decision, case AT.39740, summary in Exh. K6). According to Defendant, that case, unlike the present case, involved the allged preferencing, on the search results pages of the general Internet search, of another standalone service by Defendant. But the info boxes, do not constitute a standalone service offered by it, Defendant says.
Defendant also denies that the display of info boxes represents an additional source of (advertising) revenue for it that would result in the reallocation of advertising budgets, as Defendant says it generates Google Search revenues only through the display of advertisements. In that context, Defendant says, advertisers pay only if users click on advertisements. Defendant denies to compete directly or indirectly with Plaintiff/Movant for the same advertisers or advertising budgets. According to Defendant, the parties therefore operate in distinct online advertising markets.
Defendant argues that its agreement with the FMH, which it claims does not exist and is not restrictive of competition, would be exempt under Art. 101 para. 3 TFEU, § 2 para. 1 Competition Act. The display of info boxes represents an innovative product improvement to the benefit of users, as it saves time and is useful, Defendant claims. Defendant describes this as a new, innovative type of search results and, therefore, a qualitative efficiency gain in the form of a new feature directly beneficial to consumers. Defendant says consumers are directly, and in an organized and consistent form, shown reliable and authoritative basic information reated to their search queries on particular illnesses. Defendant claims to create added value through its search service.
Defendant claims that studies by the Bertelsmann Foundation and the AOK [a state-owned healthcare organization] (Exhibits AG 15 and AG 16) showed that there is a need on the part of German users for reliable information on the Internet. From this, Defendant says, follows that 57% of the users who know Plaintiff/Movant's portal do not consider it trustworthy. According to Defendant, no algorithm is suitable to the verification of the reliability of health information that goes into info boxes, which is why Defendant says its medical expert staff would firstly have to verify and ascertain the understandability of such material in order to meet Google's own standards, and therefore it needs to predetermine the source.
Defendant says it chose the FMH's portal as a source of reliable health information because all of its information on the topic of "Illnesses" is based on the findings of evidence-based medicine (EBM) and corresponds to current scientific standards. [I can't help but note that it is "rich" for Google to promote evidence-based medicine while distributing homeopathy crap through its Google Play Store, while disallowing COVID-related apps even if consistent with evidence-based medicine unless they come from a very few sources.] That information, Defendant says, is subsequently reviewed and validated by experts. Defendant argues the information is not affected by commercial or political interests. [It's just ridiculous that Google argues governments provide information without a political agenda.] According to its Gogole Surveys online polling service, Defendant claims 80% of users had stated that they place greater confidence in the information provided by the FMH on gesund.bund.de than information found on a portal such as NetDoktor.de. The editorially created text on Plaintiff/Movant's portal comes with spacious advertising banners, Defendant claims. The advertising also appear editorial in part, according to Defendant. Plaintiff/Movant's portal does not have to meet any standards and is not independent, and it could be sold to an acquirer anytime, Defendant argues.
Finally, filling the info boxes with content particularly from the FMH's source does not, according to Defendant, eliminate competition in the health information portal segment. As Defendant previously argued, it repeats its claim that there is not even the threat of a restraint of competition. According to Defendant, substantial traffic shifts have not occurred yet and are not expected to occur in the future as the info boxes serve different information needs than health information portals from the perspective of consumers.
Defendant argues that Plaintiff/Movant does not have any UCL claims as it does not compete with Defendant. The requirements in terms of conduct, Defendant says, are not met, nor are those under the Media Service State Treaty. Being based in Ireland, Defendant says it is not subject to the Media Service State Treaty. Furthermore, Defendant says § 94 of the Media Service State Treaty is not a rule of conduct in the marketplace, and is enforced only by state media authorities.
Defendant argues the balance of hardships, which is relevant to the analysis of the urgency [a requirement for a preliminary injunction], weighs against the motion. Plaintiff/Movant has failed, in Defendant's opinion, to make a sufficiently credible showing of negative effects (as stated above). In order to have claims under antitrust law, Defendant says those negative effects would have to border on an existential threat, which it says has not been shown. However, Defendant would be prevented from offering an important product innovation as a result of a preliminary injunction, Defendant argues. Defendant says the public interest in access to reliable health information should bear considerable weight.
