Google India Under Scrutiny For Alleged Anti Competitive Practices

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On Friday, 7th January, India’s Competitive Commission ordered an investigation into Google India of Alphabet Inc after allegations from the Digital News Publishers Association that the company is abusing its dominant position (1). 

And India is not the first nation. The search engine giant had previously and unsuccessfully tried to fight news publishers in Australia and France. It had also resisted efforts by the European Union, enforcing a law that mandated big tech companies to pay publishers for their content. Last year, Google agreed to pay local publishers in Australia and France.

The global story is now playing out in India too. The CCI has found merit in directing an investigation into the tech giant’s abusive conduct vis-a-vis news publishers.

The CCI noted that Google India is a dominant player in the country’s web search services and online search ad services. The order further noted that it is prima facie abusing its top position to impose unfair conditions on new digital publishers (2).  

It is worth noting that it is the third antitrust investigation in India against Google. The first two are CCI’s probe into the platform’s online ad business and the Play Store app. And it is in no way unexpected; Google would have known that it was coming. 

Read Also: Indian Giants Forms an Alliance to Tackle Google Monopoly

The Complaint Against Google India

The Association complained of unfair conditions and stated that the tech giant had broken some antitrust laws. Its strong position in the news aggregation industry has resulted in advertising losses for publishers, with only 51% of ad expenditure going to them.

They stated that Google had denied fair advertising revenue to its members.

The Association submitted that Google is a major stakeholder in the digital advertising space in the complaint. Hence, it unilaterally decides the amount it would pay its publishers for the content they created and the terms for the amount to be paid (3).  

“Google is not only in a monopolistic position in web searches in India, but it also holds a strong position in advertising intermediation and controls a or share at every level,” stated the Association in its submission to the CCI. 

Read Also: Paytm Vs. Google Feud: Is it Time for India to Regulate App Stores?

The Probe

“In a well-functioning democracy, we cannot undermine the critical role our news media play, and we need to ensure that digital gatekeeper companies do not abuse their dominant position that can harm the competitive process of deciding a fair revenue distribution among all stakeholders,” stated CCI in its order. 

The Commission further stated that it needs to examine whether the use of snippets by Google is because of the bargaining power imbalance between the tech giant and news publishers and if it affects the referral traffic to news publishers and their monetizing abilities.

According to reports (4), the CCI has directed the director general to probe the allegations of the Association and submit the investigation reports within 60 days of the order receipt. 

“The Commission is satisfied that a prima facie case is made against the alleged conduct of Google at this stage, which merits an investigation,” stated the Commission. 

The investigation will look into the alleged violations of section 4(2)(a), 4(2)(b)(ii), 4(2)(c), and Section 26(1) of the Act.

“Without doubt, since Google is the gateway, it generates considerable traffic for new publishers. However, the bargaining power imbalance and denial of a fair share in the ad revenue, as alleged by the Association, merit a detailed investigation,” it stated.

It seems that the instant information highlights the alleged bargaining power imbalance that flows from the dominant position Google enjoys as a vital partner for digital news publishers in accessing online audiences and generating digital ad revenue, believes CCI.

It also observed that the case brings forth the alleged lack of transparency and information asymmetry in the ad tech services offered by Google, which does not allow publishers to optimize their ad inventory yields. 

In its order, the Commission asserted that it is of the prima facie view that Google is dominant in both relevant markets, the market for web search services and digital ad services in India. Therefore, the D.G. investigation would examine all those issues in a comprehensive manner by offering an opportunity to all concerned parties to present their case. 

The Commission remarked on the developments in some nations, including France and Australia, that Google had been asked to enter into a fair and good faith negotiation with news publishers for paid licensing of content. It would address the bargaining power imbalance between the two, tackling Google’s unfair conditions (5).

Read Also: Using Chrome is About to Get Complicated with FLoC

A Well-Deserving Investigation?

