India’s competition watchdog on Jan. 7 ordered a probe into Alphabet Inc, the parent company of Google, over complaints that the company has allegedly “abused its dominant position” in news aggregation and imposed “unfair conditions” on news publishers.
“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,” the Competition Commission of India said in its order.
Google could not immediately comment on the matter.
The order came following a complaint from the Digital News Publishers Association (DNPA), which comprises the digital arms of some of India’s biggest media companies.
The DNPA claimed that “more than 50 percent of the total traffic on the news websites is routed through Google,” which is deemed the most dominant search engine that determines which news websites get discovered via search.
It also claimed that Google’s display of news item snippets reduces the number of visitors to news outlets, affecting the ad revenue “while Google continues to earn ad revenue on its result page.”
“It has also been averred that the terms of the agreements entered between the members of the informant [news publishers] and the Ops [Google and its subsidiaries] for sharing the advertisement revenues are unilaterally and arbitrarily dictated by the OPs, and the members of the informant have no other option but to accept the terms, as they are, with no bargaining power whatsoever,” the CCI said.
“The only alternative to the AMP system is for publishers to subscribe with Google, which benefits Google, to the detriment of the publishers,” it added.
The DNP alleged that news publishers were forced to use Google’s Accelerated Mobile Pages (AMP) format, which only affected their revenue, and accused Google of denying fair advertising revenue to its members.
“Google appears to operate as a gateway between various news publishers on the one hand and news readers on the other. Another alternative for the news publisher is to forgo the traffic generated by Google for them, which would be unfavorable to their revenue generation,” the CCI said.
In its order, the watchdog also mentioned new rules in France and Australia—fuelled by media lobbying and public pressure—that have led to worldwide licensing deals which collectively are worth billions of dollars.
The CCI has directed the Director-General to investigate the complaints issued against Google in accordance with Section 26(1) of the Competition Act and to complete the investigation within 60 days.
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