Fair trade regulator CCI on Friday ordered a probe against Google for its alleged abuse of dominant position.
"In a well-functioning democracy, the critical role played by news media cannot be undermined, and it needs to be ensured that digital gatekeeper firms do not abuse their dominant position to harm the competitive process of determining a fair distribution of revenue amongst all stakeholders," CCI said.
It added that the Commission is of prima facie view that Google has violated provisions of Section 4 of the Competition Act, 2002 which pertains to abuse of dominant position.
The order came on a complaint filed by the Digital News Publishers Association, which is a private company that promotes and secures interest of digital news publishers.
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It had filed complaint against Alphabet Inc, Google LLC, Google India Private Ltd and Google Ireland Ltd.
The association said that the majority of the traffic on news websites comes from online search engines and Google is claimed to be the most dominant search engine.
It said that more than 50 per cent of the total traffic on the news websites is routed through Google and being the dominant player, Google, by way of its algorithms, determines which news website gets discovered via search.
Besides, Google is the major stakeholder in the digital advertising space and it unilaterally decides the amount to be paid to the publishers for the content created by them, as well as the terms on which the aforesaid amounts have to be paid.
It further said that the members of the association have to suffer a loss of advertising revenues and the inability to bargain a fair share in the value chain of news dissemination, despite working and generating credible news.
It said that there is lack of transparency in online digital advertising intermediation services, which makes it difficult for publishers to audit and verify the ad revenue generated on their websites.
"No doubt, Google, being the gateway, generates substantial traffic for news publishers, but at the same time, the bargaining power imbalance and denial of fair share in the advertising revenue, as alleged by the Informant, merit detailed investigation," the Commission said.
As per the regulator, it needs to be examined if Google imposes any discriminatory condition or price on various news publishers.
Google has unilaterally decided not to pay the publishers of news for the snippets used by them in search engine results.
It needs to be examined whether the use of news snippets by Google is a result of bargaining power imbalance between Google on the one hand and news publishers on the other, and whether it affects the referral traffic to news publisher websites, and thus, their monetization abilities.
In France and Australia, Google has been asked to enter into 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, CCI noted.
The regulator has directed its investigation arm, the director-general (DG), to cause an investigation into the matter and submit the investigation report within 60 days.
It added that "nothing stated in this order shall be tantamount to a final expression of opinion on the merits of the case, and the DG shall conduct the investigation without being swayed in any manner whatsoever by the observations made herein".
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