It is yet another blow for Google in India, one of its key markets. It has also faced public criticism from local developers and startups for enforcing policies and charges they contend hurt their revenue and growth. 

Google is also facing multiple antitrust challenges in the United States and a potential probe in China (6). Of course, the search engine giant has denied any misdeeds. 

According to legal experts in India, the slew of antitrust cases against Google comes as no surprise; on the contrary, it was inevitable. 

“The investigation requested Google in India is similar to inquiries undertaken in other countries, and I am not surprised, it was expected,” stated MM Sharma, Head Competition Law Practice from Vaish Associates Advocates, when Google was slapped with a complaint about an abuse of its dominant market position in smart tv operating system in India last year (7). 

In 2018, the CCI had fined Google 18.5 million USD for search bias. In 2020, it had also started investigating Google for allegedly misusing its dominant position to reduce the ability of smartphone markets to choose alternative versions of its Android system.

In 2021, the CCI had also reviewed a case with allegations that Google abused its market position to unfairly promote its mobile payments app, Google Pay, in India.

However, according to experts, the latest allegations will be interesting to watch since it is extremely challenging to prove that Google is abusing its dominant position (8). 

According to Payel Chatterjee (9), former Head of European practice from a global law firm, if CCI cannot establish its dominance first, there would be no question of abuse. 

“In addition, establishing that the search engine giant is abusing its alleged dominance in the market will need some specific and reliable information that can be demanding to produce. For instance, last year, CCI had to dismiss a probe into abuse of dominance case against WhatsApp Pay for the lack of specific information,” explained Chatterjee.

It further explains which regulatory and government authorities worldwide keep scrutinizing Google amid potential anticompetitive concerns (10). 

The central concern remains: Have companies like Google, Amazon, Apple, Facebook, er, and Meta become too powerful for our governments? Do they maintain anticompetitive practices in their market, such as social media, app stores, internet searches, and cloud services? 

Read Also: Tech Giants’ “Goodwill Gestures” Won’t Save Them From Regulators and Critics

A Look into Antitrust Investigations Against Google Worldwide

Australia: 

  • In July 2020, the Australian Competition regulator accused Google of misleading customers to get permission to use their data for targeted ads, seeking a fine in millions and aiming to establish a precedent (11).
  • In the same month, the Australian government had also ordered Google and Facebook to share revenue from news articles, which added to growing global political and regulatory pushback against the digital giants (12). Australia claimed an early win in a protracted licensing battle with Google in February 2021 (13).
  • In April 2021, the Australian competition regulator stated that Google had misled people about personal data collected via Android smartphones (14). 

China: 

  • As of September 2020, China is preparing to launch an antitrust probe into Google and looking at allegations that it has abused its dominant position in Android mobile O.S. to stifle competition (15). 

European Union: 

  • In October 2020, European Union regulators made a “hit list” of about 20 large internet firms, including Google, facing new and tough rules to curb its market power (16).
  • In November 2020, a group of over 165 companies and industry bodies called out to E.U. antitrust authorities to take a tough line against Google, alleging that the U.S. tech giant unfairly favors its own services (17). 
  • In December 2020, businesses in six E.U. countries filed new privacy complaints against Google and other digital ad companies overselling ads to potential advertisers via a bidding process (18). 
  • In June 2021, E.U. regulators opened a probe into Google’s lucrative digital ad business to investigate whether it favors the company’s own business over rivals, online publishers, and advertisers (19).
  • In October 2021, DuckDuckGO and three other search engine rivals of Google urged lawmakers in the E.U. to take action against Google with new tech rules with allegations saying that they are yet to see any positive results from an antitrust ruling against Google (20).

France: 

  • In December 2020, France’s antitrust had fined Google 100 million EUR for breaching France’s rules on cookies (22). 
  • In June 2021, Google agreed to change some of its online ad services under an unprecedented settlement with France’s antitrust watchdog (23).
  • In July 2021, the antitrust watchdog slapped Google a 500 million EUR fine for failing to comply with the regulator’s orders on conducting talks with the nation’s new publishers in a copyright row (24).
  • In January 2022, CNIL, the data privacy watchdog of France, fined Google a record 150 million EUR for making it difficult for internet users to refuse online trackers, aka cookies (25). 

