CCI orders investigation into allegations of abuse of dominance by Google in news aggregation services

Case Details: Digital News Publishers Association v. Alphabet Inc - [2022] 134 taxmann.com 103 (CCI)

Judiciary and Counsel Details

• • Ashok Kumar Gupta, Chairperson
  • Sangeeta Verma and Bhagwant Singh Bishnoi, JJ.

Facts of the Case

In the instant case, the informant (Digital News Publishers Association), a Section 8 Company formulated to promote, aid, help, encourage, develop, protect and secure the interest of digital news publishers filed a complaint under section 19(1)(a) of the Competition Act, 2002 against Alphabet Inc., Google LLC, Google India Private Limited, and Google Ireland Limited (collectively referred to as ‘Google’) alleging violation of Section 4 of the Act.

The Informant claimed that the majority of the traffic on news websites comes from online search engines (i.e. more than 50%), wherein Google is claimed to be the most dominant search engine. The informant argued that Google imposed direct/indirect unfair conditions on the members of the Informant while allowing website links of the members of the Informant on their search engine results.

The informant alleged that Google abused its dominant position to impose unfair and arbitrary conditions on the members of the Informant u/s Section 4(2)(a)(i), as the members of the Informant were not informed of or given any data pertaining to the amount of revenue earned by the Google by providing advertisements on the websites/links of the members of the Informant. Google only give a small chunk of revenue generated to the members of the Informant in an arbitrary manner. The publishers of the news only got a smaller chunk of the revenue generated.

The informant also alleged that unfair acts of Google are detrimental and prejudicial to the interests of the consumers as well as the journalism industry as it de-motivates the entire journalism industry, as they put all hard work into publishing news and get only a smaller chunk of revenue.

The Informant further alleged that Google does not produce any news of their own; however, they have steadily grown their influence in the news space by effectively using their dominance in the relevant markets.

It had been contended that Google not only had a monopolistic position in search in India, it also had a very strong position in advertising intermediation and controls the major share at each level. The informant alleged that Google abused its dominance in every way. The members of the Informant have no other option but to accept the terms, as they are, with no bargaining power whatsoever.

The informant prayed the Commission to pass an order under section 26(1) of the Act to inquire into the conduct of Google for the violation of Section-4 of the Act.

CCI Held

The Commission noted that Google’s market share ranged from 98% to 99% in the mobile search engine market during the period April 2019 to July 2021. Apart from market share data, the Commission had also taken note of the detailed submissions of the Informant on other factors given under Section 19(4) of the Act to assert the dominance of Google in the relevant markets.

Based on the above, the Commission, prima facie viewed that no doubt Google has the dominance in the relevant market and Google had violated the provisions of Section 4(2)(a) of the Act, which merits investigation. The Commission observed that an investigation by the DG would be able to examine the issues comprehensively by allowing all concerned to present their case. Accordingly, directed the DG to cause an investigation into the matter under the provisions of Section 26(1) of the Act.