Google Secures Win Against AGCOM in Court of Justice of the European Union

Cleary Gottlieb represented Google in its win against the Autorità per le Garanzie nelle Comunicazioni (Italian Communications Regulatory Authority; AGCOM) before the Court of Justice of the European Union.

In Italy, providers of online intermediation services and search engines, such as Google, are subject to certain obligations under national provisions. Providers must be entered in a register held by AGCOM, and are obligated to periodically forward AGCOM a document on their economic situation, provide it with a series of detailed information, and pay it a financial contribution. Penalties are provided for in the event of failure to comply with those obligations.

Google challenged these obligations before the Italian courts, arguing that the resulting increase in administrative charges was contrary to EU law. Google relied on the principle of freedom to provide services, arguing that it is subject to the legal system of the Member State in which it is established. Italian law, therefore, cannot impose other requirements for access to the activity of information society services. In this context, the Italian courts decided to refer the matter to the Court of Justice.

In a judgment delivered on May 30, 2024, the EU judges emphatically upheld the principle and implicitly warned EU governments that there is a high bar for getting an exemption from the e-Commerce Directive to regulate platforms.

It is the home Member State of the company providing information society services that regulates the provision of those services. Member States of destination, bound by the principle of mutual recognition, are required, save in exceptional circumstances, not to restrict the freedom to provide those services. Thus, Italy cannot impose on providers of those services established in other Member States additional obligations, which although required for the provision of those services in that country, are not imposed in their Member State of establishment.

According to the Court of Justice, those obligations do not fall within the exceptions permitted by the Directive on electronic commerce. First, they are, subject to verification by the Italian court, of general and abstract application. Second, they are not necessary in order to protect one of the objectives of general interest referred to in that directive. In addition, the establishment of those obligations is not justified by the intention, invoked by the Italian authorities, to ensure the adequate and effective enforcement of the above-mentioned regulation.