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CCI imposes Rs 136 cr penalty on Google for abuse of dominant position

MUMBAI: Fair trade regulator Competition Commission of India (CCI) has imposed a penalty of Rs 135.86 crore penalty on technology giant Google for “search bias” and abuse of “dominant position”.

The penalty amounts to 5% of three-year turnover from FY13 to FY15. The average revenue for the three years comes at Rs 2717.27 crore. The amount has to be deposited within 60 days.

The order was passed on complaints filed by Matrimony.com and Consumer Unity & Trust Society filed in 2012. The two companies had alleged that Google runs its core business of search and advertising in a discriminatory manner, causing harm to advertisers and indirectly to the consumers.

It was alleged that Google is creating an uneven playing field by favouring Google’s own services and partners, through manually manipulating its search results to the advantage of its vertical partners.

In the order, the CCI said that Google abused its position on three counts that largely relate to search advertising. These are as follows:

(a) Ranking of Universal Results prior to 2010 which was not strictly determined by relevance. Rather the rankings were pre-determined to trigger at the 1st, 4th or 10th position on the SERP. Such practice of Google was unfair to the users and was in contravention of the provisions of Section 4(2)(a)(i) of the Act.

(b) Prominent display and placement of Commercial Flight Unit with link to Google’s specialised search options/ services (Flight) amounts to an unfair imposition upon users of search services as it deprives them of additional choices and thereby such conduct is in contravention of the provisions of Section 4(2)(a)(i) of the Act.

(c) The prohibitions imposed under the negotiated search intermediation agreements upon the publishers are unfair as they restrict the choice of these partners and prevent them from using the search services provided by competing search engines. Imposing of unfair conditions on such publishers by Google amounts to violation of the provisions of Section 4(2)(a)(i) of the Act. Google is doing so because it has dominance in the market for online general web search to strengthen its position in the market for online syndicate search services. This amounts to violation of the provisions of Section 4(2)(e) of the Act. Further, as competitors were denied access to the online search syndication services market, contravention of Section 4(2)(c) of the Act is also made out.

Commenting on the CCI order, a Google spokesperson said the regulator has found that the company’s conduct on the majority of issues examined were in compliance with Indian laws.

The spokesperson further stated, “We have always focused on innovating to support the evolving needs of our users. The Competition Commission of India has confirmed that, on the majority of issues it examined, our conduct complies with Indian competition laws. We are reviewing the narrow concerns identified by the Commission and will assess our next steps.”

Matrimony.com Founder and CEO Murugavel Janakiraman said, “The CCI’s order is a shot in the arm for the Digital India initiative and will encourage the Indian internet ecosystem, in particular, online start-ups. This order is significant as the CCI recognises that Google is the gatekeeper to the internet and has a special responsibility to ensure a level playing field.”