The Competition Commission of India (CCI) has ordered fresh investigations on tech giant Google for allegedly abusing its dominance in news aggregation, according to media reports.
This order follows allegations made against Google by the Digital News Publishers Association (DNPA), an industry body that primarily consists of legacy media houses operating into the digital media space.
According to the allegations made by the association, Google abuses its dominant position as an interface between users and publishing houses to unilaterally decide what percentage of ad revenues must go to publishers.
The association alleged that this has led to a large number of losses in advertising revenue for its members, in direct contravention of Section 4(2) of the Competition Act.
In its order, the CCI took the prima facie view that Google was indeed acting in violation of the provisions in the Act. Accordingly, it has ordered the Director General (DG) to conduct a probe into the matters and complete it within 60 days from the issuance of the same.
“At this stage, the Commission is satisfied that a prima facie case is made out against the alleged conduct of Google, which merits an investigation. Google would have sufficient opportunity to present its case during investigation,” said the order.
While Google may portray itself as a company that invests in many innovative and cutting-edge deep technologies, it still derives a majority of its revenue from digital advertising. In 2020, Google’s holding company Alphabet generated almost $183 Bn in revenue.
More than 80% ($147 Bn) came from Google’s advertising business according to Alphabet’s 2020 annual report. Allegations similar to the ones made by the DNPA were made against Google in the past in other countries.
“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,” said the CCI order.
Earlier last year, Australian lawmakers had passed a law that required digital platforms including Facebook and Google to pay local media outlets and publishers to link their content on news feeds and search results.
This came after similar protests from news publishers in the country. In fact, Google began striking deals with news publishers in Australia before the law came into effect.