Google Fined Rs 136 Crore By India Watchdog For 'Unfair Search Bias'

India’s Anti-trust regulator, Competition Commission of India (CCI) on Thursday imposed a fine of Rs.136 crore on search engine Google Inc. for abusing its dominance in online web search and web advertising markets.

What CCI said?

The CCI said it imposed the penalty based on complaints from Matrimony.com and the Consumer Unity and Trust Society (CUTS) – back in 2012- against Google LLC, Google Indian Pvt. Ltd. and Google Ireland Ltd.

The complaints had argued that the technology company mixes results from YouTube, Google Maps, and Google News into its organic search results, to promote these websites. The complaints added that Google promoted its own services irrespective of whether they are the most popular or relevant sites to the search.

“Google was found to be indulging in practices of search bias and by doing so; it causes harm to its competitors as well as to users. It runs its core business of search and search advertising in an unfair and discriminatory manner and creates an uneven playing field by unduly favoring its own services over those of competitors,” said CCI, passing the orders.

“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. It causes harm to other website owners, by moving their websites down on the Search Engine Result Page, or SERP,” CCI added.

What was it?

“The CCI in its order noted that the allegations against Google in respect of search results essentially centred on the design of Search Engine Result Page (SERP). Exhibiting self-imposed regulatory design forbearance from scrutinising product designs in ascertaining anti-trust violations, CCI noted that product design is an important and integral dimension of competition, undue intervention in designs of SERP can affect legitimate product improvements. It further observed in its order 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,” a press release stated.

How much?

The penalty amount of Rs.135.86 crore translates to 5% of the company’s average total revenue generated from India operations from its different business segments for the financial years 2013, 2014 and 2015, according to the CCI order.

Globally, this is one of the rare cases where Google has been penalised for unfair business practices.

The CCI has given thoughtful consideration on the submission made by Google on the issue of penalty and found it appropriate to impose a fine.

The company is required to pay the fine within a period of sixty days.

What Google had to say?

A Google spokesman said the company was reviewing the “narrow concerns” identified by the commission and will assess its next steps.

“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 issued it examines, our conduct complies with Indian competition laws,” he said.

Last year, the European Commission imposed a record 2.4 billion euro (3 billion dollars) fine on the company for favouring its shopping service and demoting rival offerings.

What is CCI?

The Competition Act, 2002, as amended by the Competition (Amendment) Act, 2007, follows the philosophy of modern competition laws. The Act prohibits anti-competitive agreements, abuse of dominant position by enterprises and regulates combinations (acquisition, acquiring of control and M&A), which causes or likely to cause an appreciable adverse effect on competition within India.

Competition Commission of India is a statutory body of the Government of India responsible that enforces the Competition Act, 2002 throughout India, to prevent activities that have an appreciable adverse effect on competition in India.

It is the duty of the Commission to eliminate practices having adverse effect on competition, promote and sustain competition, protect the interests of consumers and ensure freedom of trade in the markets of India