Competition Commission of India fines Google Rs 136 crore for 'search bias'

The Competition Commission of India on February 7, 2018 imposed a fine of Rs 136 crore on internet search giant Google for unfair business practices in the Indian market for online search.

The regulatory body took the decision after a detailed probe on the complaints filed in 2012. It said through a majority order that the penalty is being imposed on Google for ‘infringing anti-trust conduct’.

In response to the CCI ruling, a Google spokesperson stated that the company is reviewing the narrow concerns identified by the Commission and will assess its next steps.

Background

The ruling has come on complaints filed by Matrimony.com and Consumer Unity & Trust Society (CUTS) back in 2012 against Google LLC, Google India Pvt Ltd and Google Ireland Ltd.

In the complaints filed, it was alleged that Google is indulging in abuse of dominant position in the market for online search through practices leading to search bias and search manipulation.

While the majority order is by CCI chairperson D K Sikri and three members, two members have issued a dissenting order saying that they don't find Google in violation of Section 4 of the Competition Act, which pertains to abuse of dominant position.

Globally, this is one of the rare cases where Google has been penalised for unfair business ways, even as it has been under probe in several countries.

The Ruling

The CCI passed its order after analyzing the following aspects:

• Whether Google biases its search results

• Whether it imposes unfair conditions on advertisers

• Whether the company's distribution and intermediation agreements restrict competition

The imposed fine of Rs 135.86 crore translates to 5 per cent of the company's average total revenue generated from its India operations, from different business segments for the financial years 2013, 2014 and 2015.

The commission stated in its order that it was aware that any intervention in technology markets has to be carefully crafted in order to prevent stifling of innovation and denying the consumers the benefits that such innovation can offer. The body stated that this could have a negative effect on the economic welfare and economic growth, especially in countries relying on high growth such as India.

The regulator also noted that product design is an important and integral dimension of competition and any undue intervention in designs of SERP (Search Engine Results Page) may affect legitimate product improvements resulting in consumer harm.

About Competition Commission of India

• It is a statutory body of the Union Government that is responsible for enforcing The Competition Act, 2002 throughout India and to prevent activities that have an appreciable adverse effect on the competition in India.

• The body was established on October 14, 2003 and it became fully functional in May 2009.

• It comprises one Chairperson and six members, all of whom are appointed by the Union Government.

• The main objective of the Commission is to eliminate practices that have an adverse effect on competition, promote and sustain competition, protect the interests of consumers and ensure freedom of trade in the markets of India.

• The Commission is also required to give opinion on competition issues on a reference received from a statutory authority established under any law and to undertake competition advocacy, create public awareness and impart training on competition issues.

Competition Act, 2002

The act as amended by the Competition (Amendment) Act, 2007, prohibits anti-competitive agreements, abuse of dominant position by enterprises and regulates combinations (acquisition, acquiring of control and Merger and acquisition), which causes or is likely to cause an appreciable adverse effect on competition within India.