Why is Google facing probe in India over abuse of dominant position?

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Antitrust body Competition Commission of India (CCI) ordered a probe against Google last week for abuse of dominant position in determining a fair revenue distribution. CCI said that news media play a critical role in a well-functioning democracy and it is important to ensure that the digital gatekeeper firms do not abuse their position to harm the “competitive process of determining a fair distribution of revenue amongst all stakeholders.”

The fair trade regulator ordered a probe on a complaint filed by the Digital News Publishers Association, a private body that aims to secure the interest of digital news publishers. The association alleged that its members have to suffer a loss of advertising revenues despite working and generating credible news.

What’s the issue?

The majority of the traffic on news websites comes from online search engines, the association said, and Google, being the most dominant search engine and a major stakeholder in the digital advertising space, unilaterally decides the amount to be paid to the publishers. Google algorithm decides which news website gets more traffic through its search engine.

The CCI noted that the display of news snippets doesn’t guarantee users clicking on it to enter the news websites, limiting the ad revenue earning potential of publishers. On the other hand, Google would continue to earn ad revenue on its results page while also enriching its search algorithm resulting from the volume of search queries.

“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,” the Commission said.

This is not the first time questions have been raised on Google’s use of news snippets and the inability of publishers to bargain a fair share in the value chain of news dissemination.

In 2020, the Australian government proposed News Media Bargaining Code to address bargaining power imbalances between Australia’s news media businesses and two Big Techs – Google and Facebook. Australia’s competition watchdog said in a report that Google and Facebook are more than mere distributors or pure intermediaries in the supply of news.

Google, initially warning to pull of search engine from Down Under, reluctantly caved in and struck deals with publishers to pay for journalism. France also asked Google to enter into a good-faith negotiation with news publishers for paid licensing of content to address the bargaining power imbalance.

The CCI has directed its investigation arm, the director-general (DG), to probe and submit the investigation report within 60 days.

It added 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”.

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