Google Faces Antitrust Heat In India

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Google could face a penalty of up to $5 billion if found guilty by the Competition Commission of India in a two-year old probe launched to investigate if the company abused its dominant position in the business of Internet search and advertising.

India started antitrust investigation against Google in 2012 based on complaints from the advocacy group, CUTS International, and a local matrimony website.

When contacted, a Google India spokesperson said the company is cooperating with the CCI in the investigation.

Google is not new to such probes. In February this year, it settled a decade-long antitrust investigation with the European Commission and even avoided potential penalty worth $5 billion or any restructuring of the company’s businesses.

A research paper published on the website of India’s competition regulator explains the scope of this probe. According to the research first published in 2012, Google ‘s Chrome, Android smart phones and Chrome OS, all encourage use of Google’s search, which makes a thorough investigation even more essential. This is what the CCI paper accused Google of:

The issues identified in respect of Google definitely raise doubt about the conduct of the Google and needs in- depth investigation to determine whether such practices relating to search engines and advertising search market are also being resorted to in India. This is because Indian market also has no. of vertical search engines which may be feeling the brunt.

In the 2012 paper, India’s competition regulator also said it had early proof about Google abusing its dominant position in search-based advertising.

The Competition Commission of India (CCI) has already found “prima facie”evidence that Google had abused its dominant market position by being discriminatory in allotting keywords to matrimonial site Bharatmatrimony.com”. The probe is to focus on Ad Words – Google’s flagship advertising product and main source of revenue.

With around 200 million Internet users and a booming e-commerce sector, India offers a great opportunity for Google to make up for its lack of presence in China — the world’s biggest Internet market. But questions have been asked about how Google has been using search to promote its own services.

A Forbes India story in July last year highlighted how Google was using its dominant position in Internet search-based advertising to its own advantage. It cited examples where flight search results would display Google’s “Flight Search Service” ahead of others.

We will be updating this story with additional insights from Google and the Indian government officials.