Google at Center of Antitrust Probe in India

By Todd R. Weiss  |  Posted 2014-03-10

Google at Center of Antitrust Probe in India

Google is facing antitrust fines of $5 billion in India, where the company has been the subject of an antitrust investigation for some two years, according to a March 9 report in The Economic Times.

The probe is being conducted by the Competition Commission of India (CCI), which is a government watchdog agency that watches over business practices to ensure fair competition.

A Google spokesperson said that the company is "extending full co-operation to the Competition Commission of India in their investigation," The Economic Times reported.

The probe in India has been going on during the same time as similar antitrust investigations had been underway against Google in the United States and in the European Union (EU).

In India, as in the U.S. and European cases, the antitrust probe related to allegations that Google has been "abusing its dominant position in the Internet search engine space," the paper reported. If Google is found guilty of the allegations in India, it could be subject to a fine of up to 10 percent of its average annual revenues over the last three years, or about $5 billion, the paper reported.

In India, there are no provisions for settling such a case, the paper reported. Settlements were what resolved the similar cases in the U.S. and in Europe.

The CCI has referred the case to its investigation arm, the Director General (DG), according to The Economic Times, which "has also collected comments from third-parties with regard to this case" in preparation for making a report back to the CCI.

Antitrust probes around the world have been dogging Google for some time.

In February, after some 39 months, a settlement finally was reached between Google and the EU to bring an end to an antitrust case that has saddled Google in Europe since November 2010.

The settlement, which still faces formal final approval by the EU and its regulatory arm, the European Commission (EC), includes concessions from Google on how it will display competitors' links through the Google search engine, according to an earlier eWEEK report. The EU probe had been investigating Google's Internet search processes, which competitors including Microsoft, Expedia and British search services company Foundem, argued unfairly promoted Google's advertisers at the expense of competitors.

The pending agreement with the EU means that Google will change its display practices but not have to pay a fine that could have amounted to as much as $5 billion there. Under the terms of the apparent settlement with the EU, Google will more clearly identify its own paid ad content from its own customers when displaying search content to users, and will display them with unique identifications and separate placement to make their presence clearer to users. That will be done to address concerns from competitors that Google promoted its own ads more strongly than those from other online ad companies, according to the EU proposal.

"Within its Web search results, Google displays its own specialized search services more favorably than competing services," the EU stated. "In many instances, relevant competing services are as a consequence more difficult for the user to find. Users are not informed of this favorable treatment of Google's own services."

Google at Center of Antitrust Probe in India

To help make the sources of such content easier by users, Google will now have to "display prominent links to three rival specialized search services in a format which is visually comparable to that of links to its own services," the EU stated. "For instance, if the Google links have images, the rival links will have images as well, including on mobile devices."

The settlement dance between the EU and Google has been going on since at least early 2013, when it appeared that the two sides were close to a tentative deal. Similar rumors about settlements also surfaced in November 2013.

But competitors, including Microsoft, Expedia and Foundem, often criticized the proposals that arose in the past, arguing that they still didn't go far enough to level the playing field for rivals.

In October 2013, after Google had submitted an earlier settlement offer, the EU asked Google rivals for their opinions on the offer from Google. Those rivals loudly criticized the company's proposals at the time. In September, Google had submitted a fresh batch of concession proposals to the EU, but they failed to address the key concerns of the EU and the complainants in the case.

Those proposals arrived two months after the EC had asked for more concession ideas from Google. The EC had been seeking Google's ideas on how it could settle complaints that the company was blocking competitors' results in Web searches in favor of its own results.  

Google has been under investigation in Europe since 2010 regarding its search engine, which holds more than 60 percent of the search market, with Microsoft's Bing being a distant second. Competitors have claimed that Google works its search algorithms to favor its own products and results over those of others, giving it an unfair advantage in search and Web advertising.

Google's legal situation in Europe continues, even as a similar antitrust probe in the United States was resolved in Google's favor in January 2013. Instead of a major antitrust prosecution in the United States, Google entered into a voluntary agreement with the Federal Trade Commission to change some of its business practices to resolve the complaints of some competitors about Google's practices. In the FTC case, key competitor Microsoft had led a fight with other technology companies to argue for strong FTC actions against Google to punish it for what they believed were unfair business practices.


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