Google faces up to $5-bn fine in India; says cooperating in probe

Written by PTI | New Delhi | Updated: Mar 10 2014, 05:12am hrs
Google AdwordsOther allegations include denial of access to content and imposing of unfair and discriminatory conditions on 'AdWords' customers. (AP)
Google, which is facing antitrust investigation in India by fair trade watchdog CCI, can face a penalty of up to about USD five billion if it is found to have violated competition norms of the country.

Google said it is "extending full cooperation" to the CCI in its investigation. The conclusion of a two-year review by the US antitrust watchdog has concluded that the company's services were good for competition, it added.

The case has been before the Competition Commission of India (CCI) as well for over two years now and it relates to allegations that Google is abusing its dominant position in the Internet search engine space.

Under competition regulations, an entity found violating the norms could be slapped with penalty of up to 10 per cent of its three-year annual average turnover.

In the case of Google, its annual revenues in the last three years amounts to a staggering USD 49.3 billion and the maximum penalty can be up to nearly USD 5 billion.

When asked about the ongoing probe and the potential penalty of up to USD five billion, a Google spokesperson told PTI: "We are extending full co-operation to the Competition Commission of India in their investigation."

"We're pleased that the conclusion of the Federal Trade Commission's two year review was that Google's services are good for users and good for competition," he said in an e-mailed statement.

While Google has settled anti-trust cases in the US and European Union, Indian competition regime does not have provisions for settlement process. Besides a complaint filed with CCI cannot be withdrawn.

Finding prima facie evidence of violations, CCI had referred the matter to its investigation arm Director General (DG) -- for a detailed probe.

Sources said that the DG has also collected comments from third-parties with regard to this case and it is likely to soon submit its report to CCI.

The Director General could not be contacted for comments.

Apart from penalty, CCI is empowered to pass orders to correct a company's conduct in the market place. Also, the regulator can go for structural remedies that could see breaking up of dominant enterprises into separate businesses.

The complaint against Google, also one of the world's most valued company, was first filed by advocacy group CUTS International way back in late 2011. Later. Matrimonial website matrimony.com Private Ltd also filed a complaint.

Referring to Google's settlement with the European Commission, matrimony.com counsel Ferida Satarawala said: "Google's unfair use of trademarks as well as its retaliatory conduct are not specifically addressed in the European settlement and are distinct theories of harm being pursued by the CCI. Therefore, this settlement is unlikely to address CCI's concerns in our case".

CUTS International's Associate Director Udai S Mehta said the group is planning to write to CCI, seeking to expedite the Google case.

Emphasising that there should be plea bargaining provision in Indian competition norms, Mehta said that slapping penalty might not really be a detriment for a company and stop anti-competitive practices.

The main allegations against Google are that it favours its own products in search results and resorts to discrimination by favouring paid searches.

Other allegations include denial of access to content and imposing of unfair and discriminatory conditions on 'AdWords' customers.

Last year, CCI Chairman Ashok Chawla had said the complaint was that Google search engine favours the platforms which it wants to support.

"That is when you click on Google under a certain category, you will get the platforms where there is a tendency to put them in a certain order which may not be the fair and non-discriminatory manner.

"So, what is the software and what is the algorithmic search, (that is) what the investigation team is looking at," Chawla had said.

In its 2013 annual report filed with US regulator SEC in February, Google mentioned about anti-trust cases in India and some other jurisdictions.

"The Comision Nacional de Defensa de la Competencia in Argentina, the Competition Commission of India, the Taiwan Fair Trade Commission, Brazil's Council for Economic Defense and the Canadian Competition Bureau have also opened investigations into certain of our business practices," the filing had said.