Google could be fined up to $5 bn for misusing market dominance

Google, which is facing antitrust investigation in India by fair trade watchdog, the Competition Commission of India (CCI), can face a penalty of up to about $5 billion if it is found to have violated competition norms of the country.

Google said it is “extending full cooperation” to the CCI in its investigation. The conclusion of a two-year review by the US antitrust watchdog is that the company’s services were good for competition, it added.

The case has been before CCI as well for over two years now and it relates to allegations that Google is abusing its dominant position in the internet search engine space.

Under competition regulations, an entity found violating the norms could be slapped with penalty of up to 10 per cent of its three-year annual average turnover.

In the case of Google, its annual revenues in the last three years amounts to $49.3 billion and the maximum penalty can be up to nearly $5 billion.

When asked about the ongoing probe and the potential penalty of up to $5 billion, a Google spokesperson told PTI: “We are extending full co-operation to the Competition Commission of India in their investigation.      We’re pleased that the conclusion of the Federal Trade Commission’s two year review was that Google’s services are good for users and good for competition.”

While Google has settled anti-trust cases in the US and European Union, Indian competition regime does not have provisions for settlement process. Besides a complaint filed with CCI cannot be withdrawn.

Finding prima facie evidence of violations, CCI had referred the matter to its investigation arm — Director General (DG) — for a detailed probe. Sources said that the DG has also collected comments from third-parties with regard to this case and it is likely to soon submit its report to CCI.      The Director General could not be contacted for comments.

Apart from penalty, CCI is empowered to pass orders to correct a company's conduct in the market place. Also, the regulator can go for structural remedies that could see breaking up of dominant enterprises into separate businesses. The complaint against Google, also one of the world's most valued company, was first filed by advocacy group CUTS International way back in late 2011.

GOOGLE IN THE SOUP

• The case has been before CCI for over two years now and it relates to allegations that Google is abusing its dominant position in the internet search engine space
• Under competition regulations, an entity found violating the norms could be slapped with penalty of up to 10 per cent of its three-year annual average turnover