CCI Slaps Fine of Rs. 135 Crore on Google for Anti-Trust Issues

February 12, 2018

Case name: Matrimony.com Limited Vs. Google LLC & Others 

Date of Judgment: January 31, 2018

In this recent case, the Informant i.e. Consim Info Private Limited (Consim/Matrimony.com) alleged that Google, Inc. indulged in contravention of the provisions of Section 4 of the Competition Act, 2002. It was also alleged by the Informant that Google runs its core business of search and advertising in a discriminatory manner, causing harm to advertisers and indirectly to the consumers. Allegations were also made about the abusive conduct of Google in the market for online search advertising through imposition of unfair and discriminatory conditions on its customer’s etc.

Consequently, the Commission (Competition Commission of India/CCI) on the basis of aforesaid allegations, directed the Director General (DG) to conduct investigation in the matter. The DG in its report concluded that Google indulged in abuse of dominant position in both the relevant markets of Online General Web Search Services and Online Search Advertising in India.

The Report also opined that Google was also found to be abusing its dominance in online web search and online search advertising markets by imposing unfair conditions upon trademark owners whose trademarks were being allowed to be bid as keywords by third parties in online search advertising, in violation of Section 4(2)(a)(i) of the Act.

Also read What is Abuse of Dominant Position under Competition Act?

The Commission by majority held that Google was liable for abuse of dominant position. Other observations made by the Commission in the case are enumerated below:

Also read Process of Inquiry under the Competition Act, 2002

  • That Google enjoyed dominant position in Online General Web Search and Web Search Advertising Services markets in India. That Google abused its dominant position on the following three counts:

(a) Ranking of Universal Results prior to 2010 which was not strictly determined by relevance. 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 specialized 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.

  • That imposing of unfair conditions on such publishers by Google amounted to violation of the provisions of Section 4(2)(a)(i) 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.
  • The Commission directed Google not resort to the practice of displaying of Universal Results at fixed positions.
  • So far as the contravention noted by the Commission in respect of Flight Commercial Unit is concerned, the Commission directed Google to display a disclaimer in the commercial flight unit box indicating clearly that the “search flights” link placed at the bottom leads to Google’s Flights page, and not the results aggregated by any other third party service provider, so that users are not misled
  • The Commission directed Google to not enforce the restrictive clauses with immediate effect, as is found in the order, in its negotiated direct search intermediation agreements with Indian partners.
  • The Commission however found that that Google’s Keyword Bidding Policy did not prohibit advertisers from bidding on trademarked keywords. Google applies this policy universally, and permits advertisers to bid on Google’s own trademarks as well. Depending on the query and a variety of other factors, free results may include links for a trademark owner’s rivals in response to queries that include a trademarked term. Prohibiting advertisers from bidding on queries that include trademarked terms might result in a perverse situation where Google cannot return ads for competitive or complementary products even when users are searching for them. Therefore by allowing bidding on trademarked terms, it increases the relevance of Google’s ads which benefits users also.

The Commission noted that it may impose such penalty upon the contravening parties as it may deem fit which shall be not more than ten per cent of the average of the turnover for the last three preceding financial years. Reportedly, the penalty is being calculated to be approximately Rs. 135.89 Crores.

Here it would be relevant to note that in the case a dissenting order has also been recorded by two members of the Commission, whereby the members are not in agreement with the majority view with respect to alleged contravention of the Act by Google in respect of Flights Unit, Direct Search Inter mediation Agreements and historic use of Fixed Positions for Universal Results.

The case can be accessed here.

Also read Powers and Functions of the Competition Commission of India

 

 

About the Author

Shilpi Sharan

- Shilpi Sharan is the Editor at Vakilno1.com - an Advocate with extensive knowledge in myriad fields of Law. She has a flair of writing and has legal publications in national and international law magazines to her credit. She focuses on legal research and aims at raising public awareness of laws in India.