10 Feb 2018 14:09 IST

CCI order may not fundamentally change how Google operates in India

The internet giant has already closed some of the processes found objectionable

The Competition Commission of India’s decision to impose a penalty on Google may not have any significant impact on its operations in India given that the internet giant has already closed some of the processes which the Commission found objectionable. However, the order could set a more level playing field for online advertising companies.

The CCI in its order has primarily given three directions to Google. First, commenting on ‘Universal Results at Fixed position’, it issued a desist order and directed Google not to resort to such fixing of position in future. However, Google has already pulled out this feature. Second, on the issue of ‘Search Intermediation agreement’, CCI has held this to be unfair as they restricted the choice of these partners and prevented them from using the search services provided by competing search engines.

No restrictive clauses

The Commission ordered Google to not enforce the restrictive clauses with immediate effect. However, these search intermediation agreements have already expired. The Commission also directed Google to display a disclaimer in the commercial flight unit box indicating clearly that the “search flights” link placed at the bottom leads to Google’s Flights page, and not the results aggregated by any other third party service provider, so that users are not misled. This is the only aspect where Google will have to make a change. The original plea was that Google was using its ‘dominant’ presence online to influence search results. This plea has not been held up by the CCI.

“The original plea on Google search has not been upheld by CCI. This is a positive sign that the Commission has taken a view which does not interfere with how products should be designed,” said Karan Singh Chandhiok — Partner, Chandhiok & Associates.

Matrimony.com may appeal

According to industry sources, Matrimony.com, which had filed the original complaint against Google, could appeal against the CCI’s ruling.

Sources told BusinessLine that they will appeal to CCI as the ruling does not address the issue of “abuse” of web traffic in a proper manner.

In an official statement, Murugavel Janakiraman, Founder and CEO, Matrimony.com, said, “The CCI’s order is a shot in the arm for the Digital India initiative and will encourage the Indian internet ecosystem, in particular online start-ups. This order is significant as the CCI recognises that Google is the gatekeeper to the internet and has a special responsibility to ensure a level playing field.”

“The CCI has found that Google has engaged in search bias and in privileging its own flight verticals. This has wide ranging ramifications on Google’s treatment of its other verticals as well,” he said, adding that the company is reviewing the order in detail and will assess our next steps.

Key issue

The primary issue presented before CCI was the prominent placement of Google’s commercial units on search engine results page (SERP) in addition to providing disproportionate real estate. Moreover, it contains a link to “Search flights”. Clicking on this link takes users to Google’s Flights Page instead of taking them to a third -party website such as MakeMyTrip.com or Yatra.com. Therefore, Google has given rise to a search bias by unduly giving prominent placement and web real estate of the Flight Unit on its SERP for directing traffic to its own specialised search service.

A Google spokesperson said: “We have always focussed on innovating to support the evolving needs of our users. The Competition Commission of India has confirmed that, on the majority of issues it examined, our conduct complies with Indian competition laws. We are reviewing the narrow concerns identified by the Commission and will assess our next steps.”

“This order will alert and educate the consumers, will give them confidence to take on even giants like Google and sets a precedent for search-related judgments,” said Naval Satarawala Chopra, partner, competition law practice at Shardul Amarchand Mangaldas.

Rajnish Kumar, co-founder and CTO of travel search engine Ixigo, said that the penalty amount on Google could have been higher. “We think CCI would have carefully reviewed the allegation to decide the penalty amount which can be up to 10 per cent of the firm’s revenue generated. With more businesses relying on digital advertising we need a more neutral body who can measure, report & keep the system more transparent.”

Former CCI Chairman Dhanendra Kumar, who is also the first chairman of the competition commission set up in 2009, said, “The CCI should have collected more evidences and data from consumers and markets and conducted economic analysis before passing this order.”

Calling the order as split order, Kumar said: “The arguments given in the dissenting order are strong and more logical and need some answers.”

The dissent note in the 190-page order passed by the CCI against Google is of the view that the CCI has passed the order on basis of perception and not on evidence and that there is not a single evidence against Google stating that the company’s dominance position has adversely impacted the consumers.