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CCI orders probe against Google on complaint filed by news publishers

The plea, submitted by Digital News Publishers Association, accuses the search giant of abusing its dominant position in digital marketing

e4m by Javed Farooqui
Published: Jan 8, 2022 8:28 AM  | 4 min read
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The Competition Commission of India (CCI) has ordered an inquiry against Google for alleged abuse of dominant position in the digital advertising market on a complaint filed by the Digital News Publishers Association (DNPA). DNPA’s members include Dainik Bhaskar, India Today, NDTV, Hindustan Times, The Indian Express, The Times of India, Amar Ujala, Jagran New Media, Eenadu and Malayalam Manorama.


In an order dated January 7, the commission has directed the Director General (DG) to cause an investigation into the matter under the provisions of Section 26(1) of the Act. The commission has also directed the DG to complete the investigation and submit the investigation report within a period of 60 days from the date of receipt of this order.

"The commission is of prima facie view that Google has violated the provisions of Section 4(2)(a) of the Act, which merits investigation. Further, the Informant has also alleged that above-mentioned conduct of Google results in violation of the provisions of Section 4(2)(b)(ii) as well as Section 4(2)(c) of the Act. The DG can appropriately examine these allegations as well during investigation," the CCI said in an order.

DNPA has filed the complaint against Alphabet Inc., Google LLC, Google India Private Limited and Google Ireland Limited (Google/OPs) under Section 19(1)(a) of the Competition Act, 2002 alleging violation of Section 4 of the Act.

The association averred that more than 50% of the total traffic on the news websites is routed through Google and, being the dominant player in this field, Google, by way of its algorithms, determines which news website gets discovered via search. It further averred that the content produced by news media companies create the context for the audience to interface with the advertiser; however, online search engines (Google) end up leveraging the revenue/returns much more than publishers.

The DNPA has alleged that Google is the major stakeholder in the digital advertising space, and it unilaterally decides the amount to be paid to the publishers for the content created by them, as well as the terms on which the aforesaid amounts have to be paid. It also alleged that Google has unilaterally decided not to pay the publishers of news for the snippets used by them in search. It also averred that the website publishers only receive 51% of the advertisement spend by the advertisers.

According to the association, Google is a dominant player in four key markets namely market for online search advertising services in India, market for online general web search services in India, market for publishing of news content in India and market for online advertisement in India.

The DNPA has alleged that Google has abused its dominant position in the market and violated Section 4(2)(a)(i), Section 4(2)(b)(ii), Section 4(2)(c), and Section 4(2)(e) of the Competition Act, 2002. The association has also submitted that Google is under scanner for anti-competitive practices in Australia, France, and European Union.

"In view of the above, the Informant (DNPA) has alleged that Google, by way of its conduct and actions, has violated provision of Section 4 of the Act, as mentioned above. Accordingly, the Informant has, inter alia, prayed the Commission to pass an order under section 26(1) of the Act to inquire into the conduct of the OPs," the CCI order reads.

The commission is of the prima facie view that Google is dominant in both the relevant markets, i.e., market for online general web search services and market for online search advertising services in India. It also noted that the instant information highlights the alleged bargaining power imbalance that flows from the alleged position enjoyed by Google as a necessary trading partner for digital news publishers in accessing online audience as well as in generating digital ad revenue.

The case, CCI said, also brings forth the issue of alleged lack of transparency and information asymmetry in the ad tech services provided by Google, which does not allow publishers to optimize the yield on their ad inventory.

"Therefore, for examining the alleged conduct of Google, in addition to its role in online general search as well as search advertising, it is important to note Google’s role in this value chain in ad-tech. In this regard, the Informant has averred that Google not only has a monopolistic position in search markets, but also has a very strong position in online digital advertising intermediation services," the order states.

 

 

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