The Court makes reference to the further representations by the parties in the pleadings and their exhibits as well as to the minutes of the oral hearing held on January 20, 2021. On January 22 and 26, 2021, the parties filed post-hearing briefs without having granted leave, and those briefs did not persuade the court to reopen the oral hearing (§ 156 Code of Civil Procedure). The Court took note of the parties' legal argument. [In Germany, counsel is always free to make legal argument to the court, even post-trial, but factual representations are ignored if they are out of time and were submitted without leave.]
Reasons for the decision
Plaintiff/Movant's first [the injunction as granted] and third [the standard PI sanctions] prayers for relief are admissible and meritorious. There is an entitlement to an injunction and the additional criteria for a preliminary injunction are met as well. Plaintiff/Movant is, therefore, granted an injunction as ordered, based on § 33 para. 1 Competition Act in conjunction with § 1 Competition Act, Art. 101 para. 1 TFEU.
The second prayer for relief was inadmissible and, therefore, had to be dismissed.
I.
Plaintiff/Movant's first and third prayers for relief are admissible, and the first prayer for relief is, in its final form [as stated at the oral hearing], of sufficient specificity. Defendant's related criticism has been addressed in part by the modification of the prayers for relief. Defendant's doubts about which forms of collusion are meant to be barred is irrelevant, provided that--as the new prayer for relief requires--the object of collusion is the exclusive prominent display of the info boxes. Given that Plaintiff/Movant did not declare its second prayer for relief to be an auxiliary request, the Court assumes that both prayers for relief are independent of each other. [If NetDoktor.de had made its second prayer for relief an auxiliary request, it would have been treated as a fallback position in the event the first prayer for relief had failed; as the first prayer for relief succeeded, the court would then never have reached the auxiliary request.]
The modification of the first prayer for relief was not an amendment to the complaint, but a limitation of the original prayer for relief to a specific infringing act. § 264(2) Code of Civil Procedure, in conjunction with an otherwise admissible partial withdrawal of a complaint, § 269 para. 1 Code of Civil Procedure. Defendant consented to the partial withdrawal of the complaint, which would have been admissible regardless (cf. Dusseldorf Higher Regional Court, order of July 13, 1982, case no. 2 U 54/82 - NJW 1982, 2452).
The first prayer for relief had to be made more specific in light of the argument made, as Plaintiff/Movant seeks a prohibition of an infringing action that is based on previous coordination between Defendant and the FMH. On the one hand, Plaintiff/Movant omitted that reference in its new prayers for relief, which might indicate that it no longer seeks to capture that agreement. On the other hand, Plaintiff/Movant unambiguously and exclusively bases the argument for its first prayer for relief on Art. 101 TFEU and, respectively, § 1 Competition Act, and on the agreement between Defendant and the FMH, not on unilateral conduct on Defendant's part. Therefore, concerted behavior had to be part of the wording of the injunction, as the core of the infringing action.
The second prayer for relief is inadmissible for lack of specificity. Neither does it make clear which processes and methods on Defendant's part are meant nor whether it is meant to be limited to the display of info boxes or also meant to capture organic search results. The word "particularly" suggests it is not meant to be limited. But without being limited to a specific infringing action there is no discernible boundary to the scope of such prayer for relief.
II.
Plaintiff/Movant is entitled to an injunction against Defendant's cooperation with the FMH in terms of the display of content of the gesund.bund.de portal in info boxes reserved for the FMH and which link to the NHP. § 33 para. 1 Competition Act in conjunction with § 1 Competition Act, Art. 101 para. 1 TFEU. This entitlement to an injunction also includes the elimination of a situation that has arisen from the previous agreement: the accused info boxes.
The cooperation between Defendant and the FMH constitutes an agreement between undertakings that results in a restraint of competition. Art. 101 para. 1 TEFUE, § 1 Competition Act.
a. Defendant entered into an agreement with the FMH, the substance of which is that Defendant's envisioned info boxes on health topics are filled exclusively, and permanently, with content from the FMH's health information portal and with a link to the gesund.bund.de portal.