Germany: 

  • In September 2020, the German cabinet approved a draft digital antitrust legislation that will allow authorities to combat market abuse by big tech firms (26).
  • In May 2021, the German antitrust watchdog launched a probe into whether Google and Alphabet in Germany and Ireland are exploiting their dominant position (27). 
  • In January 2022, the German antitrust regulator believes that Google meets the threshold for special abuse control and makes way for antitrust interventions (28).

Italy: 

  • In September 2020, The Italian antitrust regulator launched an investigation into cloud computing services provided by Google, Apple, and Dropbox (30).
  • In October 2020, the Italian antitrust regulator started looking into Google for allegedly abusing its dominating position in Italy’s internet display advertising industry (31).

Japan: 

  • In October 2020, The new head of Japan’s antitrust watchdog said the country would join forces with the United States and Europe to combat any market abuses by the four Big Tech corporations, indicating Tokyo will join global efforts to control digital platform operators (32).

South Korea:

  • In September 2021, Google was fined 207 billion won (176.64 million USD) by South Korea’s antitrust Commission for prohibiting modified versions of its Android O.S. (33).

United Kingdom: 

  • In March 2021, the U.K.’s antitrust authority should investigate the “symbiotic relationship” between Google and Apple, according to a group of internet advertisers (34). 
  • In June 2021, in its latest investigation against the tech giants, Britain’s competition watchdog said it would look at whether Apple and Google’s dominance of mobile phone operating systems, app stores, and web browsers harmed consumers. The Competition and Markets Authority stated it would conduct a “market study” into the topic to examine if the pair’s effective duopoly was suffocating competition and ripping off customers, as well as harming businesses such as app developers (35).

United States: 

  • In July 2020, the U.S. antitrust authorities could release a deep dive into antitrust charges against four of America’s largest tech companies, Facebook, Amazon, Google, and Apple, as well as recommendations on how to tame their market power by late summer or early fall (36).
  • In July 2020, Senator Josh Hawley, a Republican, sponsored legislation that would penalize huge tech corporations that sell or show tailored adverts by endangering the industry’s legal immunity, the latest attack on the industry’s business practices (37).
  • In July 2020, at a congressional hearing, the executives of Amazon, Facebook, Apple, and Google were hammered by Democrats and Republicans alike, who questioned their business practices for more than five hours (38).
  • In August 2020, the antitrust investigation into Google and other Big Tech platforms went “full-steam ahead” at the US Justice Department (39).
  • In October 2020, the United States Justice Department filed an antitrust case against Google, accusing it of improperly leveraging its market power to ward off competitors and stating that nothing is off the table, including the dissolution of the internet search and advertising firm (40).
  • In April 2021, Senator Josh Hawley, a Republican, announced that he had introduced a bill prohibiting any company with a market value of more than 100 billion USD from merging or acquiring another company. This category includes the five largest U.S. tech companies: Google, Amazon, Apple, Facebook, and Microsoft (41).
  • In September 2021, The United States Justice Department started preparing a second monopoly action against Google over its digital advertising business (42). 
  • In October 2021, Senators Amy Klobuchar, a Democrat, and Chuck Grassley, a Republican, plan to introduce a measure prohibiting Big Tech platforms like Amazon and Alphabet’s Google from preferring their products and services (43).
  • In November 2021, A group of states, led by Texas, filed an amended case against Google, accusing the tech giant of using arm-twisting and disregarding antitrust rules in its drive to expand its already dominating ad business (44).
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Rucha Joshi, currently managing a team of over 20 content writers at TimesNext is fueled by her passion for creative writing. She is eager to turn information into action. With her hunger for knowledge, she considers herself a forever student and a passionate leader.

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