“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, “ Competition Commission of India said in its order.
The association has alleged that Google had ‘abused’ its dominant position in news aggregation leading to advertising losses for publishers, to the extent that they receive only 51% of the advertising spend.
The Commission said it needs to be examined whether the use of snippets by Google is a result of bargaining power imbalance between Google and the news publishers on the other, and whether it affects the referral traffic to news publisher websites, and thus, their monetization abilities.
The CCI directed the director general to probe the allegations levelled by the Association and complete and submit the investigation report within 60 days from the date of the receipt of the order.
Google is already facing a probe by CCI into its play store policy for levying significant commission on app developers.
“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,” it said.
The probe will look into the alleged violations of Section 4(2)(a), Section 4(2)(b)(ii), 4(2)(c), Section 26(1) of the Act.
“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..,” it said.
Based on the information available, it appears that the instant information highlights the alleged bargaining power imbalance that flows from the alleged position enjoyed by Google as a necessary trading partner for digital news publishers in accessing online audiences as well as in generating digital ad revenue, the CCI said.
“…the case also brings forth the issue of alleged lack of transparency and information asymmetry in the ad tech services provided by Google, which does not allow publishers to optimise the yield on their ad inventory,” it observed.
The Commission in its order said it is of the prima facie view that Google is dominant in both the relevant markets, that is, market for online general web search services and market for online search for advertising services in India.
The investigation by the DG would be able to examine the issues in a comprehensive manner by giving an opportunity to all concerned to present their case, it added.
The Commission also took note of the developments in some countries such as France and Australia, as referred by the Association, 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.
Google did not immediately respond to a request for comment.
The complainant, Digital News Publishers Association, has alleged Google denied fair advertising revenue to its members.
It has submitted that 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.
Google not only has a monopolistic position in search in India, it also has a very strong position in advertising intermediation and controls/retains the major share at each level, the Association said in its submission to the CCI.