On June 22, European Union Antitrust Regulators opened an investigation against adtech business of Google to examine if the company favoured its own business over rivals, advertisers and online publishers.
EU antitrust regulators to investigate Google’s adtech business https://t.co/zz4iQanCP2 pic.twitter.com/eycyhP7kBm
— Reuters (@Reuters) June 22, 2021
As per reports, Google generated $147 billion in revenue from online ads in 2020. Currently, the company is the largest shareholder of online ads across the world. The ads appeared on several properties, including search, YouTube and Gmail accounted for the maximum sales and profits. Out of the total revenue, Google generated, 16% came from the display or network business where other media companies use its technology to publish/sell ads on their websites or applications.
The EU Commission said it would examine if Google distorted competition by restricting access to third parties to user data for advertising purpose on applications and websites and reserved it for its use. Margrethe Vestager, European Competition Commissioner, said, “We are concerned that Google has made it harder for rival online advertising services to compete in the so-called ad tech stack.” She added that the commission would look at Google’s policies on user tracking to ensure they are in line with fair competition.
A Google spokesperson said that the company would engage constructively with the commission. The company said, “Thousands of European businesses use our advertising products to reach new customers and fund their websites every single day. They choose them because they’re competitive and effective.”
In the last decade, Vestager has fined Google more than $9.5 billion for blocking rivals in online shopping, Android smartphones and online advertising.
Amazon and other e-commerce sites may face trouble in India
The Government of India has announced plans to introduce stricter norms for e-commerce platforms such as Amazon and Flipkart. The Department of Consumer Affairs has recently sought comments and suggestions on the proposed amendments to Consumer Protection by July 6.
If approved by the government, one of the amendments may block the e-commerce giants from holding flash sales of goods and services. Notably, both Amazon and Walmart-owned Flipkart have a number of Flash sales year long, which allegedly hamper small businesses. The amendments would prohibit e-commerce sites from holding such sales.
Countless complaints from consumers and traders
In its press release, the government said that it had received countless complaints from consumers, traders and associations against the widespread cheating and unfair trade practices observed in the e-commerce ecosystem. Hence the Ministry of Consumer Affairs has proposed prohibiting e-commerce platforms from holding flash sales in India. Such sales are popular around festival seasons like Diwali, Independence day etc.
The ministry said, “Certain e-commerce entities are engaging in limiting consumer choice by indulging in ‘back to back’ or ‘flash’ sales wherein one seller selling on the platform does not carry any inventory or order fulfilment capability but merely places a ‘flash or back to back order with another seller controlled by the platform. This prevents a level playing field and ultimately limits customer choice and increases prices.”
Possible manipulation of search results
The ministry has alleged that there is a possibility the e-commerce platforms use the technology to manipulate search results to promote certain sellers and offers. Such practices give an unfair advantage to selected sellers over the others. The amendments aim to bring transparency to the e-commerce ecosystem.
E-commerce platforms to appoint nodal and chief compliant officers
Recently, the government of India ordered social media giants and other media platforms to appoint nodal and compliance officers. On the same lines, the government has proposed that the e-commerce platforms must appoint a chief compliance officer and nodal officers as well as resident grievance officers in India.
The ministry noted, “To ensure compliance of the Consumer Protection Act, 2019 and Rules, the appointment of Chief Compliance Officer, a nodal contact person for 24×7 coordination with law enforcement agencies, officers to ensure compliance to their orders and Resident Grievance Officer for redressing of the grievances of the consumers on the e-commerce platform, has been proposed. This would ensure effective compliance with the provisions of the Act and Rules and also strengthen the grievance redressal mechanism on e-commerce entities.”
Best before the date to be mentioned
Another proposed amendment would make it mandatory to mention the best before or use before date with the products so that the consumers can make a firm decision about the purchase. Currently, as it is not mandatory, consumers often complain that they received expired products.