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India’s Competition Commission Orders Formal Probe Against Google

The Competition Commission of India (CCI) has ordered for a formal probe against Google in India for its Adwords service, reports Hindustan Times. The report quotes Ashok Chawla, Chairperson of the CCI as saying that the investigation has been formally initiated and the report is expected to be ready in three or four months; the CCI found in a “prima facie evidence” that Google has abused its dominant market position by being discriminatory in allotting keywords to matrimonial site Bharatmatrimony.com. This follows a move from Bharatmatrimony a few months ago, wherein it formally filed a complaint against Google, citing discriminatory trade practices; a report on that here in The Economic Times.

In August 2011, Consumer Unity & Trust Society (CUTS) had filed a Preliminary Information Report (PIR) with the Competition Commission of India to examine the anticompetitive practices indulged in by Google. CUTS’ PIR states that Google’s dominant position in online advertisement has impacted  the growth of Indian search and advertising space. The report from Hindustan Times reports that CUTS is about to file a formal complaint against Google to CCI, however, they have not filed a formal complaint yet. Udai S Mehta, Associate Director, CUTS International & Centre Coordinator, told, “CUTS works, among others, on competition and consumer protection issues. We are against potential anticompetitive activities of businesses.  Action at incipient stages could go a long way to check subsequent problems besides having a deterring effect on such practices.”

Not The First Time For Bharatmatrimony

In 2009, Chennai-based Consim Info, that runs Bharatmatrimony.com, had petitioned the Madras High Court against Google for displaying their competitors ads on Google search result page when someone searches for ‘bharatmatrimony’, and taken Google, Shaadi.com and SimplyMarry.com to court. Do read our interview with Consim Info CEO Murugavel Janakiraman then.

Not The First Case Against Google At CCI

In February 2011, CCI reviewed (PDF) a complaint filed by Eximorp India Pvt Ltd against Google India Pvt Ltd for alleging abuse of the dominant position by Google for its Adwords service. Eximorp, which trades wood and wood panel products, filed a complaint against Google India with following allegations:

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  • Google’s Business practices are inappropriate and discriminatory in nature.
  • Bidding process introduced by Google to place advertisements on Adwords is non-transparent.
  • Google doesn’t provide information on vistors.
  • Google refused to accept payment via credit card, a discriminatory practice on Geographical location.

However, CCI considered the case and ruled it in favor of Google stating it could not find any evidence that Google has been indulging in any kind of anti-competitive pracitices. CCI also stated that seeking information on visitors ID cannot be called as lack of transperancy and that Google did acept credit card payment for post-pay options.

Antitrust Proceedings Against Google At The European Union

While not specifically related to AdWords, Google has has been under investigation from antitrust authorities in EU for  manipulating its unpaid or Algorithmic search results, exclusivity contracts with advertising partners, and restricting online advertising campaign data. Google has also been under the radar in the US for the same.

Nextag CEO, Jeff Katz appeared for a testimony before Subcommittee on Antitrust, Competition Policy & Consumer Rights where he said that, “But Google abandoned these core principles when they started interfering with profit growth.  Today, Google doesn’t play fair.  Google rigs its results, biasing in favor of Google Shopping and against competitors like us,”. Nextag, an internet comparison shopping company said in the testimony that Google is no longer just a search engine and that it favors Google’s favorite vendors and advertisers.

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