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Note on Order of CCI in the matter filed by DNPA Vs Google

Note on Order of CCI in the matter filed by DNPA Vs Google

  • Category: Media
  • Date 07-01-2022

CCI has passed an interim detailed order on 07th Jan 22, directing the Director General to conduct an Enquiry on the basis of complaint filed by DNPA alleging the abuse of dominance by google and submit the enquiry report to CCI within 60 Days of receipt of their order.

CCI has relied on the information provided by DNPA and did their own thorough research and observed as under:

• CCI noted that, the Commission is of the prima facie view that Google is dominant in both the relevant markets, i.e., market for online general web search services and market for online search advertising services in India.

• CCI noted that, based on the information available, it appears that the instant information highlights the bargaining power imbalance that flows from the position enjoyed by Google as a necessary trading partner for digital news publishers in accessing online audience as well as in generating digital ad revenue.

• The case also brings forth the issue of alleged lack of transparency and information asymmetry in the ad tech services provided by Google, which does not allow publishers to optimize the yield on their ad inventory.

• CCI has done in depth analysis of our submissions, and they have highlighted and even verified DNPA allegations against Google, the snapshots of the same are attached in the order itself.

• CCI noted that, it cannot be denied that by virtue of Google's position of strength of its vertically integrated ecosystem which covers not only the markets of Online General Web Search Services and Online Search Advertising Services but also the online digital advertising intermediation services, Google appears to be a preferred service provider to publishers wanting to offer search and advertising services on their websites. the Commission at this stage is prima facie satisfied that, based on the global presence of Google, as adumbrated supra, it can be reasonably inferred that Google occupies a significant position in the market for online digital advertising intermediation services, as well. The investigation would bring out these aspects in detail.

• CCI Noted that, it appears that news publishers are dependent on Google for the majority of the traffic, which makes Google an indispensable trading partner for news publishers. Another alternative for the news publisher is to forgo the traffic generated by Google for them, which would be unfavorable to their revenue generation. It is also noted that, the terms of the agreements entered between the members of the DNPA and Google for sharing the advertisement revenues are unilaterally and arbitrarily dictated by the OPs, and the DNPA members have no other option but to accept the terms, as they are, with no bargaining power whatsoever.

• CCI Noted that, In 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 condition on publishers.

• The opacity on critical aspects such as data and audience management practices, or generation and sharing of revenue with publishers, worsens the information asymmetry and is prima facie prejudicial to the interest of publishers, Thus, the imposition of such unfair conditions by Google in the provision of its various services is prima facie violation of Section 4(2)(a) of the Act.

• CCI noted that, It is also alleged that Google has unilaterally decided not to pay the publishers of news for the snippets used by them in search engine results. The issue of scraping and displaying news snippets and leads by Google on its search platform without compensating the content creators also assumes particular significance in view of the increasing zero-click searches.

• CCI Notes that, It needs to be examined whether the use of snippets by Google is a result of bargaining power imbalance between Google on the one hand and news publishers on the other, and whether it affects the referral traffic to news publisher websites, and thus, their monetization abilities.

• In a well-functioning democracy, the critical role played by news media cannot be undermined, and it needs to be ensured that digital gatekeeper firms do not abuse their dominant position to harm the competitive process of determining a fair distribution of revenue amongst all stakeholders. Therefore, the alleged conduct of Google appears to be an imposition of unfair conditions and price which, prima facie, is a violation of Section 4(2)(a) of the Act.

• Similarly, the alleged issue of publishers being forced to build mirror-image websites using the AMP format, with Google caching all articles and serving the content directly to mobile users, can have revenue implications for the publishers.

• As alleged, for AMP articles, Google restricts paywall options unless publishers rebuild their paywall options and their meters for AMP, which may amount to an unfair imposition on publishers. These aspects would be suitably examined during investigation.

• CCI also noted, In the present matter, it also needs to be examined whether Google imposes any discriminatory condition or price on various news publishers, which would violate Section 4(2)(a) of the Act. Such issues would also require a detailed assessment, which can only be done during investigation.

• On the basis of Pleadings and their own research CCI is of prima facie view that Google has violated the provisions of Section 4(2)(a) of the Act, which merits investigation.

• CCI also noted, 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.

• CCI also took note of the development in some countries such as France and Australia, as referred by the DNPA. CCI Noted, 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, 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.

• CCI Directed, the Director General (DG) to cause an investigation into the matter within a period of 60 days and submit the investigation to the CCI

• CCI also cleared that nothing stated in this order shall be tantamount to a final expression of opinion on the merits of the case, and the DG shall conduct the investigation without being swayed in any manner whatsoever by the observations made herein.

Relevant Section of CCI is elaborated as under:

Section 4

(1) No enterprise or group shall abuse its dominant position.

(2) There shall be an abuse of dominant position under sub-section if an enterprise or a group.

 (a) Directly or indirectly, imposes unfair or discriminatory

 (i) Condition in purchase or sale of goods or service or

 (ii) Price in purchase or sale (including predatory price) of goods or service.

 (b) Limits or restricts

 (i) Production of goods or provision of services or market therefor or

 (ii) Technical or scientific development relating to goods or services to the prejudice of consumers or

 (c) indulges in practice or practices resulting in denial of market access [in any manner] or

 (d) Makes conclusion of contracts subject to acceptance by other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts or

 (e) Uses its dominant position in one relevant market to enter into, or protect, other relevant market.

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