August 24, 2011

CUTS has filed a Preliminary Information Report (PIR) with the Competition Commission of India (CCI) urging the agency to investigate the potential anticompetitive conduct of Google in the Indian internet, e-commerce market, online advertising and related markets.

Google is the largest search engine in the world as also in India. Most users of the internet in India, now numbering about 100 million ,are regular users of Google. The Indian internet market, search and advertising, is potentially the largest market in the world.

The basic concern of CUTS is that Google does not use its dominance in the search engine/online advertising markets to affect the growth of Indian search and advertising markets as well as related fast growing e-commerce markets like online shopping and online travel sites. In addition that Google does not undertake anticompetitive mergers which harm the growth of Indian e-commerce or online advertising.

Google is currently under investigation in several jurisdictions around the world including the USA (by the Federal Trade Commission), the EU (by the European Commission) and the Attorney General of the State of Texas and some others, all of which have inspired the present CUTS PIR.

The complaint against Google in the EU was brought by service search providers alleging unfavourable treatment of their services in Google’s unpaid and sponsored search results along with preferential placement of Google’s own services. Whether Google lowered the page placement of unpaid results of services with which it competes , such as price comparison or specialised search and placed its own services higher to shut out competition is under investigation.

The online search and advertising industry in India is growing at a very high rate. Last year all of the e-commerce market in India was about $5 billion. It is estimated that this will grow to $40 billion by 2015. Non travel e-commerce alone is expected to grow to a $30 billion industry in 4-5 years. Worldwide, Google has been widely criticised by online travel sites (like Expedia, Kayak) and local business review sites. They claim that Google promotes links to its own services such as local business information depriving their sites of potential traffic.