(1) An agreement comes into being as soon as a principle congruence of wills has been reached between two parties. Neither is it necessary to set out all details nor is it required that the parties share an identical interest (Immenga/Mestmäcker/Zimmer, 6th edition, 2019, Art. 101 para. 1 TFEU, margin no. 68).
The character of an agreement is easily established by contracts under civil law, i.e., in the case that two parties are bound to congruent declarations of will. But, in accordance with the jurisprudence of the European courts, it is also sufficient that the parties express their mutual will to behave in the market in a certain way, and this is so even if they do not believe to have a legal, factual, or moral obligation to do so (Immenga/Mestmäcker/Zimmer, 6th edition, 2019, Art. 101 para. 1. TFEU, margin no. 71, with further citations).
(2) Led by such mutual will, Defendant and the Federal Minister of Health clearly showed at their joint press conference on November 10, 2020, their intent to henceforth exclusively collaborate on the creation of info boxes on health topics on Defendant's search results page. The representatives of Defendant and the Federal Minister of Health repeatedly and explicitly talked about their collaboration or cooperation. According to the mutually-corroborating representations by both, the object of this cooperation was that, if a user searches for medical keywords, the NHP's answers would be presented on Google's search results page in a prominently exposed info box. The Federal Minister of Health repeatedly and clearly exrpessed his gratitude toward Defendant for this cooperation and for the future prominent display of the NHP's information and the links.
With those statements, Defendant's claim that there was no agreement between the FMH and Defendant beyond a coordination of technical details is absolutely irreconcilable. Even if one wanted to assume that Google's [Defendant's] executives used promotional or non-technical language, that would not explain what the cooperation, announced with significant media attention, should be based on if not an agreement between the parties [to the agreement]. The joint press conference alone presupposes that the parties [to the agreement] had coordinated that they would make an announcement, and what they would announce. The result was not the announcement of particular technical details, the format of the text material provided, or the specifics of the interface created. Instead, what was expressed was mutual excitement over the fact that the two parties [to the agreement] would, generally speaking, together see to it that the NHP's content--and exclusively that one--would be displayed in the info boxes and, thereby, link to the gesund.bund.de website.
The exclusive nature of this cooperation was also expressed at the press conference: no announcement was made of any similar cooperation by Defendant with other health information portals. Even Defendant does not flatly deny this exclusive nature. Much to the contrary, Defendant even argues--which differs from the info boxes on health topics displayed by the Bing search engine based on content from different databases--that such cooperation would have to be generally exclusive, as it would have to preselect a content provider and verify the suitability and accuracy of the content.
Defendant does, however, also argue that there was no term during which the Defendant and the FMH would be bound. Instead, Defendant says it did not enter into any obligation, but could at any point in time commission a different health information portal with the provision of content for the info boxes. However, this claim is diametrically opposed to the type of cooperation announced at the press conference. While it does appear correct that no specific term was agreed upon, there can be no doubt that this cooperation was intended to last.
The clearly articulated intent and purpose of this cooperation, according to the uncontradicted statement by the Federal Minister of Health, was at least for the minister that the NHP would be established as the leading go-to site for health information on the Internet. The FMH thereby came--which was also clear to its partner--from the assumption that this cooperation would put the NHP into that position, which means it would have to last long enough for the NHP to gain a decisive advantage over other, private providers competing for visibility on the Internet. The Federal Minister of Health expected the following effects from this cooperation: "Whoever googles health information should land on our federal government's portal" and "Gesund.bund.de should become the central go-to site for reliable health information on the Internet". Clearly, the FMH did not perceive this cooperation to be in place for only a short period of time, and the statements by Defendant's representatives do not indicate otherwise. What also counsels against a short term is the non-negligible effort made by the ministry in order to create dedicated text material and digital markups in order to enable the importation of its content into the info boxes. Both parties to the agreement corroboratingly stated that they would start with 160 illness terms and intended to further expand on this cooperation. Nothing in this suggested a cooperation for only the short term or the mid term.
b. In connection with its operation of the gesund.bund.de portal, the FMH must be categorized as an enterprise.
