Business of Google

India’s antitrust regulator, the Competition Commission of India (CCI), has found search engine giant Google abusing its dominant position in the country. After a thorough investigation and subsequent hearings, the CCI imposed a Rs 136-crore penalty on Google. It also advised the multinational giant: “Google, being the gateway to the Internet for a vast majority of Internet users due to its dominance in the online web search market, is under an obligation to discharge its special responsibility”. Indeed, corporate giants like Google, with easy access to personal and professional information of billions of individuals, cannot afford to be driven solely by profit. Google is a curator of all kinds of private data across the globe; hence it has to act responsibly and must be seen as above suspicion.  

 This is not the first case of penalty on Google for misusing its dominant position. Eight months ago, European Commissioner for Competition Margrethe Vestager had fined it a whopping Euro 2.42 billion for similar reasons. Apparently, it was unfairly favouring some of its own services over those of its rivals, particularly its shopping services at the top of web searches. Like CCI, Vestager also gave a sermon to the company that dominant companies had a “special responsibility” not to undermine competition. She said Google was fined because it didn’t live up to that responsibility. However, in comparison to the European Commission, the penalty imposed by the Indian regulator is insignificant. But, not without a message to domestic and multinational corporate giants — play by the book.

Google has escaped with a paltry penalty of $21 million in India compared to the $2.7 billion fine by the European Commission because of policy loopholes. The CCI levied a fine equal to 5 per cent of Google’s three-year average revenue generated in India. Despite astronomically high global revenues, the company apparently presented only “direct sales” figures to the CCI without disclosing revenue earned indirectly through India. This also “dismayed” the regulator. The government needs to frame an accounting policy so that indirect revenue generated through India by such global e-tailers could also be computed and taxed.