CADE’s Tribunal recommends the opening of an investigation into Google regarding the use of journalistic content

The Tribunal of the Administrative Council for Economic Defense (CADE) unanimously approved, on Thursday (23), the proposal put forward by the current acting president, Diogo Thomson de Andrade, recommending that the case be returned to the General Superintendence for the initiation of administrative proceedings, in order to further the investigations, given the technological evolution of the conduct since the initiation of the Administrative Inquiry in 2019.

The case returned to the Tribunal’s agenda following a request for review by Commissioner Camila Cabral Pires-Alves. In presenting her opinion, she endorsed the arguments put forward by Thomson, adding considerations regarding the need to gather data on the economic structure underlying production and value appropriation in the market relationship under analysis. Commissioners Carlos Jacques and José Levi expressed similar views. The rapporteur for the case, former commissioner and president Gustavo Augusto also amended his vote to reflect the reasoning set out in the concurring opinion.

Background

The case originated from a determination by CADE’s Tribunal, which identified the need to further investigate the competitive conditions in the search market and in the vertically related news market, particularly regarding Google’s use of content produced by publishers. 

Following the investigation, the General Superintendence concluded that there was insufficient evidence of a breach of the economic order and recommended that the case be dismissed, a decision which was upheld following the lodging of an appeal. Given the relevance and complexity of the matter, the case was taken up by the Tribunal and subsequently assigned to former commissioner and president Gustavo Augusto as rapporteur.

The judgment began with the rapporteur’s opinion in favour of dismissal. However, Acting President Diogo Thomson requested a review of the case to conduct a more thorough investigation.

In-depth analysis

In his analysis, Thomson highlighted that the conduct under investigation is not limited to the form it took at the time the inquiry was initiated, in 2019 — characterised by the automated collection of journalistic content available on the web, followed by its partial display on the search engine’s results page, through headlines, excerpts and images, with potential impacts on traffic routing and publishers’ monetisation.

According to the opinion, the conduct has evolved significantly with the incorporation of features based on generative artificial intelligence, capable of synthesising  information directly within the search interface. Thus, it pointed out that this technological transformation significantly alters the dynamics of access, visibility and monetisation of journalistic content in the digital environment.

The opinion further emphasised that, in this context, the relationship between Google and publishers could take on the characteristics of structural dependence, given that a significant share of news outlets’ traffic relies on the search mechanisms of the company under investigation to reach its audience. Such dependence, combined with the platform’s role as an essential intermediary, may facilitate the unilateral imposition of conditions for the use of content.

From this perspective, Diogo Thomson developed the hypothesis that the conduct may constitute a potential exploitative abuse of dominance, characterised by the extraction and internalisation of economic value from content produced by third parties, without proportional compensation, in a context of asymmetry and the lack of effective alternative arrangements.

The opinion also proposed a specific analytical framework for assessing conduct of this nature in digital markets, with an emphasis on elements such as structural dependence, the imposition of commercial conditions, the extraction of value, and the existence of appreciable competitive harm. 

Furthermore, the Commissioner emphasised that Brazilian competition law, particularly under the general clause set out in Article 36 of Law No. 12,529/2011, allows for the classification of exploitative practices, even if they do not fit perfectly within the traditional categories of abuse of dominance.

In her opinion, Commissioner Camila Pires Alves concurred with the conclusion proposed by Acting President Diogo Thomson and emphasised the importance of a robust analytical and empirical examination of the case file, particularly regarding the interpretation and explanatory power of the tests contained therein. In her statement, she highlighted that, in cases of this nature, characterised by the heterogeneity of the functionalities analysed, the rapid technological evolution of interfaces, and the presence of relevant non-monetary variables, aggregated traffic metrics, considered in isolation, provide an important contribution but do not, on their own, fully capture the possible competitive effects under examination. From this perspective, the Commissioner pointed out the desirability of the General Superintendence proceeding with a more disaggregated data collection and assessment of evidence, by functionality, search type, content category and publisher profile, including metrics such as impressions, clicks, CTR, zero-click, query reformulation, scroll, dwell time and referral traffic, whenever possible on a comparative basis.

Finally, Acting President Diogo Thomson incorporated into his opinion Commissioner Camila Pires Alves’ suggestion that the General Superintendence consider the investigative measures indicated in her opinion.

Access case no. 08700.003498/2019-03

Check Diogo Thomson’s opinion: PDF OF DIOGO’S OPINION