'Google's Conditions On Digital News Publishers Prima Facie Unfair, Abuse Of Dominant Position' : CCI Orders Probe

Allegations raised by the Informant

The primary allegation raised by the informant is that more than 50% of the total traffic on the new websites is routed through Google, and it being the dominant player determines which news website would get discovered. Though the content is produced by news media companies, online search engines, like Google, end up leveraging a sizeable portion of the revenue and the publisher pockets only 51% of the advertisement spent by the advertisers. The informant had further alleged that Google is the major stakeholder in the digital advertising space and unilaterally decided the amount to be paid to the publishers and the manner in which it is to be paid. The informant delineated four relevant markets - (i) market for online search advertisement services in India, (ii) market for online general web search services in India, (iii) market for publishing of news content in Indian and (iv) market for online advertisement in India, and submitted that globally as well as in India, Google has substantial market share in all these relevant markets. Therefore, it is contended that Google enjoys a dominant position in terms of Section 19(4)of the Act.

Violation of Section 4(2)(a)(i)

The informants alleged that while allowing website links of publishers on their search engine, Google imposes direct/indirect unfair conditions on them. The publishers are not made aware of the revenue earned by Google from the advertisements on their websites. The revenue shared by Google with the publishers is done arbitrarily and unilaterally. Thus, it concluded that dominant position is being used by Google to impose arbitrary conditions on the publishers in violation of Section 4(2)(a)(i).

Violation of Section 4(2)(b)(ii)

It was alleged that Google's unfair practices have discouraged innovation and technical development of services provided by the publishers, which are detrimental to the interest of the consumer as well as the journalism industry.

Violation of Section 4(2)(c)

It was averred by the informant that by using its dominant position Google had restricted the publishers access to the digital advertising space. Further, the unilateral and unfair practices adopted in sharing of revenue had forced the publishers to suffer losses.

Violation of Section 4(2)(e)

The informant argued that though Google has now entered the news aggregation genre, it does not produce its own news. Its growth is attributable to the use of its dominant position in the relevant markets as they use advanced algorithmic tools to cater tailor-made news as per the viewing history of each consumer. The techniques adopted by Google have made publishers loose out on traffic. Google forces publishers to implement Accelerated Mobile Pages ("AMP"), which leads to reduced traffic. The only alternative to AMP is to subscribe with Google, which would benefit it at the detriment of the publishers.

Analysis of the Commission

The Commission noted that in Google Search Bias case it had already held that Google is dominant in the market for online general web search services and market for online search advertising services in India. It was observed by the Commission that as per data available on www.satista.com, Google's market share ranged from 98% to 99% in the mobile search engine market between April, 2019 and July, 2021. The entry barriers to the relevant markets were noted by the Commission. Significant investment was required to be made by new entrants to develop sophisticated algorithms or to reach the required scale of search queries. It was noted by the Commission that the discoverability for news publishers also appeared to be dependent on search results from Google which indicated that the selling of advertisement spaces on the publisher's website was also dependent on the traffic generated by Google. Therefore, the Commission was of prima facie view that Google is dominant in the market for online general web search services and market for online search advertising services in India. The lack of transparency in the ad tech services provided by Google was acknowledged by the Commission. It noted that Google indeed imposes unfair conditions on the publishers and provides revenue share in an arbitrary manner. While dealing with the allegation that Google enjoys monopoly in online advertising intermediation services, the Commission perused international reports to reach the conclusion that, prima facie, Google occupies a significant position in the market for online digital advertising intermediaries service as well. As publishers are dependent on Google for the majority of the traffic they are left with no choice but to accept the one-sided conditions imposed by Google.

The Commission was of the opinion that the unfair conditions, as well as the price imposed by Google in the provision of its services, is prima facie in violation of Section 4(2)(a) of the Act. Moreover, it was noted that though Google does not pay the publishers for the snippets used by it on its search engine, it itself earns revenue from the same. The Commission observed that the conduct of Google was in violation of Section 4(2)(a), 4(2)(b)(ii) and 4(2)(c) of the Act. The Commission further noted that it appears that Google uses its dominant position in the relevant markets to enter/protect its position in the market for news aggregation services in violation of Section 4(2)(e) of the Act.

"Based on the above, the Commission is of prima facie view that Google has violated the provisions of Section 4(2)(a) of the Act, which merits investigation. Further, the Informant has also alleged that abovementioned conduct of Google results in violation of the provisions of Section 4(2)(b)(ii) as well as Section 4(2)(c) of the Act. The DG can appropriately examine these allegations as well during investigation.

Further, it appears that Google is using its dominant position in the relevant markets to enter/protect its position in the market for news aggregation services in violation of Section 4(2)(e) of the Act, which again merits detailed investigation.

The Commission also takes note of the development in some countries such as France and Australia, as referred by the Informant, that Google has been asked to enter into fair/ good faith negotiation with news publishers for paid licensing of content to address the bargaining power imbalance between the two and the resultant imposition of unfair conditions by Google. No doubt, Google, being the gateway, generates substantial traffic for news publishers, but at the same time, the bargaining power imbalance and denial of fair share in the advertising revenue, as alleged by the Informant, merit detailed investigation for the reasons detailed supra. The investigation by the DG would be able to examine the issues in a comprehensive manner by giving an opportunity to all concerned to present their case."

It held that a prima facie case had been made out against Google and directed further investigation by the Director General under the provision of Section 26(1) of the Act. The investigation is to be completed and a report is to be submitted to the Commission within 60 days of the date of receipt of order.

[Case Title: Digital News Publishers Association v. Alphabet Inc. And Ors., Case No. 41 of 2021]