Early this month, there were reports of the Competition Commission of India (CCI) accusing Google of abusing its dominant position in online search.
Since 2012, the Competition Commission of India has been probing Google India for misuse of its dominant position in search. In 2014, the CCI also imposed a fine of Rs 1 crore for failing to comply with the directions of the Director General (DG) seeking information and documents. A Google spokesperson said the company was “disappointed by this development.”
When we contacted Google India for a response, they said, “In addition to Brazil and Germany, the US Federal Trade Commission, and two state Attorneys-Generals have also investigated and cleared Google’s display and ranking of search results. In fact, following a two-year investigation, the FTC unanimously found that Google’s designs are pro-competitive and benefit users. Over 15 courts and authorities, including many across Europe, have reviewed our AdWords policies and enforcement practices and acknowledged that these are intended to safeguard the interests of users and customers.”
They also said, “We’re currently reviewing this report from the CCI’s ongoing investigation. We continue to work closely with the CCI and remain confident that we comply fully with India’s competition laws. Regulators and courts around the world, including in the U.S., Germany, Taiwan, Egypt and Brazil, have looked into and found no concerns on many of the issues raised in this report.”
With reference to the case, the CCI report says, “it was required of the opposite parties to give details about the change in search algorithm made…either manually or… automated software in the last 24 months…” In response, the report says Google’s response was that “they do not manipulate the search results and manual algorithmic changes are aimed to enhance users experience by providing them most useful and relevant results in response to their query.”
The CCI report further states that the matter was taken up by the DG, and Google and the concerned parties in the case “were directed to furnish the details of algorithmic changes for a limited period w.e.f. August 2010 to December 2010 and August 2011 to December 2011, which substantially reduced the overall volume of information to be submitted.”
In reponse, the parties sought “4 weeks of additional time”. The CCI report claims that it only received “a list of changes made to the search algorithm and not the details of changes.” This was conveyed to the “parties involved in the case”, that “the Office of the DG required much more than mere the title of the changes made in the algorithm i.e. reasons and supporting internal documents to facilitate investigation to reach a logical conclusion.” The report specifically mentions, “It may be noted that till 15.01.2014 i.e. when the DG reported the matter to the Commission, the opposite parties did not supply the said information.”
There are several areas in the CCI document where it finds the parties of not giving the information it needs. It even goes on to say that “during December 16-18, 2013, while recording statements of the representatives of Google, the opposite parties told the DG that they would revert on certain issues but failed to do so.” It adds, “In view of the sequence of events adumbrated above, it is evident that the opposite parties have failed to comply with the directions given by the DG in exercise of its powers under section 41(2) read with section 36(2) of the Act. The Commission is constrained to note that despite liberal indulgence shown by the DG to the opposite parties, the opposite parties engaged in dilatory tactics in order to procrastinate and prolong the investigations without any justifiable reason… In fact, as noted earlier, the opposite parties have conceded the non-compliance with the requisitions made by the DG within the stipulated period”
To the end of the report, it says, “In such circumstances, the Commission has no hesitation in holding that the opposite parties have rendered themselves liable to be proceeded and punished in terms of the provisions contained in section 43 of the Act.”
As per the provisions of section 43 of the Act, if any person fails to comply, without reasonable cause, with a direction given by (a) the Commission under sub-sections (2) and (4) of section 36; or (b) the Director General while exercising powers referred to in sub-section (2) of section 41, such person shall be punishable with fine which may extend to rupees one lakh for each day during which such failure continues subject to a maximum of rupees one crore, as may be determined by the Commission.
While issuing the Rs 1 crore fine, it adds, “Despite reminders and opportunities extended by the DG, the opposite parties advanced frivolous and vexatious pleas to delay and avoid compliance. It may be noted that the period of failure to comply commenced w.e.f. 26.02.2013 in terms of the first notice of the DG dated 12.02.2013 whereby the opposite parties were directed to comply with the requisitions contained therein before the said date… In the result, a fine of rupees one crore is imposed upon the opposite parties. The opposite parties are further directed to deposit the same within a period of 60 days from the receipt of the order. The opposite parties are also directed to furnish the informations/ documents required by the DG vide the notices under consideration within a period of 10 days from the receipt of this order, if not already furnished”
From the report, it is evident the CCI observes that the matter has lingered on for too long, and it would have preferred a better response to the notices it issued to companies such as Google. In addition to the fine, it emphasises that it still needs the information it requested for through the course of the case since 2012.