Final Report of the Hearing Officer (1)

Google Android

(AT.40099)

(2019/C 402/07)

Introduction

(1) The draft decision concerns conduct of the undertaking that includes Google LLC (formerly Google Inc. ( 2 ) ) and Alphabet Inc. (together or interchangeably as required by the context, ‘Google’) with regard to certain conditions in agreements associated with the use of Google’s smart mobile operating system, Android, and certain proprietary mobile ‘apps’ and services.

Written procedure

The statement of objections

(3) On 20 April 2016, the Commission addressed a statement of objections (the ‘SO’) to Google Inc. and Alphabet Inc. ( 6 ) , setting out the provisional conclusion that certain conditions in agreements concluded by Google constituted separate infringements of Article 102 TFEU and Article 54 of the EEA Agreement and also constituted a single and continuous infringement of those articles. According to the SO, the conditions in question: (i) tied the Google Search app with Google’s ‘Play Store’; (ii) made the licensing of the Play Store conditional on Google Search being set as the default general search service; (iii) tied the web browser Google Chrome with the Play Store and the Google Search app; (iv) made the licensing of the Play Store and the Google Search app subject to ‘anti-fragmentation obligations’; (v) granted revenue share payments to original equipment manufacturers (‘OEMs’) and mobile network operators (‘MNOs’) on condition that they pre-install no competing general search service on any device within an agreed portfolio; and (vi) granted revenue share payments to OEMs and MNOs on condition that they pre-install no competing general search service on a given device.

Access-to-file following the SO

(4) On 3 May 2016, DG Competition granted Google access to an encrypted electronic storage device containing non-confidential versions of documents on the investigation file, including those mentioned in the SO. It supplied further material, including less-redacted versions of certain documents provided on 3 May 2016, in the same way on several occasions between 12 May and 20 July 2016. For the remainder of the investigation file, DG Competition arranged access by means of: (i) a series of confidentiality ring arrangements ( 7 ) agreed, in June to August 2016 inclusive, between Google and several third parties from whom the Commission had obtained information; and (ii) a data room procedure ( 8 ) that took place in late August and early September 2016.

(5) On 25 July 2016, Google addressed to the Hearing Officer an extensive request for further access-to-file. In the light of Article 3(7) of Decision 2011/695/EU and of the particular circumstances of the access-to-file process in this case, the Hearing Officer considered that the issues raised in this request were not at that stage ripe for independent review in accordance with Article 7(1) of Decision 2011/695/EU. Accordingly, Google’s request of 25 July 2016 was referred back to and addressed by DG Competition.

(6) Google subsequently addressed several requests to the Hearing Officer under Article 7(1) of Decision 2011/695/EU for further access-to-file ( 9 ) . Some of these related to accessible versions of documents as these versions stood after DG Competition’s handling of Google’s request dated 25 July 2016 ( 10 )

(7) By two decisions dated 11 October 2016 and a third dated 13 December 2016, the Hearing Officer described how these requests had been or would be dealt with by the Commission. To the extent that further access was considered necessary for the proper exercise of Google’s right to be heard, the Hearing Officer arranged for DG Competition to provide Google with such further access. In certain cases, and where appropriate, this access was by means of confidentiality ring arrangements involving Google’s external advisers. There were also four data room procedures between October and December 2016 inclusive. In other cases, where the Hearing Officer did not consider that any further access was necessary for the proper exercise of Google’s right to be heard, Google’s requests for further access were rejected.

The period for responding in writing to the SO

(8) DG Competition initially granted Google 12 weeks in which to submit a written response to the SO and considered that this period had started to run on 4 May 2016, the day after Google received non-confidential versions of the documents on which the SO was based. In response to requests by Google, the period for responding in writing to the SO was extended several times, by DG Competition and by the Hearing Officer. Ultimately, the Hearing Officer set a deadline of 11 November 2016 for Google’s preliminary written response to the SO, but allowed Google to submit a supplementary consolidated response on the basis of any further access-to-file that might be received on the basis of certain requests that were still outstanding at that time. Once progress with those requests was sufficiently advanced, the Hearing Officer set a deadline of 23 December 2016 for the submission of Google’s consolidated written response to the SO.

