Google to Face Antitrust Probe in India [WSJ]

Google is being accused of cutting down local rival's ads to promote its own Helpouts

By on May 14th, 2014 12:15 GMT

Google is soon going to face a new antitrust case, this time in India. After similar troubles in the United States and several European countries, the time has come for India to order a new probe into Google.

The Wall Street Journal reports that the Competition Commission of India has been looking into Google for a couple of years, focusing on the alleged anticompetitive practices of AdWords, its online advertisement service.

This time around, the complaint against Google comes from a local businessman, Vishal Gupta, who owns a group of remote technology support service firms. According to the complaint, Gupta paid Google $310,000 (€226,000) for ads, but they were later terminated under the accusation of user safety policy violation.

Basically, the case will revolve around this “user safety policy” that Gupta claims to be very vague and unclear and to leave room for abuse of dominance by Google. Furthermore, he doesn’t believe that things had anything to do with Google’s rules, but rather with the fact that Google launched Helpouts, a tool that resembles the one offered by his company.

His hunch is that Google cut out his ads in order to give Helpouts more room in the spotlight and to gain more customers. The idea in itself has some credit, but in the grand scheme of things, it’s unlikely that Google, a global company of such size, would take down the ads of a local Indian company to improve its own chances.

The commission, however, agrees that a probe must be launched into the situation to determine the nature and extent of the problems that have prompted Google to take action against Gupta’s company.

“Google’s practices prima facie stem, to a large degree, from its undisputable dominance in the online search market. Therefore, Google’s practices towards AdWords customers such as the (remote technology support) firms in this case, needs to be investigated,” said the Commission.

Google is passable of a penalty of 10 percent of the average revenue of the preceding three financial years, which means that the company could end up paying billions of dollars.

The Internet giant has expressed its openness to discussion on this topic and said that it would fully cooperate on the probe. “We’re always happy to answer question about our business, and we’re confident that our products are compliant with competition law in India,” Google said on the topic.

It’s probably going to be a long while before the case is settled, but chances are slim that Google will actually get slammed with a fine in this particular case.

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