Competition Commission of India condemns Google’s search engine practices

A report of the Director General (DG) – the investigating arm of the Competition Commission of India (CCI) – alleges that Google has breached India’s competition law prohibition on abuse of dominance.

Although the full terms of the confidential DG allegations are not yet public, reports suggest that the charges resemble some of the theories contained in the European Commission’s statement of objections issued to Google earlier this year and which Google refutes.

The DG maintains that Google acted unlawfully by favouring its own vertical content, allegedly as a result of manual intervention.  Although the European Commission has advanced a similar theory of harm based on alleged undue discrimination, it has claimed that it does not want to second-guess the company’s algorithms which are the basis on which search results appear in a particular way.

The DG has also argued that Google’s non-disclosure of quality scores makes it more likely that it will manipulate search results.  He also maintains that the practice of permitting companies to bid for key words could result in free riding off other companies’ trademarks and goes beyond legitimate search engine optimisation.

Further, there are a host of allegations that Google’s agreements with websites that want to feature Google advertisements are one-sided and anti-competitive, in particular by preventing developers from advertising on multiple search sites.

Google maintains that it does not occupy a dominant position in a relevant market and that its conduct is not abusive.  If the DG’s findings are confirmed, Google could face a fine of up to 10% of its turnover.

The case dates back to 2011 when the internet matchmaking company Bharat Matrimony and the Consumer Unity and Trust Society (CUTS) filed a complaint against Google alleging abuse of market power in search engines. 

The CCI has investigated or is investigating competition cases in relation to other companies or issues that have been or are the subject of investigation by international competition law counterparts.  The case against Google follows a similar pattern.  The CCI has had its behavioural competition law powers since 2009 and has already issued significant infringement decisions in both cartel and abuse of dominance cases.  If the CCI were to confirm the DG’s findings this would be the first case where a competition authority has found Google to have abused a dominant position.  Experience so far with other authorities – in the US and EU – suggests however that the case will be fiercely contested and it is far from over yet.