(9) Google submitted its initial written response to the SO on 10 November 2016. This was supplemented and replaced by Google’s consolidated written response, submitted on the applicable deadline date of 23 December 2016. In that response, Google complained of ‘insufficient time’ in which to review all the further information disclosed to it after the submission of the initial response of 10 November 2016. However, before submitting its consolidated written response, Google did not raise such a complaint with the Hearing Officer or seek any further modification of the applicable deadline ( 11 )

The first letter of facts

(10) On 31 August 2017, the Commission addressed a letter of facts to Google (the ‘1stLoF’).

(11) DG Competition provided additional access-to-file (concerning accessible documents added to the case file on or after 3 May 2016) by means of an encrypted electronic storage device received by Google on 1 September 2017, a data room procedure that commenced on 4 September 2017, and supplementary confidentiality ring arrangements. On 8 September 2017, Google sought additional disclosures or clarifications from DG Competition in relation to certain documents. DG Competition dealt with these requests, providing its consolidated response on 19 September 2017.

(12) By letter to the Hearing Officer dated 21 September 2017, Google sought further access to 15 specified documents. The Hearing Officer arranged for DG Competition to organise a data room procedure for the majority of these in early October 2017. As subsequently explained in the Hearing Officer’s decision dated 16 October 2017, the documents concerned contained confidential information that would have been difficult or even impossible to summarise in a non-confidential manner yet in the detail that would usefully serve the exercise of the right to be heard. The Hearing Officer procured and released to Google revised accessible versions of two documents and rejected Google’s request as to the remainder.

(13) The 1stLoF set 2 October 2017 as the deadline for Google’s submissions in relation to it. After DG Competition accepted Google’s extension request, Google submitted its response on the revised deadline date of 23 October 2017.

The second letter of facts

(14) On 11 April 2018, the Commission addressed another letter of facts to Google (the ‘2ndLoF’). On 12 April 2018, the Commission provided Google with non-confidential versions of all except one of the accessible documents added to the case file on or after 1 September 2017. That one document was disclosed by means of a confidentiality ring arrangement.

(15) The deadline for Google’s written response was 23 April 2018. Google sought from DG Competition an extension to bring this deadline to 24 May 2018. DG Competition granted instead a one-week extension, to 30 April 2018.

(16) By letter to the Hearing Officer of 24 April 2018, Google took issue with that extension and reiterated before the Hearing Officer its request for a revised deadline of 24 May 2018. By decision of 26 April 2018, the Hearing Officer granted an additional week in which to respond to the 2ndLoF, bringing the applicable deadline to 7 May 2018. Google responded to the 2ndLoF on that date.

No oral hearing

Google declined an oral hearing following the SO

(17) In its consolidated written response to the SO, Google declined to opt for an oral hearing. Google suggested that its decision was swayed by what it portrayed as tight time constraints imposed by the Commission. However, Google did not avail of the right, which would have been available had Google requested an oral hearing when responding in writing to the SO, to request a postponement in accordance with Article 12(1) of Decision 2011/695/EU. Neither did Google seek to submit separate comments concerning the last two less-redacted texts that, shortly before the deadline for its consolidated written response to the SO, had been made available to Google as a result of requests to the Hearing Officer for further access-to-file ( 12 )

Rejection of Google’s later request for an oral hearing

(18) By letter to the Hearing Officer dated 7 May 2018 (the same date as Google’s response to the 2ndLoF), Google asked that an oral hearing be convened. Arguing primarily that the 1stLoF and the 2ndLoF (the ‘LoFs’) should have been communicated as a supplementary statement of objections, Google claimed that in any event the Hearing Officer has a discretionary power to grant an oral hearing upon a reasoned request by a party concerned at any stage of proceedings. Google submitted that, in view of its right to be heard and of what it described as ‘substantial developments’ in proceedings since its written response to the SO ( 13 ) , such a discretion should be exercised in Google’s favour.