(1) The term "enterprise" ["undertaking" in EU law] must be understood in a functional sense. Its meaning is to be derived from the statutory context and the objectives of the relevant competition rules. As a result, any entity carrying out an economic activity, independently of its legal form and the way it finances itself, is an enterprise for the purposes of copetition law (ECJ, decision of April 23, 1991, Rs. C-41/90, Slg. 1991, I-1979 margin no. 21 "Höfner und Elser"; ECJ, decision of September 10, 2009, Rs. C-97/08 P, Slg. 2009, I-8237, margin no. 54 "Akzo Nobel"; Immenga/Mestmäcker/Zimmer, 6th edition, 2019, Art. 101 para. 1 TFEU, margin no. 9).
An economic activity is, in principle, any independent activity that consists of the offering of goods or services, for the purpose of revenue generation, on a particular market (cf. Dusseldorf Higher Regional Court NZKart 2017, 247 250, with further citations). The determinative aspect is not whether the enterprise in question collects a payment; what matters is whether, in the relevant market affected by a restraint of competition, the service provided is usually offered for pay--if so, the one who provides a free service is also an enterprise and, therefore, subject to Art. 101 para. 1 TFEU (Bechtold/Bosch/Brinker, 3rd edition, 2014, Art. 101 TFEU, margin no. 14).
There is no economic character that would justify the application of competition law if activities are performed as a government discharges its public-administration duties (cf. ECJ, decisions of January 19, 1994 - C-364/92, Slg. 1994, I-43 - SAT-Fluggesellschaft; Dusseldorf Higher Regional Court NZKar 2017, 247, 250, with further citations, beck-online). However, to the extent that a governmental entity carries out an economic activity that could be separated from its public-administration duties, it acts as an enterprise with respect to such activity (cf. ECJ, decisions of March 26, 2009 - C-113/07, Slg. 2009, I-2207, margin nos. 71 et seq. - Selex Sistemi Integrati/Commission; July 12, 2012 - C-138/11, WuW/E EU-R 2472, margin no. 38, Compass-Datenbank; Dusseldorf Higher Regional Court ibd.).
(2) The operation of health information portals is a commercial activity that consists of offering a service, particularly the provision of information relating to health questions, for Internet users. The undisputedly substantial demand for such an offering is presently and has previously been met by a multitude of private-sector providers, such as Plaintiff/Movant, through typically advertising-financed portals. The National Health Portal is such a health portal, regardless of its financing mode, which is irrelevant in this context. It does not play a role that the NHP may possibly use a simpler language or a particularly structured presentation as compared to other offerings on the Internet. Such characteristics may represent a competitive factor that sets the FMH's offering from others. Similarly, the NHP's articles may be less detailed than those of other portals. It is already questionable whether it constitutes greater neutrality to omit controversies on topics such as vaccination. In any event, those special characteristics do not outweigh the similarities between the portals and fail to make the NHP a category of its own. Instead, the portals' similarities are overwhelming: just like other health portals, the NHP also provides editorial information on health questions of all kinds, portrays illnesses, and makes recommendations for a healthy life style. Notwithstanding differences in presentation and the circumstance that Plaintiff/Movant's portal displays advertisements, there must be a presumption of the functional substitutability of the portals from the perspective of the other side of the market--consumers searchging for health information on the Internet--in light of the far-reaching overlaps in content and the portals' mission statements. That was also the FMH's assumption when it sought tenders and stated that the NHP should "close a significant gap in the traditionally commercially oriented market of digital health information on the German-language Internet" (cf. Exhibit K19, *7). Last not least, the circumstance that both portals are offered alternatively by Google Search to users in order to satisfy the same need for information speaks to their functional substitutability.
The operation of health information was not previously and need not generally and necessarily in the future be performed by governmental entities (cf. ECJ, decision of April 23, 1991, Rs C-41/90, margin no. 22).
