Google’s skewed relationship with competition commissions across the globe just got even worse. Amid its ongoing tussle with Competition Commission in Europe, the Competition Commission of India has now filed a case against Google, lashing it out for taking undue advantage of its dominant position in the search market, and using it to promote its own products and services.
The case, which will be the first “official” charge against Google worldwide, was prepared after after the CCI consulted over 30 top firms in various sectors like e-commerce, social networking, travel, etc. Companies that went against Google and corroborated CCI’s reports includes Facebook, with India’s top unicorns like Flipkart, MakeMyTrip and others showing support.
The case was first raised by Bharat Matrimony and a Jaipur-based not-for-profit, Consumer Unity and Trust Society. Economic Times reports, that Microsoft too, filed an extensive report regarding this case with the CCI, which ET obtained.
Let us get to why exactly CCI is going against Google, and that too in a first-of-its-kind official case across the globe.
The Competition Commission of india has found google guilty on two fronts. First, and the obvious one, market abuse. This in short translates into the fact, that Google is being accused of promoting its own products and services even though other third-party service may be better and wit more hits.
Say for an example, MapMyIndia has more hits for location searches. Google on the other hand, has been promoting Google Maps and its API above all other third-party services.
The second charge levied on Google, and the more serious one, is Google’s advertising practices. The search giant has been accused of promoting advertisement-based searches, not on the basis of their relevance, but on the basis of which advertiser pays more.
Again, say you are a startup and have developed a far better product than existing market leaders. But since you have a lower advertising budget, your ads will get less prominence, even though you have paid for ads and have a more relevant product.
The CCI has cited example of a UK website, Ciao!, which slipped to the second page of search results from one of the top results overnight.
As a result of Google policy, it is unavoidable for the trademark owners to participate and outbid third parties in the auction process for their ads to appear above others in response to search queries on their own trademark keywords.
said the report.
What next for Google ?
Now this is going to be a tricky situation for google to handle, and strikingly different from other similar ones it has got itself into it.
This is largely because, CCI’s complaint will be the first officially lodged complaint by a Government agency against Google’s practices. While Google has similar issues in Europe, no official complaint has been lodged, and negotiations are still making rounds.
As per CCI rules, if ruled guilty, Google will have to pay 10% of its $14 Billion income which it netted this year. Google, which made revenues worth a staggering $66 Billion, will also be asked to change its practices of doing business within the subcontinent, if it wants to do any business here at all.
Google needs to file its response to the findings by September 10, and a week later present itself before the seven-member commission headed by Chairman Ashok Chawla. Whatever the outcome may be, the search giant can file a case in the Supreme Court though.