(19) By letter dated 18 May 2018, the Hearing Officer declined Google’s request. The LoFs did not alter or extend any objection contained in the SO, or add any new objection. No supplementary statement of objections was thus needed. Where, as was the case in relation to the LoFs, a party has been in a position to make known its views in writing, there was no fundamental right to be heard orally in addition ( 14 ) . The Hearing Officer did not have competence under Decision 2011/695/EU to grant a request for an oral hearing that has not been made in accordance with Articles 10 and 12 of Regulation (EC) No 773/2004. Contrary to what Google suggested, neither did the Hearing Officer have a discretionary power to convene an oral hearing at any stage of proceedings or following receipt of a letter of facts. In any event, even if such a power did exist, the ‘developments’ described by Google would not warrant the organisation of an oral hearing.

Complainants and third persons

(20) In March 2013 and June 2014 respectively, Fairsearch and Aptoide S.A. submitted complaints that led to the initiation of proceedings in Case AT.40099. Other complaints were submitted by Yandex S.A. in April 2015, by Disconnect Inc. in June 2015 and Open internet Project in March 2017. Google received and submitted observations on a non-confidential version of each of these complaints. In accordance with Article 6(1) of Regulation (EC) No 773/2004, each complainant received and could comment in writing on a non-confidential version of the SO.

(21) On their reasoned applications on various dates, 14 entities were, in accordance with Article 5 of Decision 2011/695/EU, admitted to proceedings as interested third persons ( 15 )

Procedural issues raised by Google

Access-to-file

(22) In its consolidated written response to the SO, Google claimed to be ‘entitled to full and unfettered access to all documents in the case file’, especially in view of the ‘SO’s extensive reliance on third party evidence’. Google complained in particular that it had not seen the full confidential versions of 142 documents to which the Commission provided access by means of either confidentiality ring arrangements or data room procedures.

(23) However, a right of ‘full and unfettered access’, such as that claimed by Google, does not emerge from the relevant provisions and case law. Access-to-file is not an end in itself, but simply a corollary of the rights of the defence ( 16 ) . Where competing interests of confidentiality and the rights of defence need to be weighed up and if necessary reconciled, (further) access-to-file may justifiably involve restricted forms of access.

(24) The relevant decisions of the Hearing Officer explain that access by Google itself to confidential versions of the documents concerned was not necessary for the proper exercise of Google’s right to be heard and that the appropriate balance was struck by means of various forms of restricted access. The variants of restricted access used were the least restrictive that were feasible in the circumstances. Google claimed that it had been ‘unable to comment meaningfully’ on matters on which its relevant external advisers were less well placed to comment. However, it did not point to specific instances where this was said to undermine the effective exercise of the right to be heard. As for Google’s remark that documents had been provided in a fragmentary manner, it is inherent in the provisions and texts relating to access-to-file ( 17 ) that, if requests for further access-to-file are well-founded, additional materials may be made available in instalments after the provision of the initial body of access-to-file, particularly if this is done in response to a series of separate requests.

(25) When requesting, on 24 April 2018, an extension of the period for responding to the 2ndLoF (see (16) above), Google also indicated that the case file disclosed to it did not include certain (unnamed) ‘third-party submissions, or reports of calls, that Google [understood had] been made to the Commission concerning the proceeding’. Google asked for confirmation that ‘all of the third-party submissions, reports of calls, and any material of a similar nature’ in this regard had been provided to Google, but offered no further details about the additional third-party calls and submissions that it appeared to have in mind. The Hearing Officer responded in essence that, in the absence of more specific information from Google, its request relating to third-party submissions called for no further action.

(26) By letter to the Hearing Officer dated 12 June 2018, Google sought the disclosure of letters or other communications received by the Commission from four named third parties that Google believed might have expressed their views on Case AT.40099. The Hearing Officer transferred this request to DG Competition which dealt with the matter. As a result, Google was provided with two letters from two different third parties ( 18 )

Notes of meetings and telephone calls

(27) As part of access-to-file following the SO, in line with point 44 of the Antitrust Best Practices Notice, DG Competition provided Google with brief notes of meetings and telephone calls involving DG Competition and third parties.

(28) On 2 September 2016, Google requested the Commission to provide ‘full notes’ for all of the meetings at which representatives of the Commission spoke with third parties about the matters under investigation in the present case. On 22 September 2016, DG Competition rejected that request on the basis of applicable case law.

