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Competition Commission of India Orders Fresh Probe on Google AdWords

Competition Commission of India Orders Fresh Probe on Google AdWords

By Press Trust of India | Updated: 14 May 2014 10:24 IST

The Competition Commission has ordered a fresh probe against Internet major Google for alleged abuse of its dominant position in the online search advertising space.

The fair trade watchdog is already probing the Internet major for alleged anti-competitive business practices.

The latest order came on a complaint by one Vishal Gupta against Google Inc, Google Ireland Ltd and Google India Pvt Ltd alleging that Google AdWords accounts are extremely "opaque and not transparent."

The Competition Commission of India (CCI) also directed its Director General (DG) to investigate the role, if any, of persons who were in charge of, and were responsible to the companies for the conduct of their businesses, after giving due opportunity of hearing to such persons.

The AdWords programme, which allows Google to sell keywords to advertisers and display them in the form of short ads online, is a big money spinner for the company.

In an order released on Wednesday, the Commission said that "Google's practices prima facie stem, to a large degree, from its undisputable dominance in the online search market."

(Also see: Google faces up to Rs. 30,000 crore fine in India)

"Therefore, Google's practices towards AdWords customers such as the RTS (remote technology support) firms in this case, need to be investigated," the watchdog added.

The order dated April 15 was released on Wednesdayp. In September 2012, the complainant's group of companies had resolved to set up an RTS business and an AdWords account was opened and activated on January 2013.

The complainant had alleged that several remote tech support companies, including his firm, had been suspended from the AdWords programme to promote Google's own activities in an unfair, discriminatory and uncompetitive manner.

According to the CCI, the investigation is required to determine the nature and extent of problems that prompted Google to take actions against the RTS industry and whether or not the termination of the AdWords account was legitimate.

The complainant had stated that the bidding process of Google AdWords is opaque.

According to the complaint, Google had a 'user safety policy' which is extremely vague and unclear, giving rise to abuse of dominance by the Internet company.

By abusing its dominant position to limit or restrict the number of remote tech support companies, Google had caused prejudice to consumers, it has been alleged.

Further, the complainant alleges that Google and its group companies had caused trade barriers to help and assist its own programme 'Google Helpout' and other associate companies.

"The investigation also needs to determine if Google could have taken less-damaging courses of action such as filtering out fraudulent firms and maintaining contracts with firms that have been operating genuinely for long periods of time," the CCI added.

Gupta, his family and associates own and manage Shyam Garment Group of Companies. It includes Shyam Garment Pvt Ltd (SGL) and Delhi Call Centre Pvt Ltd -both set up in India - and Audney, which is incorporated in the US.

The CCI is already probing allegations that Google abused its dominant position in the Internet search space.

Related to this case, the Commission had recently slapped a Rs. 1 crore penalty on Google for failing to provide information related to the investigation.

(Also see: Google fined Rs. 1 crore by Competition Commission of India)

The complaint against Google, one of the world's most valued companies, was first filed by advocacy group CUTS International in late 2011. Later, matrimonial website matrimony.com Private Ltd also filed a complaint.

In its 2013 annual report filed with US regulator SEC in February, Google referred to the anti-trust cases in India and other jurisdictions.

"The Comision Nacional de Defensa de la Competencia in Argentina, the Competition Commission of India, the Taiwan Fair Trade Commission, Brazil's Council for Economic Defense and the Canadian Competition Bureau have also opened investigations into certain of our business practices," the filing had said.

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