March 10, 2014
India May Enforce $5 Billion Antitrust Fine On Google
Peter Suciu for redOrbit.com - Your Universe Online
Google’s antitrust woes are not over. On Monday it was reported that the Mountain View, Calif.-based tech giant now faces a fine of up to $5 billion in India, and could be forced to change its business practices in the Asian nation.
ZDNet reported that the Competition Commission of India (CCI) accused Google of abusing its market position in the world’s second-largest nation by population.
India started its antitrust investigation against Google in 2012 after the CCI received complaints from the advocacy group CUTS International as well as a local matrimony website. The case has been before the CCI for more than two years and it reportedly relates to allegations that Google abused its dominant position in the Internet search market.
TechCrunch reported on Monday that a Google India spokesperson said that the company was cooperating with the CCI in its investigation.
Under competition regulations in India, an entity that is found to be violating the norms could be hit with a fine of up to 10 percent of its three-year annual average turnover. In the case of Google, its annual revenues in India for the last three years amounted o $49.3 billion, so the maximum penalty could be nearly $5 billion.
“We are extending full co-operation to the Competition Commission of India in their investigation,” a Google spokesperson was quoted as saying in the Times of India on Monday. “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.”
In addition to the complaints from the CUTS International, matrimonial website Matrimony.com also filed a complaint.
“Google's unfair use of trademarks as well as its retaliatory conduct are not specifically addressed in the European settlement and are distinct theories of harm being pursued by the CCI,” Matrimony.com counsel Ferida Satarawla told the Times of India. “Therefore, this settlement is unlikely to address CCI's concerns in our case.”
Google’s alleged antitrust violations have been far reaching.
Google recently settled a decade-long antitrust investigation with the European Commission to resolve a case in Europe, after the EC’s chief antitrust official said last summer that the search giant hadn’t modified its search and advertising practices enough to resolve concerns that it was unfairly stifling competition. As of last summer Google maintained about 90 percent of the European market for Internet search. In February Google was able to settle the case with EC and avoided a potential penalty of around $5 billion.
In October Brazil’s federal antitrust court (Cade) began its own investigation of anti-competitive practices by Google – as well as Microsoft. The case involved a pair of Brazilian comparison shopping sites.
While Google was able to settle anti-trust cases in the United States and the European Union, Indian competition regime does not reportedly have such provisions for a settlement process. The Times of India reported that once a complaint has been filed with the CCI it cannot be withdrawn, and finding prima facie evidence of violations, the CCI had since referred this matter to its investigation arm, the Director General (DG), for a detailed probe of the complaint.
The DG had reportedly collected comments from third-parties in regard to this particular case, and is likely to soon submit a full report to the CCI. The DG did not respond to requests for comment.
In addition to a penalty, the CCI is empowered to pass orders to correct a company’s conduct in the Indian marketplace, and this could include breaking up dominant enterprises into separate businesses.
In other words Google could face much more than a hefty fine in the subcontinent.