(29) In a letter to the Hearing Officer of 7 October 2016, Google requested, among other things, (i) disclosure of the names that were redacted in the notes that DG Competition had provided and (ii) that the Hearing Officer direct DG Competition to provide the fuller notes sought by Google ( 19 ) . The Hearing Officer’s decision dated 13 December 2016 rejected the former request. Concerning the latter request, that decision explained that the Hearing Officer did not have decisional competence under Decision 2011/695/EU to make such a direction.

(30) Intel v Commission In its consolidated written response to the SO, Google submitted that the texts that DG Competition had provided fell short of the requirements of Article 19 of Regulation (EC) No 1/2003 as interpreted in the Advocate General’s Opinion in ( 20 ) . On 15 September 2017, following the judgment of 6 September 2017 in the same case ( 21 ) , Google asked DG Competition for, among other things: full records of meetings between Commission representatives and third parties relating to the investigation in the present case; copies of any internal documents used to reconstitute records if no contemporaneous records were originally made; and contact details for each of the third parties concerned.

(31) By letter dated 28 February 2018, DG Competition responded, providing a series of minutes and notes of meetings and telephone calls and describing how these materials were drawn up.

(32) On 14 March 2018, Google complained to the Hearing Officer about that response, seeking what Google described as ‘full meeting notes, as required by the Intel judgment’. In particular, Google claimed that DG Competition had: failed to provide adequate meeting notes or explanations of how the materials provided had been ‘constituted’; excluded arbitrarily meetings involving the Commissioner for Competition and/or a member or members of her ‘ cabinet ’ from the set for which materials were provided; and improperly redacted the names of certain third parties in the materials provided.

(33) In a letter to Google dated 30 April 2018, the Hearing Officer explained that his decisional powers did not extend to overturning DG Competition’s position on the possibility that the Commission might be required, in the circumstances of the present case, to provide fuller records of meetings and telephone calls with third parties than those already provided. To the extent that Google’s requests sought further access to the Commission’s investigation file in accordance with Article 7 of Decision 2011/695/EU, the Hearing Officer confirmed that there were no documents in the Commission’s possession other than those that DG Competition had already provided, where necessary with redactions to protect identities for which confidential treatment had been sought. In relation to Google’s requests for divulgation of those redacted identities, the Hearing Officer arranged for certain less-redacted documents to be made available to Google.

(34) By letter dated 1 June 2018, Google invited the Hearing Officer to reconsider some of the conclusions set out in the Hearing Officer’s letter of 30 April 2018. In a letter dated 20 June 2018, the Hearing Officer declined to do so.

(35) Intel v Commission The issue of whether, in circumstances such as those of the present case, the material provided by the Commission pertaining to third-party meetings and calls satisfied, to the extent applicable, the requirements of Article 19 of Regulation (EC) No 1/2003 read in conjunction with Article 3 of Regulation (EC) No 773/2004, is not as straightforward as Google has sought to portray it. The material initially provided by DG Competition was in principle compliant with the requirements of the case law ( 22 ) . Moreover, following the Court of Justice judgment in ( 23 ) , DG Competition provided fuller materials that were based to the extent possible on contemporaneous documents, such as those provided or discussed in the meetings concerned.

(36) Intel v Commission In any event, even if it were to be accepted that, as Google has in substance claimed, Article 19 of Regulation (EC) No 1/2003 was engaged in the present case and its requirements have not been fully met, it is another matter whether such an irregularity renders unlawful any infringement decision addressed to Google in these proceedings. It appears, on the basis of the Court of Justice judgment in ( 24 ) , that the provision of records in compliance with Article 19 of Regulation (EC) No 1/2003 read in conjunction with Article 3 of Regulation (EC) No 773/2004 is not an end in itself, but — like access-to-file — a corollary of the rights of the defence. Google’s letters to the Hearing Officer of 14 March and 1 June 2018 (see (32) and (34) above) did not put forward any specific argument in support of the allegation that the minutes and notes ultimately provided by the Commission fell short of satisfying Google’s rights of defence ( 25 ) . In particular, those letters did not reveal that the alleged failure to comply fully with the requirements of Article 19 of Regulation (EC) No 1/2003 actually impaired the effective exercise of Google’s rights of defence. Yet the requirements of the rights of the defence fall to be examined in relation to the specific circumstances of each particular case ( 26 ) . On the basis of the information available and submissions made to the Hearing Officer regarding the provision of records of meetings, it does not appear that there has been a breach of Google’s rights of defence tainting the legality of the draft decision.

