NOT SO SUNDAR

Google might be facing a long and painful antitrust battle in India

Quartz india
Quartz india

A preliminary investigation by anti-monopoly watchdog Competition Commission of India (CCI) has contended that Google is abusing its dominant position in the online search space in India. If proved true, this could plunge the internet giant into a long legal battle in India.

Investigation into the matter was triggered in 2012, after the CCI received at least two complaints claiming that Google indulged in potential anti-competitive conduct in India’s internet, e-commerce, online advertising and related markets.

The complaints were filed by a Jaipur-based non-profit organisation Consumer Unity and Trust Society (CUTS) and Consim Info, which runs matchmaking website BharatMatrimony.

“Google runs its core business of online search and search advertising in a discriminatory manner, causing harm to advertisers and indirectly to consumers and creating an uneven playing field by favouring its own services and of its vertical partners, by manipulating the search algorithms,” Consim Info claimed (pdf) in its complaint in 2012.

The complaint also alleged that in order to promote its vertical search services—like YouTube, Google News and Google Maps— the search giant mixes results from these into organic search results. “The effect of such manipulation of results was that Google’s vertical search partners will appear predominantly when an internet user searches for some information, irrespective of whether the search results are most popular or relevant,” the complaint said.

As part of the probe into Google, the CCI’s director general of investigation reached out to 30 companies, including Facebook, Flipkart, Nokia’s maps division, Makemytrip.com, MapmyIndia.com, Hungama Digital and GroupM.

The CCI director general submitted an investigation report late August.

A Google India spokesman told Quartz that the company is currently reviewing the report, which runs into 714 pages, with additional 4,000 pages of annexure.

“We continue to work closely with the CCI and remain confident that we comply fully with India’s competition laws,” the Google spokesman said. “Regulators and courts around the world, including in the US, Germany, Taiwan, Egypt and Brazil, have looked into and found no concerns on many of the issues raised in this report.”

“It’s still early days, this is a DG (director general) report, not a final decision from the CCI,” the spokesman added.

The CCI has asked Google to respond to its charges by Sept. 10, and appear before the commission a week after that.

But a swift decision in the matter is unlikely. “The process is fairly lengthy; it is a quasi-judicial process. We have to hear the parties involved and then decide. It will take quite sometime,” CCI chairman Ashok Chawla said earlier this week.

Google is already facing a billion-euro fine in the European Union for allegedly cheating competitors by distorting internet search results in favour of its shopping service. The company, however, has rejected the claims made by the European Union’s competitive authority.

If it is found guilty in India, Google could be asked to discontinue practices that are deemed unfair or face a fine of as much as 10% of its revenues, explained Udai Mehta, assistant director at CUTS. The company can also challenge the CCI’s order in the Supreme Court, Mehta said.

In terms of the number of users, India is the second largest market for Googlewhich posted a net income of over $14 billion and revenue of $66 billion for 2014—and is now run by India-born CEO Sundar Pichai.

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