In principle, it is free of charge for users to utilize health information portals if those are private-sector, advertising-financed portals. However, in those caes the acceptance of advertising must be seen as compensation, thereby constituting an economic activity.
It is unavailing that Defendant argues that the FMH carry out public duties through the operation of its gesund.bund.de NHP, specifically, to educate about health. The participation in general commerce by a governmental entity does not lose the character of a commercial activity subject to competition law only because it is also meant to fulfill public duties or to serve the public interest. If a governmental entity--as in this case--avails itself of means that are subject to civil law, it is subjected to the same limitations as any other participant in a private-sector market and, therefore, particularly has to respect the limits to such activity prescribed by competition law (Federal Court of Justice WuW/EDE-R 289, 293 - Lottospielgemeinschaft).
c. Through their cooperation, Defendant and the FMH cause a restraint of competition in the market for providers of health information on the Internet.
(1) In this regard, contrary to Defendant's position, the standard is not whether a restraint of competition is intended. The ECJ applies an objective standard to the question of whether an intended restraint of competition is identified. According to that standard, it does not matter what the parties to an agreement intend--although such intent can be viewed as an indication of the suitability of an agreement to a restraint of competition--, but whether the relevant activity has an objective competition-restraining tendency. In order for an anticompetitive purpose to be found, the coordination must harm competition based on its nature alone. Therefore, it must show sufficient harm to competition in and of itself, which obviates the need for an inquiry into its effects (Immenga/Mestmäcker/Zimmer, 6th edition, 2019, Art. 101 para. 1 TFEU, margin no. 130).
Such an objectively harmful tendency, which has been presumed to be present in horizontal price-fixing, geographic non-competes and vertical price-fixing, is no inherent to the agreement between Defendant and the FMH.
(2) Therefore, the exclusive agreement must be judged based on its concrete effects. Based on Plaintiff/Movant's pleadings and affidavits, the potential and actual effects and the declared objective of the parties to the agreement, one must conclude that the agreement between Defendant and the FMH actually and tangibly restricts competition in the relevant market.
(a) With respect to the restraint of competition, the focus is on the actual effects, i.e., the objective consequences of the agreement for the market. Competition-restraining effects are present if the agreement leads to a restraint of competition in the sense of a limitation of the options of third participants in the market with respect to their actions and choices (Mü-Ko WettbR/Säcker/Zorn, third edition, 2020, ARt. 101 TFEU, margin no. 274).
For the identification of the objective consequences, one must examine the causal relationship between the agreement and the current competitive situation. At least hypothetically, the agreement must cause the existing competitive situation. In accordance with applicable case law, a counterfactual must be analyzed, i.e. a juxtaposition of the current competitive situation with the hypothetical situation that would be the case if not for the performance of the agreement in question. Not only actual, but also potential effects on competitoin must be considered, at least in situations, in which an agreement has not been implemented, and such situations in which an agreement has been implemented, but its effects, though likely to occur, are not yet identifiable. This is due to the preventive nature of the prohibition (MüKo WettbR/Säcker/Zorn, 3rd edition, 2020, Art. 101 TFEU, margin nos. 275, 277).
(b) The options for Plaintiff/Movant's actions and choices are substantially restricted by Defendant's agreement with the FMH because, on a permanent basis, the best possible position on Google's search results page--that is, the newly created, proinently-exposed position "0" in the info box--is exclusively reserved for the NHP's content, and therefore unavailable to competitors.
Here, the relevant market is the one for offerings of health information portals on the Internet, a market in which Plaintiff/Movant and the FMH are active as providers of substantially similar health information portals (as explained above). With its market share of more than 90%, Defendant is the market-dominating provider in the upstream market of the provision of general search services in Germany. Plaintiff/Movant's representation that in the vast majority of cases (88-90%) users find their way to health portals via the Google Search is undisputed. Therefore, the operators of health information portals are to a particularly high degree dependent upon achieving good visibility on Defendant's search reluts page in order to be visited by users and to generate traffic from users that can in turn be monetized through advertising contracts. So far, portal operators had the possibility at their disposal to reach the top region of the search results page by competitive means, particularly either the creation of particularly relevant content or further optimization measures with respect to their ranking in the organic search results, or--at least theoretically--through the purchase of advertising space. Now, however, besides or above the organic search results there is an info box reserved exclusively for the NHP's content, and to which the FMH's competitors in the market for health information portals will for the foreseeable future not have access.
