The genesis of the issue lies in a complaint filed by the Digital News Publishers Association (hereinafter known as the ‘informant’) under Section 19 (1) (a) of the Competition Act, 2002 (hereinafter known as the Act), the informants are a consortium of media outlets like NDTV, Time Group, ABP and Others. The informants have invested large sums of money to train and employ their fellows to report credible news. The complaint is filed against Alphabet Inc, a holding company of Google India Private Limited and Google Ireland Limited (hereinafter known as the Opposite Parties/OPs), alleging the OPs are abusing their dominant position under Section 4 of the Act.
Earlier, the newspaper was the primary source of news for the general public but since the advent of the internet, people have resorted to the internet for news and the demand for online news is only increasing. The primary revenue stream for thes was the advertisement, since the pandemic struck the news consumers have gradually shifted from traditional news to online and email newsletters and to generate revenue for news companies resort to digital advertisements on their respective websites. A report by KPMG India, A Year Off Script: Media and Entertainment Report, states the share of digital adverting in India from 2018 to 2020 has seen a substantial growth ranging from 19% to 31% whereas conventional advertising has seen a drastic downfall to 22 % from 32%, this data is cited to show how companies are abandoning conventional advertising mediums to online/digital media mediums. Google is one of the largest companies in the world which draws a majority of its revenue from online advertisements because of its large number of users which makes it perfect to host online advertisements. In the present complaint, the informant alleges that the OPs are a major stakeholder in the digital advertising market, and their renowned search engine is used by the majority of users including the mobile search engine platform. In the complaint the informants have stated as of September 2019, Aplphabet Inc’s revenue was USD 116 billion. Almost 84% of the said revenue was from advertising on the web and on their mobile search engines. Owing to Google’s vast wealth, presence in the market, and superior algorithms. It is the dominant search engine in the market. They control a majority of traffic as Google is consumers’ go-to search engine. In addition, Google has also made the Google search engine a default search engine on Apple devices and Android devices owing to those factors Google has a monopolistic position in the digital advertising space, which allows them to enjoy a dominant position. Abuse of dominant position by an entity can be decided only after narrowing down a relevant market, in this instant case the two relevant markets are, the search engine market in India and the online advertising market in India.
It has to be noted that Google not only enjoys a dominant position in India but also abroad. Google has a dominant position in the search engine market in India as well as the mobile search market. According to gs.statcounter.com, Google holds a market of 99.59% they reached this position by allowing websites to link their websites to Google, the terms and conditions of such arrangements were decided by the OPs by imposing unfair and opaque conditions on the listing websites. The aforementioned conditions are that the OPs do not show the data on the amount of revenue gained by the advertisements. Since Google’s market shares enable it to earn billions of dollars in revenues coupled with advanced algorithms, Google has created entry barriers that do not allow new and small-scale companies to enter the market and thereby asserting its dominance. Since Google enjoys its dominant position it has become a sole and necessary business partner in the search engine market and online advertising market, this allows them to unilaterally decide the amount to the publishers for the content. Google also takes it upon them to decide terms on which the amount is to be paid to the publishers. Google also takes it upon itself to pay a small sum of the revenue generated from the advertisements of the informant members’ websites and the basis of the calculation is not disclosed. The lack of transparency and imbalance in the market is achieved through unfair trading arrangements by the dominant entity in a market.
Another factor leading to an investigation by the Competition Commission of India is how the OPs are using their in-house aggregated news outlet called Google News. Google News is the OPs house news banner which provides snippets of the news authored by the Informants, while providing informant member’s content the OPs have not compensated the members, such action can be constructed as intellectual property violation and a violation of Section 4 (2) (e). The OPs do not produce their own content; They publish the informant member’s content under their banner which diverts all traffic and potential traffic from the informant member’s website to the OPs website. Reliance is placed on a case in the European Union, in Google and Alphabet v. Commission (Case T – 612/17) the Commission found that Google was abusing its dominant position in European Economic Area by favoring its own shopping services and held self-referencing is a form of abuse of dominant position, similarly, the action of displaying informant member’s news under Google News and promoting one’s own services can also be construed as an abuse of dominant position.
While the OPs maintain their dominant position, they control their algorithms and they are in a position to control what the consumers see, these actions are a detriment to the consumers and to the media companies. When the OPs launched Google News it was based on a steady growth on a concept called zero-click, which means a user’s queries have resolved on the page which is displayed first.
Another action of the OPs which is constructed to be an abuse of dominant position is with respect to Accelerated Mobile Pages (hereinafter known as AMP). AMP is a software writing platform created by Google. The OPs took it upon themselves to make unreasonable arrangements by forcing news publishers to build their websites using AMP format for their mobile websites, if the informant members failed to standardize their content, they would be losing out on an important advertising placement on Google’s mobile search. In addition, to force publishers, the OPs would restrict paywall options as a detriment. The OPs gave no choice to the publishers but to implement the AMP standard or lose placement in the mobile search space. Either way, the arrangement only benefited the OPs.
In the case of Google Search Bias (Case Nos. 07 and 30 of 2012 vide order dated 08.02.2018), the Competition Commission of India determined two relevant markets, the market for online general web search services in India and the market for online search advertising services in India and it was held Google is dominant in both the aforementioned markets. With the information available, the OPs have an upper hand in the market creating an unfair imbalance in both the markets. Since its establishment, Google maintains a dominant position in the online advertising space it is the online trading partner that has access to a vast number of users. The allegations of not being transparent about the revenue generated also hold ground and can be constructed as an abuse of dominant position. The author is of the view that the actions carried out by the OPs amount to an abuse of dominant position and the Commission are well within its right to order a licensing agreement where the OPs pay royalties to the news publishers to maintain balance and to do away with any unfair trade practices.