The Competition Commission of India (CCI) Friday initiated an antitrust inquiry into Alphabet Inc.’s alleged abuse of market dominance in news aggregation services. The inquiry was initiated by the antitrust regulator under Section 26(1) of India’s Competition Act in response to a complaint filed by the Digital News Publishers Association (DNPA) alleging that Alphabet Inc.’s search engine provider Google is the largest source of online traffic for news website, accounting for more than 50% of such online traffic.
The complaint claimed that since Google enjoys a dominant position in the news aggregation service market, the engine’s algorithms determine which news websites are discoverable through search. This results in a bargaining imbalance as while news publishers create the context for users to interface with the search engine, it is Google which leverages revenue or returns much more than publishers.
On the issue of Google’s dominance in the digital advertising market sphere, the DNPA argued that the tech giant “unilaterally decides the amount to be paid to the publishers for the content created by them, as well as the terms on which the aforesaid amounts have to be paid.”
DNPA further alleged in its complaint that Google has not demonstrated any transparency with respect to data pertaining to the amount of revenue earned by Alphabet Inc. through the advertisements it provides on the websites of news publishers. With regard to the sharing and distribution of such revenue between news publishers and Alphabet Inc., DNPA argued that such absence of transparency also extends to the basis of calculation of revenue generated from advertisements.
The antitrust regulator was prima facie satisfied that Google’s actions in the present case constituted a Section 4 violation, noting in its order which initiated the antitrust inquiry that:
[I]n view of Google’s market position in the online digital advertising intermediation services, the alleged unilateral and non-transparent determination and sharing of ad revenues appears to be an imposition of unfair conditions on publishers.
Alphabet Inc.’s Google has faced sustained regulatory scrutiny from the CCI in recent months on the billing policy for its proprietary Play Store app-hosting service. The antitrust regulator is expected to conclude its investigation within 60 days from the date of the initiation of such inquiry. Google is yet to respond to this decision.
