Searches that mislead: Lessons from CCI's order against Google

The Competition Commission of India has imposed a fine of Rs 1.36 billion on Google after finding that the Internet giant exhibited a “search bias” by displaying search results in a fashion harmful to competitors and, indirectly, to users, thereby  abusing its dominant market position. The CCI issued this ruling in a 190-page judgment after completing a five-year investigation of multiple complaints. The first complaints were made in 2012 by Bharat Matrimony.com and Consumer Unity Trust Society (CUTS). These were followed by complaints from many other companies. The CCI found Google guilty on three counts of abusing dominance while clearing it of nine other charges.

The fine imposed amounts to 5 per cent of the average revenue generated in India by Google and its subsidiaries between 2012 and 2015. However, the CCI redacted the market-sensitive data upon which it based its conclusions. Google has 60 days to pay the fine and address the issues. It could also appeal against the order. This is not the first case of its kind. In 2017, the European Union had fined Google €2.7 billion and another anti-trust case was settled out of court in Russia for an undisclosed sum.

Google arguably performs a public service by providing a search engine platform that aggregates data freely accessed by users. But that platform is also a marketplace, where businesses bid for keywords and compete to place ads. But regulating digital advertisements and search-related marketplaces through laws and principles that govern more conventional businesses is difficult. What makes the job harder still is that Google is overwhelmingly dominant, both globally and in India, with respect to these two functions. Moreover, Google is itself a service provider; it offers a basket of services (and also partners with specific businesses) similar to those offered by its clients. To be sure, dominance in itself cannot be the cause for imposing penalties; more so, given a lack of entry barriers. But the dominance of a search engine can be used to prioritise the display of services, as, the CCI claims, did happen.

It is perfectly acceptable for a mall or a store to display in-house brands more prominently. But the analogy to physical marketplaces breaks down due to dominance. No mall chain has anything approaching Google’s monopolistic market share. There is no physical analogy for the keyword concept: Businesses bid to be displayed prominently whenever popular search terms, trademarked names and phrases are entered in Google search. This sparked off the initial complaint by Bharat Matrimony.com, which claimed that its rival, Shaadi.com, was more prominently displayed, even when “Bharat Matrimony” was searched. The CCI actually tossed out that complaint, saying Google's auction policy for keywords was good for users.

Still, there are several points to ponder. One is the time factor. Five years equals several generations in the life of the cyberspace start-ups that allege Google’s actions caused harm. Second, Google remains a de facto monopoly. Clients and users alike cannot walk away. The CCI must fine-tune its mechanisms to provide a level playing field, given the lack of alternative platforms. It will also have to accelerate its investigative processes in such cases.