No room for Google-CCI talk as Modi, Pichai focus on Digital India

Business Standard, October 01, 2015

Prime Minister Narendra Modi and his team of officials had gone to the Google headquarters at Santa Clara County, California, prepared to talk on “abuse of dominant position” if the need arose, it is learnt.

While Modi and Google chief executive Sundar Pichai had a one-on-one meeting before addressing several hundred coders and engineers during a hackathon at Googleplex, the controversial issue of ‘anti-competitive conduct’ by the search major is believed to have been left untouched at the interactions.

Digital India was the flavour of the PM’s recent Silicon Valley visit and it remained so in his discussions with Pichai, too, a source said. Besides backing Modi’s digital campaign, Google wants to launch Wi-Fi hotspots at 500 railway stations across India.

A query sent to the Prime Minister’s Office on whether there were discussions around the Competition Commission of India (CCI) probe into allegations of ‘abuse of dominant position’ by Google at the time of Modi’s visit, remained unanswered. Google did not respond to specific queries sent by Business Standard, but a spokesperson said in a statement that the company was “currently reviewing the report from CCI’s ongoing investigation”. The Google spokesperson said, “We continue to work closely with the CCI and remain confident that we comply fully with India’s competition laws.”

India is not the only country where Google is facing investigation over its alleged anti-competitive conduct. The US, Russia, Canada, Brazil and the European Union are among the other geographies where the company has been under the scanner. The Google spokesperson however, said, “Regulators and courts around the world, including in the US, Germany, Taiwan, Egypt and Brazil, have looked into and found no concerns on many of the issues raised in this report.”

Even as the office of director-general at CCI came out with a report in March 2015 pointing at anti-competitive conduct by Google in India, the Commission’s final verdict is likely to take time. According to sources, the CCI order could come towards the end of 2016. It could impose a penalty of up to 10 per cent average of the company’s turnover for the past three years according to rules. In the case of Google, the highest penalty possible is around $6 billion, based on its revenue for 2014 at $66 billion. However, the CCI penalty usually does not exceed four or five per cent of the revenue, it is learnt.

The case dates back to 2012 when the CCI asked the office of the director-general to investigate the matter. The probe was ordered based on information received against Google from matrimonial site BharatMatrimony. Subsequently, an NGO – Consumer Unity & Trust Society (CUTS) – joined in against Google.

The investigation by the director-general’s office showed Google indulged in search bias by giving preferential treatment to its own products and services in display of results in response to search queries, a source in the government said. The probe also found restrictive conditions imposed in agreements for syndicate search and advertising services, thereby acting as entry barrier for competing providers. Non-transparent and manipulative bidding mechanism for display of advertisements on the search engine are among the other findings.

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