Concluding remarks

(37) The draft decision reflects the fact that, in the light of Google’s submissions, objections included in the SO have been dropped concerning suspected abuses related to (i) the licensing of the Play Store on condition that Google Search be set as the default general search service, and (ii) ‘device-based’ revenue-sharing arrangements.

(38) In accordance with Article 16 of Decision 2011/695/EU, it has been examined whether the draft decision deals only with objections in respect of which Google has been afforded the opportunity of making known its views. It does.

(39) Overall, the effective exercise of procedural rights has been respected in this case.

Brussels, 17 July 2018. Joos STRAGIER

(1) Pursuant to Articles 16 and 17 of Decision 2011/695/EU of the President of the European Commission of 13 October 2011 on the function and terms of reference of the hearing officer in certain competition proceedings (OJ L 275, 20.10.2011, p. 29) (‘Decision 2011/695/EU’).

(2) In September 2017, Google Inc. changed its legal form and became Google LLC.

(3) See (20) below concerning these and later complaints.

(4) Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty (OJ L 1 4.1.2003, p. 1).

(5) Commission Regulation (EC) No 773/2004 of 7 April 2004 relating to the conduct of proceedings by the Commission pursuant to Articles 81 and 82 of the EC Treaty (OJ L 123, 27.4.2004, p. 18).

(6) Also on 20 April 2016, following the reorganisation of Google Inc. and the creation of Alphabet Inc. as a holding company sitting above Google Inc., the Commission initiated proceedings in respect of Alphabet Inc.

(7) In the context of access-to-file, a ‘confidentiality ring’ is a form of restricted disclosure by which a party entitled to access-to-file agrees, with an information provider seeking confidential treatment of certain information obtained from it by the Commission, that that information be received on that party’s behalf by a restricted circle of persons (decided by negotiation on a case-by-case basis). See further point 96 of the Commission notice on best practices for the conduct of proceedings concerning Articles 101 and 102 TFEU (OJ C 308, 20.10.2011, p. 6) (the ‘Antitrust Best Practices Notice’). In this case, some of the confidentiality rings involved included two of Google’s in-house counsel.

(8) In the context of access-to-file, a data room procedure is a form of restricted disclosure by which material is disclosed to a limited number of specified advisers for a limited period of time in a secure room on the Commission’s premises, subject to a number of restrictions and safeguards designed to prevent confidential information being disclosed beyond this ‘data room’.

(9) In particular on 6 and 13 September, 7, 17, 21 and 27 October and 8 December 2016.

(10) In a letter to the Hearing Officer dated 7 October 2016, Google indicated that it had ‘received satisfactory responses’ from DG Competition relating to ‘the great majority of’ Google’s requests concerning documents initially disclosed by way of confidentiality rings.

(11) The Hearing Officer’s decision of 13 December 2016 confirming the deadline for Google’s consolidated written response to the SO specified that if there were to be an unexpected delay in the provision of any of the remaining further access-to-file to which Google was entitled on the basis of that decision, an opportunity to submit written comments separately from the consolidated written response to the SO could if necessary be granted.

(12) See footnote 11 above concerning the possibility of making such comments.

(13) According to Google, these developments were: the LoFs (which in Google’s view introduced critical new elements to the Commission’s case); the Court of Justice judgment in Intel v Commission (C-413/14 P, EU:C:2017:632) and the Opinions of Advocates General Wahl and Wathelet in MEO (C-525/16, EU:C:2017:1020) and Orange Polska v Commission (C-123/16 P, EU:C:2018:87) respectively; and ‘public interest in the case’.

