Founders of Foundem, Shivaun and Adam Raff, reveal their journey taking on Google in a 15-year legal case that highlighted issues of monopolistic control in search rankings.
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| A David vs. Goliath tale: How a small startup took on Google and won a historic €2.4 billion victory. Symbolic image |
London, UK - October 28, 2024:
The case of Shivaun and Adam Raff against Google is a watershed moment in the battle over Big Tech’s market influence, highlighting the risks that startups face when they clash with tech giants. The Raffs’ company, Foundem, launched in 2006 as an innovative price comparison website, yet almost immediately faced insurmountable obstacles. Google’s search algorithms placed Foundem lower in search results, essentially removing its visibility on the internet. Although Google justified this with an automated spam filter, Foundem’s visibility on other search engines suggested otherwise, sparking suspicion of anticompetitive behavior.
Foundem’s downfall underscores the monopolistic power held by dominant tech firms. According to the Raffs, the internet relies on Google’s traffic for visibility, making companies vulnerable to Google’s control over search rankings. Although the Raffs initially assumed their website’s low rankings were a technical mistake, their frustration grew as Google continued to ignore their appeals. By the time the European Commission (EC) launched an investigation in 2010, Foundem’s experiences had attracted attention to a potentially systemic issue: Google’s preference for its own shopping services over competitors.
The EC’s 2017 verdict against Google, which resulted in a €2.4 billion fine, confirmed that Google had engaged in anticompetitive practices, specifically by demoting competitor services while promoting its own. This was hailed as a landmark ruling for tech regulation and signaled to other companies that the dominance of tech giants could be challenged. However, Google's appeal process extended the case until September 2023, with the European Court of Justice ultimately upholding the initial ruling. The Raffs were instrumental in this outcome, helping regulators scrutinize Google’s practices.
Their case spotlights an ongoing regulatory challenge: how to enforce fair competition in a digital economy dominated by a few key players. Although Google implemented changes in 2017 to comply with the EC’s decision, questions remain about whether these measures fully address the root issue. Under the new Digital Markets Act, the EC launched another investigation this year into Alphabet’s practices, reflecting an ongoing need to curb potential abuses.
For the Raffs, the saga is bittersweet. Despite the moral victory, Foundem’s forced closure in 2016 meant they ultimately paid a high personal and financial price. The case has also shown the challenges individual entrepreneurs face in challenging corporate giants. Their story underscores the importance of antitrust regulation but also reveals the emotional and financial toll such battles exact. Although they may never recoup their losses, the Raffs’ fight has left a lasting impact on global tech regulation, providing a rallying point for others who challenge monopolistic practices.