Pavel vs. Goliath: Czech search engine Seznam demands billions from Google

The Czech internet leader has sent a pre-litigation notice to the world's largest search engine.

James Fassinger

Written by James Fassinger
Published on 10.12.2020 14:37 (updated on 10.12.2020)

Today, the Czech internet leader, Seznam.cz, sent a pre-litigation notice to the world's largest search engine Google, demanding payment of more than CZK 9 billion in compensation for damages it claims are a result of Google's near-monopoly of general internet search services.

The company says that because of Google's dominant position on the market for licensed operating systems used in most smart mobile devices and applications using the Android operating system, they have an unfair advantage.

"Following a 2018 European Commission decision confirming that Google has violated European Union competition law, we are now seeking damages in our efforts to extend our applications and services to Android mobile devices,” explained Pavel Zima, Deputy Chairman of the Board of Directors of Seznam, adding that the amount of CZK 9.072 billion that the company is now claiming, was estimated by foreign economic experts for the period between 2011-2018.

In response, Google Director of Communications Alžběta Houzarová said in a statement, “Android gives people an unprecedented choice of which applications to install on their devices, which to use and which to set as default. This operating system also enables millions of application developers around the world to build successful businesses.”

(logos: Seznam.cz / Google)
(logos: Seznam.cz / Google)

According to Seznam, over the past few years, their company has been striving to break down the barriers that have come up as a result of Google's abuse of its dominant position on the market, by establishing business cooperation with global device manufacturers.

However, as it extends its applications and services to Android mobile devices, it still encounters market roadblocks that the European Commission has found to be in breach of EU law.

"In particular, it is illegal to make access to the Google Play application store conditional on the use of Google search products on mobile devices, Google's incentives for device manufacturers to pre-install their own applications, which forces out competitors and hinders the development and distribution of competing Android operating systems.

Michal Feix, CEO of Chronos Consulting, which defends Seznam's interests is in charge of preparing and coordinating the dispute, he claims that Google has created a sophisticated system of barriers that has prevented them from entering the market for years, in violation of EU law. As a result, the complaint points out the most serious aspects of the violation of competition rules.

Michal Feix, CEO of Chronos Consulting which represents Seznam. (photo: Seznam.cz)
Michal Feix, CEO of Chronos Consulting which represents Seznam is heading up the charge against Google. (photo: Seznam.cz)

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Seznam is the Czech leader in general search and internet advertising services, advertising monetization and aggregation and presentation of media content. In 2019, it recorded revenues of CZK 4.69 billion, and since 2011 its audited revenues have reached the value of almost CZK 32 billion. The current market share of general search services is estimated at 25%.

It is the largest service of its kind in the Czech Republic and one of the exceptional places where Google is weaker in the market than its competitors. Elsewhere in the world, the American global company dominates.

Google is the most used search engine in the world. Parent company Alphabet earned $38.3 billion in the second quarter this year alone. This was the first time that Google's quarterly revenue had fallen slightly due to the coronavirus crisis. Ads on Google and YouTube account for about 66 percent of Alphabet's revenue.

Google has confirmed it has received a pre-litigation notice from Seznam, with a 30-day payment deadline. After the expiration, the Czech search engine is ready to take the giant to court.