(14) See, to that effect, among others, judgments in People’s Mojahedin Organization of Iran v Council (T-256/07, EU:T:2008:461, paragraph 93); Alsharghawi v Council (T-485/15, EU:T:2016:520, paragraph 65); Bilde v Parliament (T-633/16, EU:T:2017:849, paragraphs 96 to 102); and Gollnisch v Parliament (T-624/16, EU:T:2018:121, paragraphs 89 to 95); as well as Opinion in SKW Stahl-Metallurgie and SKW Stahl-Metallurgie Holding v European Commission (EU:C:2015:543, paragraphs 49 and 58 and case law cited).

(15) Two of these entities applied and were admitted jointly. Another applicant did not make out a ‘sufficient interest’ for the purposes of Article 27(3) of Regulation (EC) No 1/2003, Article 13(1) of Regulation (EC) No 773/2004 and Article 5 of Decision 2011/695/EU. In the absence of a response to the Hearing Officer’s provisional negative assessment under Article 5(3) of Decision 2011/695/EU, this application to be heard as an interested third person was deemed rejected. A different applicant did not respond to an invitation to clarify its application and the interest it relied on. The application could not be processed further and the Hearing Officer deemed it to have been withdrawn.

(16) See to this effect, among others, judgments in Aalborg Portland and Others v Commission (C-204/00 P, EU:C:2004:6, paragraph 68); Atlantic Container Line and Others v Commission (T-191/98 and T-212/98 to T-214/98, EU:T:2003:245, paragraphs 376 and 377); as well as Solvay v Commission (T-186/06, EU:T:2011:276, paragraph 214).

(17) In particular, Article 7(1) of Decision 2011/695/EU and point 47 of the Commission Notice on the rules for access to the Commission file in cases pursuant to Articles 81 and 82 of the EC Treaty, Articles 53, 54 and 57 of the EEA Agreement and Council Regulation (EC) No 139/2004 (OJ C 325, 22.12.2005, p. 7 with amendments of 2015 set out in OJ C 256, 5.8.2015, p. 3).

(18) One letter post-dates by several weeks Google’s request of 26 April 2018. The other letter, which dates from late 2017, was not directly related to the subject matter of Case AT.40099 but does include remarks on, among other things, mobile operating systems including Android. DG Competition’s internal checks and inquiries with the other two third parties named in Google’s request of 12 June 2018 did not reveal the existence of any further communications of the type sought by Google. On 27 June 2018, Google made written submissions concerning these two letters.

(19) In a subsequent letter to the Hearing Officer dated 21 October 2016, Google added a reference to the Advocate General’s Opinion of 20 October 2016 in Intel v Commission (C-413/14 P, EU:C:2016:788), claiming that it confirmed the legal obligation on the Commission to provide meeting notes of the kind that Google had requested.

(20) Opinion of 20 October 2016, C-413/14 P, EU:C:2016:788.

(21) Intel v Commission, C-413/14 P, EU:C:2017:632.

(22) See judgments in Atlantic Container Line and Others v Commission (T-191/98, and T-212/98 to T-214/98, EU:T:2005:245, paragraphs 349 to 359, 372, 382, 383, 385 and 394); Groupe Danone v Commission (T-38/02, EU:T:2005:367, paragraph 66) and Intel v Commission (T-286/09, EU:T:2014:547, paragraphs 619 and 620). DG Competition provided these materials in line with point 44 of the Antitrust Best Practices Notice. That notice, as noted in its point 7, does not create any new rights or obligations or alter any rights or obligations arising from relevant legal provisions and case law.

(23) C-413/14 P, EU:C:2017:632.

(24) C-413/14 P, EU:C:2017:632, paragraphs 93 to 98 and 102.

(25) The material ultimately provided by the Commission appears to have been designed to meet the concerns expressed in Google’s consolidated written response to the SO that Google be able ‘to understand the content of the information provided by a third party to the Commission, whether the Commission took due account of this information, and to verify whether the information provided orally corroborates or conflicts with that third party’s written submissions, if any’.

(26) See, among others, judgments in Solvay v Commission (C-110/10 P, EU:C:2011:687, paragraph 63) and Fresh Del Monte Produce v Commission (T-587/08, EU:T:2013:129, paragraph 682).