CUTS files formal complaint against Google before CCI; Accuses Internet giant of indulging in anti-competitive practices

Bar & Bench News Network, June 14, 2012

Consumer rights activist, Consumer Unity & Trust Society (CUTS) has filed a formal complaint against search engine Google with the Competition Commission of India (CCI) on June 8, 2012. The complaint has been filed for violation of Sections 3 and 4 of the Competition Act, 2002, which deals with anti-competitive agreements and abuse of dominant position.

This is the second formal complaint filed against Google in the last few months. Recently, Indian matrimonial site, Bharat Matrimony had filed a formal complaint against Google with the CCI alleging that the search engine has abused its dominance by engaging in discriminatory and retaliatory practices relating to AdWords. Google is now being probed by CCI for the alleged discriminatory practice and the report is expected in next three to four months.

Speaking to Bar & Bench CUTS Associate Director Udai Mehta, without revealing further details of the complaint said, “In principle, we have brought out before the Commission the results of specific studies on this issue and how various contraventions are being committed. Also, we have brought to the Commission’s notice as to how various competition authorities in other jurisdictions have taken cognizance of such practices by Google which is affecting their economy”.

The complaint calls for the CCI to investigate whether Google has been using its market power in the search engine and online advertising market to “affect” the growth of the Indian search, advertising and related markets and to monitor acquisitions made by Google in India primarily to tackle competition, said CUTS in a Preliminary Information Report (PIL) submitted to the CCI.

Udai told Bar & Bench that, “Given the size of the Internet economy and its exponential growth trajectories, it is pertinent to look at the competitive market structure and its conducts overall and also the dynamics between small scale enterprises and large enterprises in India, in specific.

The Indian Internet economy represents approximately 5 percent of GDP, and it is projected to grow to approximately Rs.11 trillion by 2016. Had internet been a sector, it would have been the eighth largest sector in India, larger than mining and utilities.”

“Any unfair practice of Advertising Service Providers will have major repercussions on small scale customers who can create favorable conditions for market monopolization and possibilities of abuse”, added Udai.

According to CUTS, these practices are detrimental to the interests of the consumer as they intend to make the Indian Internet market less competitive and create illegal restrictions on the freedom of other market operators.

Udai told Bar & Bench that an immense amount of research was undertaken to provide the relevant data to CCI.

CUTS refused to provide the copy of the complaint since the matter is subject to scrutiny before the CCI.

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