Indian antitrust watchdog’s probe resurfaces persistent allegations towards the Internet giant’s perceived monopolistic business practices.
HEAD SHOT
- Competition Commission of India (CCI) launched an investigation against Google for alleged unfair business practices in India.
- As per sources from Reuters, the Indian investigation is on similar lines to the European Union probe in 2018.
- Google has found itself at the centre of antitrust controversies around the world, and has been penalized on multiple occasions
- The investigation comes after a yearlong probe by CCI where it found enough merit in complains to initiate a full-fledged investigation.
Ghosts of the anti-trust past have come back to haunt Google all over again. The unhappy authority this time is the Competition Commission of India (CCI) which has ordered a full-fledged investigation to find out if Google misused the market monopoly of Android Mobile OS to block rivals.
As per a Reuters report, India’s antitrust watchdog ordered a probe after complaints had surfaced similar to Google’s malpractices in EU which resulted in indictment. The CCI looked into the complaint in 2018, and decided in mid-April 2019 that the allegations help enough merit to initiate a full investigation.
CCI’s inquiry and investigations might turn out devastating for Google. If proven guilty, it could face repercussions similar to the billion dollar fine that it paid in the European probe.
Love-hate relationship with Antitrust Watchdogs
Antitrust legal battles are a consistent pain for the tech giant. Having lost such disputes more often than not, Google has paid three record fines in Europe. In a separate Russian investigation for similar allegations of Android abuse, Google paid a different fine.
In India too, this isn’t the first such fiasco for google. Last year, the CCI ordered a 1.36 billion rupees ($19.46 million) fine on Google for “search bias” and abuse of its dominant position.
Such battles do not just end up in hefty fines for the global IT giant, but it is forced to do away with several of its practices and make changes to its business strategies.
Antitrust in India: Google’s next nightmare
The CCI’s probe has left Google sweating, with its history of losing such battles. The CCI case might hold water because of the precedent set by the European Union it its indictment of Google. The preliminary probe findings reveal that Google did abuse its dominant position. The complete picture will only be ascertained after the completion of the inquiry.
There is no official correspondence or comment from the authorities at CCI till now about the precise details of the complaint and what the investigation is looking into. However, as per Reuters’ sources, the case is on the ‘exact same lines’ as the one it had to overcome in Europe last year.
The probe is expected to complete in a year’s time. Google’s top brass are likely be questioned by CCI in coming months, including current interim head Vikas Agnihotri who took temporary charge after India CEO Rajan Anandan moved on.
The History of Antitrust in Europe
In the legal case in EU, the European Commission probed into Google’s Search, Android, and online ads practices and decided that Google had wrongfully abused its position in the market.
The EU regulators had said that Google used its monopolistic advantage to force manufacturers to pre-install Google Search and Chrome browser with its Google Play app store. This gave an unfair advantage to Google against the many independent app makers on its Android devices.
Post the EU verdict, Google has had to bring in certain changes to its system in Europe, where users can choose rival browsers and search engines as default in android devices.
The tech giant had to pay a $5 billion fine. Furthermore, Google has been cornered on two other occasions in Europe with a $2.7 billion fine in 2017 for manipulating shopping search results and a $1.7 billion fine over AdSense contracts in 2019.
In the aftermath of the EU fine, Google CEO Sundar Pichai had criticised the decision mentioning in a blog post that the European Commission had ignored the fact that Google’s Android OS competes with Apple’s iOS. He said:
“It also misses just how much choice Android provides to thousands of phone makers and mobile network operators who build and sell Android devices; to millions of app developers around the world who have built their businesses with Android; and billions of consumers who can now afford and use cutting-edge Android smartphones,”
In January 2019, France’s data protection agency, the National Data Protection Commission (CNIL), had fined Google €50 Mn ($57 Mn) setting a precedent by citing the EU’s new General Data Protection Regulation (GDPR) for the first time.
CNIL had stated that the information provided by Google for a new android user is neither clear nor comprehensive. The CNIL report said Google made it confusing for users to understand and manage how their personal information is used.
Google’s fate in the Indian case
As per reports, the CCI has in its powers to impose a fine that amounts up to 10 percent of the relevant turnover in the last three financial years of a company. This would be a substantial number with web browser or search engine being major money churners for Google.
There is a possibility that CCI’s investigations do not find anything substantial that implicates Google. On the contrary, Google too can amend its conduct voluntarily and notify CCI. This might help the internet giant to quell the penalty or get the quantum reduced, if CCI decides that Google is culpable.
Google is pretty confident that it would be able to handle the issue by working closely with the CCI to satisfy the antitrust authority’s doubts about its business practices in India.
A spokesperson from the firm reiterated the contribution of Google to India’s digitization, where affordable Android mobile devices have enabled millions to connect to the internet. The statement said Google looked forward to working with the CCI ‘to demonstrate how Android has led to more competition and innovation, not less.’
Prominent internet companies accused Google in the past
India saw a number of internet-based start ups express anguish in 2015 against what they say as devious and unfair market practices by Google. At least 30 Indian companies which included names such as Flipkart, MakeMyTrip.com, and JustDial called on the CCI accusing Google of abusing its dominant position to rig search outcomes, as was reported by Inc42.
Earlier in 2012, bharatmatrimony.com and Jaipur-based non-profit, Consumer Unity & Trust Society had filed a similar complaint with the CCI.
Google’s worldwide internet monopoly
Over the years, Google has developed into one of the world’s largest monopolies. The internet giant dominates several vertical markets which a major impact in the search, advertising and mobile industry.
The monopolistic number that Google boasts of today are greater than those of the biggest business empires:
- In the search industry, it owns 90 percent of the global market share. Its nearest rival is Bing which has a mere 2 percent share in the market.
- In the advertising industry, Google has grown in leaps and bounds, and now boasts of about 60 percent of the global internet advertising revenue.
- Counterpoint Research found out that Android OS features on 88 percent of the world’s smartphones. In India, about 99 percent of the smartphones sold in 2019 were on Google’s OS.
- Google also owns the largest video platform on the web in YouTube and one of the largest digital advertising companies DoubleClick.
What’s not clearly out there in the open is that Google isn’t just harvesting of user data, but leveraging it to curate entire online environments for its users. A noted antitrust lawyer Gary Reback who has voiced out about Google’s monopoly once opined:
“People tell their search engine things they wouldn’t even tell their wives. It’s a very powerful and yet very intimate technology. And that gives the company that controls it a mind-boggling degree of control over our entire society.”
Google today is worth more than three quarters of a trillion dollars. Google’s parent the Alphabet Company has acquired over 200 companies in the past 14 years which has increased and diversified its monopoly over the everyday lives of users and third parties leveraging its platforms to reach their audience.
PARTING SHOT
- Google has faced over 10 billion dollars in fine across the globe due to government investigations into its business practices.
- The internet giant enjoys a complete monopoly in the Indian mobile market with 99% phones sold in 2018 featuring its Android OS.
- In 2015, at least 30 Indian companies led by Flipkart, MakeMyTrip.com, and JustDial accused Google of abusing its dominant position to rig search outcomes.
- If found guilty in the current investigations by the CCI, Google could face up to 10 percent of its relevant turnover in the last three years in India.