It is obvious that Plaintiff/Movant must fear, as a result from this, substantial competitive harm. A central marketing tool is removed from competition and exclusively granted as a "pole position" to the FMH, a competitive advantage that cannot be compensated for by other means. PLaintiff/Movement has sufficiently substantiated that users primarily take note of the topmost results on the sea4rch results page. On the one hand, Plaintiff/Movant referenced the behavioral economics-based explanations by the European Commission in its "Google Search (Shopping)" case. On the other hand, it is consistent with general experience that users are more inclined to visit the topmost results of a search query. Not least is it the stated goal of the parties to the agreement to draw the attention of users to the NHP's content through the prominently displayed info boxes. As evidenced by their statements at the press conference, Defendant and the FMH come from the assumption that those [info boxes] are more likely to be noticed by users than the remaining content of the search results page.
To the extent that Defendant asserts that the info boxes merely provide basic information that gives a first overview without substituting the information offered by Plaintiff/Movant, that argument is at least contradictory. Defendant itself emphasizes in a different context that the info boxes provide direct answers to search queries and meet demand for health information in a time-saving and targeted fashion. Furthermore, that claim is irreconcilable with the actual content of the info boxes, which contains sufficient answers for some information seekers, and with the actual effects substantiated by Plaintiff/Movant.
It may very well be that the users make little use of the links to the NHP, as Defendant claims. However, the reduced click rate on Plaintiff/Movant's page suggests that a large number of users abort their searchdue to the info boxes that already satisfy their need for information. What has been sufficiently credibly substantiated is that the info boxes caused (though disputed by poionting to otherwise equally occurring fluctations in the number of accesses) of the--undisputedly--reduced click rate for certain health terms. Plaintiff/Movant selected health terms for which the ranking in the organic search results during the relevant period was constant, making a reduced click rate attributable only to reduced visibility. Also, a correleation between the extent of the loss of visibility and the reduced click rate is suggested by the fact that this reduction is even greater on mobile end-user devices, where the [vertical] arrangement of ads, info boxes and organic sarch results requires scrolling further down in order to the organic search results.
An alternative explanation for the reduced click rate has not been given by Defendant, who instead stressed over and over that--also by comparison with Austria--the (in Defendant's opinion) solely relevant and monetizable total traffic on Plaintiff/Movant's website remained constant. It is, however, unpersuasive that nominal traffic should be a better indication of [anti-]competitive effects of the accused agreement than the click rate. Nominal traffic figures do not state how that traffic would have developed if not for the accused agreement, which is, however, essential to the analysis of the [anti-]competitive effects. The click rate makes that connection at least approximatively by measuring the development of clicks on a website with a constant ranking [among organic search results] and a constant number of impressions. If Plaintiff/Movant's search results are shown at a constant frequency and with a constant rank, but clicked on less frequently, and this effect occurs simultaneously with the introduction of the info boxes, it is a clear indication that even a well-positioned organic search result has lost some attention due to the info boxes.
It may very well be that the analyses provided by Plaintiff/Movant merely have the character of examples and that no specifically suffered revenue loss can be quantified. In this case, Plaintiff/Movant can point to the above-mentioned potential effects of the accused agreement, as the short term during which the info boxes have appeared was in all likelihood insufficient for the competition-restraining effects to materialize in full. Against this background, we do not need to consider the secondary effects Plaintiff/Movant is additionally concerned about and which one may fear as a result of a lower ranking due to more frequent visits to the NHP's website due to the info boxes and its effect on the Google search algorithm.
The negative effects prevent Plaintiff/Movant from providing its content to as many users as it could if not for the competition-restraining agreement. Placing costly advertisements in order to maintain visibility is not an economically equivalent alternative that Plaintiff/Movant could, or would have to, accept. As a result, Plaintiff/Movant can generate lower revenues from advertising and, therefore, has less room for investment in the improvement of its service than it could if not for the existence of the eye-catching info boxes.
