The Competition Commission of India (CCI) on Thursday slapped Rs 136 crore penalty on search engine Google for abusing its dominant position in online general web search and web search advertising services in India.
The order was passed in response to informations filed by Matrimony.com Limited and Consumer Unity and Trust Society (CUTS) in 2012.
In a January cover story on Google's 'dominance', Outlook had said a CCI order in the matter involving Google was expected.
In August 2015, IT minister Ravi Shankar Prasad told the Lok Sabha in a written reply that the Competition Commission had directed an investigation into four separate cases involving alleged abuse of market dominance by Google. The first, filed in 2012, involved M/s Consim Info (which owns Bharat Matrimony) and consumer group CUTS. Accusations similar to the Foundem case were levelled, with the parties alleging that “Google runs its core business of online search and search advertising in a discriminatory manner, causing harm to advertisers and indirectly to consumers”. Google was “creating an uneven playing field by favouring its own services and of its vertical partners by manipulating the search algorithms,” the complaint said.
Pradeep Mehta, secretary general of CUTS, who admires Google for the “fantastic” services it provides, had earlier told Outlook the investigation took time and Google delayed matters too—in March 2014, the Competition Commission penalised it to the tune of Rs 1 crore for not cooperating in the investigations.
The CCI in its order now noted that the allegations against Google in respect of search results essentially centred on design of Search Engine Result Page (SERP).
Exhibiting a self-imposed regulatory forbearance from scrutinising product designs in ascertaining anti-trust violations, CCI noted in its order that product design is an important and integral dimension of competition.
It further observed that Google, being the gateway to the internet for a vast majority of internet users due to its dominance in the online web search market, is under an obligation to discharge its special responsibility.
In this backdrop, CCI found prominent display of Commercial Flight Unit by Google on Search Engine Result Page (SERP) with link to Google's specialised search options/ services (Flight) in contravention of the provisions of Section 4(2)(a)(i) of the Act.
CCI noted in its order that Google through its search design has not only placed its commercial flight unit at a prominent position on SERP, it has also allocated disproportionate real estate thereof to such units to the disadvantage of verticals trying to gain market access.
Besides, it was also found that the search engine has provided a further link in such commercial units, which leads users to its specialised search result page (Google Flight) resulting into unfair imposition upon the users of general search services as well.
It also noted in the order that ranking of Universal Results prior to 2010 were pre-determined to trigger at the 1st, 4th or 10th position on the SERP instead of by their relevance. Such practice of Google was unfair to the users and was found to be in contravention of the provisions of Section 4(2)(a)(i) of the Act.
However, the commission noted in its order that since October 2010, Google has made display of such results on free floating basis.
Accordingly, taking Google's submission on record, CCI refrained from issuing any cease order and only directed Google to desist from such a practice in future.
Further, prohibitions imposed under the negotiated search intermediation agreements upon the publishers, have been held to be unfair as they restricted the choice of these partners and prevented them from using the search services provided by competing search engines.
The CCI has also observed that Google was leveraging its dominance in the market for online general web search, to strengthen its position in the market for online syndicate search services.
The competitors were denied access to the online search syndication services market due to such a conduct.
However, CCI did not find any contravention in respect of Google's specialised search design(OneBoxes), AdWords, online intermediation and distribution agreements.
Based on findings of contraventions against the search engine, CCI imposed a penalty of Rs.135.86 crore on it after taking into account its revenue from its India operations only. (Inputs from ANI)