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February 10, 2018

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Search bias: Google told to pay Rs1.358 bn fine for abusing its power in India

NEW DELHI/MUMBAI: The Competition Commission of India (CCI) has imposed a Rs1.358 billion fine on Google for “search bias” and abusing its “dominant position”.

The Indian competition regulator’s ruling comes after similar setbacks in the European Union and Russia for the world’s most popular search engine.

In a 190-page order, the Competition Commission of India said Google abused its dominant position on three counts that largely relate to search, while no foul play was seen in case of advertising. CCI imposed a penalty amounting to 5% of the average revenue generated from India over the three years to FY15, an amount of Rs135.85 crore, which has to be deposited within 60 days. A maximum penalty of 10% can be imposed under the act.

“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,” the order said. ‘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,” the CCI said. The ruling follows complaints filed by Matrimony.com and Consumer Unity & Trust Society (CUTS) in 2012 against Google LLC, Google India (Pvt) Ltd and Google Ireland Ltd.

The key complaint against Google is that it operates search and its advertising services AdWords in a discriminatory manner, causing harm to advertisers and indirectly to consumers.

Further, it was alleged to be 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. Google’s spokesperson said the CCI order had found in its favour for most of the issues examined, barring a few. “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,” the spokesperson said.

Last year in a similar case, the European Union’s anti-trust arm fined Google $2.7 billion for promoting its own products over others in what should have been a “universal” search. Google also settled an anti-trust matter in Russia out of court.

ET was first to report CCI’s probe against Google in August 2015. At the time the Indian commission was the first in the world to take this stance even as global cases were ongoing.

The CCI had come to a preliminary conclusion that Google was promoting its own services in generic search results in a report in 2015. The report was based on inputs or complaints from Flipkart, Facebook, Nokia’s maps division, MakeMyTrip and several other companies.

Udit Singh Ahlawat, managing partner of Ahlawat and Associates, a Delhi-based law firm said, “they obviously have the right to appeal against the order. The appeal goes first to an appellate tribunal but any relief if at all will come from the Supreme Court finally in this matter”.

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