To the extent that Defendant calls into question the causation of the restraints of competition by the agreement, emphasizing that the creation of the info boxes is based on a unilaterally-made decision and coordination with the FMH was, at most, necessary for its implementation, this case is no different from any other case of a vertical agreement. Whatever deal is done by a company presupposes a unilateral decision by a corporate officer to make such deal. This situation is no different. The effects on competition do not result from an enterpreneurial decision to introduce info boxes, but from the agreement, with which it is implemetned, i.e., the agreement with the BMG to cooperate exclusively to fill the info boxes with content and links, and the performance of that agreement.
(3) An exemption of the agreement under Art. 101 para. 3 TFEU or, respectively, § 2 Competition Act is not possible. The agreement does not contribute to the improvement of the production or distribution of goods or the promotion of technical or economic progress.
The eemption under Art. 101 para. 3 TFEU applies to agreements that generate efficiency gains. A distinction is made between qualitative and quantitative efficiency gains. The agreement must result in objective advantages capable of compensating for the negative effects of a restraint of competition. In accordance with longstanding ECJ jurisprudence, this requires that the positive effects of the competition-restraining agreement must ultimately increase public wealth (Immenga/Mestmäcker/Ellger, 6th edition, 2019, Art. 101 para. 3 TFEU, margin no. 134).
If there is an objective benefit, it must be analyzed with a view to the [European] Union's public interest. It is not sufficient for two parties, as a result of their agreement, to merely have a more reliable basis for planning and to be able to more efficiently organize their logistics. Instead, there must be an effect on the market that is in the interest of the Union (MüKo WettbR/Wolf, third edition, 2030, Art. 101 TFEU, margin nos. 1083, 1084).
The participating companies must plead a plausible estimate of the extent of the expected benefits that can be juxtaposed to the harm caused by the restraints of competition (cf., Immenga/Mestmäcker/Ellger, 6th edition, 2019, Art. 101 para. 3 TFEU, margin no. 138).
(4) Defendant has not met its burden of pleading and substantiating such compensatory efficiency gains.
(a) It is questionable whether the integration of syndicated content constitutes an improvement of a search engine, as this is ultimately less of an improvement of the search engine service than it represents an expansion of Defendant's [commercial] activity into another market, specifically the market of publishers or other content providers. Whether that content is encyclopedic or editorial, there is in any event an intentional reduction of choice and, therefore, the content is not entirely opinion-free. Defendant goes beyond its basic function of bringing together, as an Internet search engine, demand for products or services (such as information) and its providers, but also goes beyond the immediate response to factual queries (e.g. weather, height of the Eiffel Tower). Ultimately, Defendant steps outside the market of a pure search engine in the sense of an intermediary of products and users, and becomes a provider of such product by itself. On the one hand, it is consistent with the notion of performance-based competition to modify and improve products. On the other hand, if Defendant, on a permanent basis, places an info box with the NHP's content before the organic search results, it judges the various sources that would be available on the Internet to answer a search query by giving prominent exposure to one of them as the authoritative answer. In doing so, Defendant makes a preselection that is detached from the Google [page-ranking] algorithm. Not only is this less than transparent to users but it also constitutes a judgment on cntent and, ultimately, influences the public opinion-forming process. Objectively speaking, it appears at least doubtful whether this constitutes an improvement of a search engine.
(b) Even if one subscribed to Defendant's premise that its offering becomes more attractive by incorporating info boxes with immediately visible health information (cf. Hamburg Regional Court, order of April 4, 2013, case no. 408 HKI 36/13), this would not constitute an efficiency gain within the meaning of the exemption rule of Art. 101(3) TFEU.
Neither does making a single actor's product more attractive constitute an increase in overall public welfare nor has Defendant substantiated an effect on the marketplace that would be in the interest of the [European] Union. Such effect is not to be expected. The more attractive design of a single provider's offering cannot outweigh the downside resulting from the restraint of competition affecting all other participants in the market.
