Google abused dominance in India, finds CCI probe

By: |
September 3, 2015 7:38 AM

Google Inc allegedly “abused its dominance” in the Indian market by incorporating clauses in its agreements with users that restricted them from availing services of third-party search engines.

Google abuseWhen contacted, a Google spokesperson said, “We are currently reviewing this report from the CCI’s ongoing investigation. (AP)

An investigation by the Competition Commission of India (CCI) has claimed that the US-based Internet giant Google Inc allegedly “abused its dominance” in the Indian market by incorporating clauses in its agreements with users that restricted them from availing services of third-party search engines.

Sources told The Indian Express that the probe by the DG (Director General, Investigations), ordered by the CCI in 2012, also found that some agreements the company had with other parties incorporated a “one-sided clause relating to termination, possible for only those players who are dominant”. The competition watchdog has sent its findings to Google and asked for its response by September 10.

When contacted, a Google spokesperson said, “We are currently reviewing this report from the CCI’s ongoing investigation. We continue to work closely with the CCI and remain confident that we comply fully with India’s competition laws. 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 (CCI) report.”

The search giant has asked CCI to maintain “confidentiality of the probe and ensure that the findings are not leaked to third party including media”. It has argued that breach of confidentiality threatens its business interests and may weaken its case before the commission. Claiming that some complainants may be interested in harming its interest, it has requested the commission to seek affidavits from informants on confidentiality.

If found guilty, CCI an impose a penalty of up to 10 per cent of the company’s three-year annual average turnover, as per the Competition Act. Last year, CCI imposed a fine of Rs 1 crore on Google for non-cooperation in the investigation.

In its probe, CCI also red-flagged Google’s “web search agreement” and “AdSense agreement,” with users. An AdSense agreement serves advertisements and other content, Google search boxes and results, related search queries and other links to the user’s websites and mobile applications approved by the company; a web search agreement is related to the Google Site Search and is made and entered into by and between Google Inc. and the customer.

CCI ordered an investigation after CUTS, a consumer rights website, in 2011, and BharatMatrimony.com, a matchmaking portal, in 2012, filed complaints with the commission against the alleged abuse of dominance by Google. The matchmaking portal alleged that the company had discriminatory and retaliatory trade practices related to its AdWords program, which is Google’s key revenue source where it sells keywords to advertisers and displays them in the form of ads online. During the probe, DG CCI sought comments from several third parties including Flipkart, MakeMyTrip.com, and Facebook.

Google faces similar allegations in the EU. In April 2015, the EU’s Competition Commission charged Google with violating its dominant position in the market and said it gave “systematic favourable treatment” to its own Google Shopping in its results. The EU is also examining Google’s online ad business and has launched a separate probe against Android. In the US, Google faced anti-competitive charges from 2011. However in 2013, it emerged unscathed after a lengthy investigation by the US Federal Trade Commission.

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