The Competition Commission of India (CCI) has fined Google Rs 1 crore for failing to comply with directives given by the Director General seeking information and documents. This comes a few days after Google had told MediaNama that it is co-operating with the CCI. A spokesperson told MediaNama that ““We’re confident that our products are compliant with competition law in India and we continue to cooperate with the Competition Commission of India and are responding to all their queries.”
Google told the Times of India that it hasn’t received the order, but will review it once they have it.
The DG was investigating a complaint filed by Bharatmatrimony in 2009 and Consumer Unity & Trust Society (CUTS) in 2012 against Google for alleged abuse of marketshare in online search and search advertising.
A few days ago MediaNama had posted details of the issues that the CCI was looking into, as a part of their investigation, on the basis of information that the organisation had sought from Indian Internet companies. CCI had also directed Google to furnish relevant information and documents which may be required by the DG during the course of further investigations.
MediaNama’s take: The most surprising part about this is Google’s claim that hasn’t received the procedural order. If that is the case, it raises a lot of questions about the way CCI went about doing the investigation. However, the CCI choosing to fine Google does indicate that all is not well between the CCI and Google, and we wonder if this might have an impact on the final result. The amount of fine: Rs 1 crore, is a drop in the ocean for Google: in India alone, the company had reported revenues of Rs 1,162 crore, and a profit of Rs 150 crore, in FY13. Google says that it will cooperate with investigation going forward, but it’s not clear what kind of an impact this will have on the operations of the company.
The investigation might be justified because it is not beneficial from an advertising ecosystem perspective, if one company takes a majority of the advertising, and might be receiving better terms than other publishers (read this). Google’s products are among the best in the world, if not the best, but remember that search results can be viewed as a form of distribution: preferential treatment for its own products (YouTube and Maps, for example), can give them undue advantage over others. The company has been shifting its search product from the traditional 10 blue links to actionable information and in a lot of cases the information if taken from various websites. It’s no clear if this aspect is also being investigated by the commission in India.
A possible outcome if any of such an investigation would be more transparency from the search giant, which has been extremely cagey with its advertising practices in India.
CCI case against Google till now
– In June 2012, CUTS filed a formal complaint against Google’s unethical and anti-competitive business practices with the CCI on June 6, 2012. This was the second formal complaint against Google.
– In February 2012, CCI ordered for a formal probe against Google in India for its Adwords service when Chennai based Consim Info, that runs Bharatmatrimony.com formally filed a complaint against Google, citing discriminatory trade practices. At that time, CUTS told MediaNama that the information filed by CUTS against Google is for violations of Section 3 and Section 4 of the Indian Competition Act, 2002 which covers acts on Anti-competitive agreements and Abuse of dominant position. The specifics of the complaint are not known.
– 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 filed complaint against Google for:
- 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 visitors.
- Google refused to accept payment via credit card, a discriminatory practice on Geographical location.
– Bharatmatrimony in 2009, filed a complaint against Google at the Madras high court for displaying their competitors ads on Google search result page when someone searches for ‘bharatmatrimony’. They had taken Google, Shaadi.com and SimplyMarry.com to court.
– In February 2012, Bharatmatrimony again filed a complaint against Google, citing discriminatory trade practices related to its AdWords program.