This is particularly true when--as in this case--a company with a dominant market position affords on a permanent basis, in its role as "gatekeeper" in the upstream search engine market and to the detriment of private competitors depending on it, a tax-financed offering by the government a "pole position" in the battle for users' attention in order to improve the attractiveness or, respectively, visibility of its own products. In this case, two operators who do not have to take much of an economic risk themselves, interfere with the market and complicate the access to users of already-existing players in the market, which in the market specifically affected in this case also comes with an impact on the diversity of media offerings and opinions.
Neither has Defendant plausibly pled how the alleged upside outweights the downside in this case, nor is it evident.
(c) With respect to Defendant's claim that improving public education about health topics increases public welfare, there are no plausible pleadings of such benefit and the weight it should bear. In any event, if one weighs the overall circumstances described above, this benefit does not appear quite so overwhelming as to justify the threat of forcing other reliable vendors out of the market for public health information. To the contrary, there is a threat of a loss of the existing diversity of high-quality health information portals and, therefore, of the availability of medical "second opinions."
2. Contrary to Defendant's auxiliary request, the grant or, respectively, the enforcement of the preliminary injunction does not depend on security in accordance with Articles 935, 936, 921 (second sentence) of the Code of Civil Procedure. Neither has Defendant provided reasons for that request nor has it pled and quantified potential damages nor is there an obvious reason for such order [of a requirement to post collateral].
III.
Plaintiff/Movant has also substantiated the existence of a sense of urgency.
There is urgency if there is an objective danger of an alteration of the status quo thwarting or complicating the enforcement of the moving party's rights by means of the final judgment at the end of the main proceeding and its enforcement. The moving party does not have to content itself with a damages claim (MüKoZPO/Drescher, 6th edition, 2020, Art. 935 Code of Civil Procedure, margin no. 15).
As explained above, Plaintiff/Movant has credibly pled that it loses traffic as a result of its reduced visibility on Google Search due to the info boxes, which has already materialized in the reduction of click rates relating to particular illnesses, and that user traffic is critical to the conclusion of profitable agreements with advertisers. One must fear that this reduction [of traffic] results in a specific loss of revenue until the conclusion of a [full-blown] main proceeding, especially since Plaintiff/Movant has credibly shown that, due to keyword targeting being its key marketing tool, reduced visibility in a narrowly defined range of topics is materially adversely impacted (cf. Exh. K36, page 2). Neither does Plaintiff/Movant have to wait until such revenue loss has occurred, nor is it a requirement for a preliminary injunction that the moving party credibly claims that its viability is in jeopardy, especially since Plaintiff/Movant is not seeking specific performance.
Plaintiff has not acted in contradiction to the urgency resulting from those circumstances by not having done everything in its power in order to obtain the preliminary injunction as swiftly as possible (cf. Dusseldorf Higher Regional Court, judgment of September 7, 2020, VI-U (Kart)4/20 - NZKart 2020, 545, 546). The preliminary injunction request was filed with the Court on November 27, 2020, i.e. within one month of the start of the cooperation between Defendant and the FMH.
The imminent harm [to Defendant] is not outweighted by higher-priority interests on Defendant's part. A lasting reputation loss by Defendant, resulting from the removal of a recently-launched offering, or any negative impact on the public interest in public health cannot be [realistically] expected.
IV.
The cost award is entered in accordance with Articles 92(1)(first sentence), 269(3)(second sentence) Code of Civil Procedure. The rejected second prayer for relief has materially the same thrust as the granted first prayer for relief. The extent to which the second prayer for relief and the withdrawn part of the first prayer for relief exceeded the ultimately-granted injunction cannot be afforded so much weight as to require Plaintiff/Movant to bear more than one quarter of litigation expenses.
The decision on provisional enforceability concerning Defendant's entitlement to a reimbursement of costs is based in Articles 708(6), 711 Code of Civil Procedure.
[judges' signatures]
Announced on February 10, 2021
[clerk's signature]
Share with other professionals via LinkedIn:
