CCI leaves Google searching for answers

CCI leaves Google searching for answers thumbnail
If you go to the Google search box and type “nuance”, the first result that shows up is “CCI Judgement on Google”. No, we just made that up.

The Competition Commission of India’s (CCI) landmark ruling enforcing a Rs 135.86-crore fine on Google for “search bias” and abusing its “dominant position” is one of the more finely considered judgements in the technology industry. According to Sunil Abraham, executive director of Bengaluru-based research organisation, the Centre for Internet and Society, “CCI is returning to the roots of the competition law, where it is as important to prevent concentration of power as it is to look at how pricing affects people. The emphasis here is now also on protecting innovation and competition itself.”

To begin with, according to the CCI, the rules of engagement are different for early-stage markets and mature markets.

CCI has differentiated between early-stage markets and mature markets. In an earlier judgement when two radio cab operators, FastTrack and Meru, had accused Ola of offering discounts and predatory pricing, the CCI had ruled in favour of Ola. CCI had said a lack of market maturity in the cab-hailing space was central to its decision. “At this stage, it is difficult to determine with certainty the long-term impact of this pricing strategy, as the market is yet to mature,” the CCI had ruled.

The search market is different. Google is the 800-pound gorilla and pretty much the entire zoo in this market. The Google judgement, according to a lawyer who chose to remain off the record, “is based on the principle that a higher degree of responsibility is cast on Google because it has a dominant position in the market”.

The nub of the argument is that Google, by the showcasing of flights in its search page, has used its role as a gateway to offer a specific service.
As the judgement notes: “Google is leveraging its strong position in various online search markets to enter into and enhance its position in ancillary markets. Not only does that cause direct harm to competitors in vertical markets, it also causes direct harm to other website owners, since their websites are moved down on SERP [search engine results page] and hence, they receive less clicks as a result of lessened traffic. Further, this also harms consumers as they no longer receive the most relevant results at the top of SERP.”

But why should the consumers care? After all they are getting the cheapest price.



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