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CCI DG says Google abused dominant position: Win for SAM, work cut out for AZB, ELP [UPDATE-1]

Shardul Amarchand Mangaldas has won a favourable landmark report from the Competition Commission of India (CCI) director general for its client Bharat Matrinmony and an NGO against internet giant Google, which was represented by AZB & Partners and Economic Laws Practice (ELP), reported The Economic Times.

Shardul Amarchand represented Bharat Matrimony and APJ-SLG Law acted for Consumer Unity and Trust Society, which filed the original complaints against Google.

The CCI’s director general found that Google had abused its dominant position, favouring its own non-search businesses over that of rivals such as MakeMyTrip or MapMyIndia, while Flipkart alleged that the rank of its Google results “appear to have a correlation with the amount of money Flipkart spends on SEM (search engine marketing) advertising on Google”.

A total of 30 internet companies’ submitted responses to the CCI, according to the ET, though one of the world’s largest ad buyers, GroupM, reportedly responded that it had “not faced any problems” in its usage of Google services.

The ET reported that:

The commission’s report finds Google liable on two counts. First, Google’s proprietary content supersedes relevance of the search by an individual. This means, for example, even though Moneycontrol.com may have a higher hit rate for a stock market search in India, Google Finance links are given priority. Similarly, Google Hotels gets preference over other travel portals that may have higher traffic and therefore mathematically more appropriate as first results of a search.

The second is that the sponsored links thrown up after a search are dependent purely on the amount of advertising paid to Google, and sometimes even supersede the link of the actual trademarks being searched. Flipkart, in its observation, said it has found search results to have a direct correlation with the amount of money the ecommerce portal spends on Google advertising. A Flipkart spokesman declined comment on the company’s response.

Google must respond to the findings by 10 September, after which it will face the seven-member CCI in hearings, which could allow the anti-trust regulator to impose restrictions on Google’s business in India or fine it up to 10 per cent of its annual revenue of $66bn.

Update 1: The director general solicited comments from the following companies:

Internet companies

  • Microsoft
  • Yahoo
  • Rediff
  • Interactive Corp
  • Facebook
  • Octothorpe

Travel / maps

  • Makemytrip
  • Trip Advisor
  • Yatra
  • Cleartrip
  • Nokia / Here Maps
  • MapMyIndia

Other online

  • Flipkart
  • JustDial
  • Info Edge (runs Naukri and Simply Married)
  • Times Internet
  • Times Business Solutions
  • Network 18
  • Media2win

Ad agencies:

  • GroupM
  • Lintas
  • Madison
  • Contract Advertising
  • TLG India
  • Hungama Digital Solutions
  • Web Chutney
  • Facebook FCB ULKA
  • Rediffusion
  • Y&Rediff
  • Ogilvy & Mathers
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