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Google accused of abusing market position in India

Google has until 10 September 2015 to respond to the findings of an Indian Competition Commission investigation into allegations of anti-competitive business practices

The Indian Competition Commission has accused Google of abusing its dominant position in search advertising in the country.

The move comes after a three-year investigation prompted by complaints by several websites which claim Google is abusing its position to promote its own services.

India’s competition authorities are also concerned about Google’s use of sponsored links, which appear above more relevant links at the top of a search results page.

Complainants reportedly include Microsoft, Facebook and Indian online retailer Flipkart.

Google has faced similar allegations in the US and Europe. While US regulators ruled in 2013 that Google did not have to make any further changes to its practices, the case brought by the European Commission (EC) is still open.

The search company has until 10 September 2015 to respond to the findings of the Indian Competition Commission, but said in a statement it is “confident” that its business practices are compliant with India’s competition laws.

The EC begun an investigation into Google’s business practices in November 2010, notifying the company in March 2013 of concerns that the US firm had abused its dominance of the search market

In April 2015, European Union (EU) competition commissioner Margrethe Vestager gave Google 10 weeks to respond to allegations that the search firm systematically favoured its own comparison shopping product in general search results pages.

Vestager said she was concerned Google had given an unfair advantage to its own service and competitors, such as comparison sites TripAdvisor and Yelp, could be squeezed out by Google’s dominance.

Vestager’s deadline of 24 June 2015 was first extended to 17 August and then to the end of August at Google’s request. In the response filed just a few days ahead of the deadline, Google strongly denied abusing its dominant market position.

In Google’s 150-page response, the company denied breaking EU competition laws and said the EC’s allegations were “incorrect” and “unfounded”.

Kent Walker, senior vice-president and general counsel at Google, said in a blog post that the response presents web traffic analysis to rebut claims that Google’s ad displays and specialised organic results harmed competition by preventing shopping aggregators from reaching consumers. 

“Economic data spanning more than a decade, an array of documents and statements from complainants all confirm that product search is robustly competitive,” he said.

Walker said the EC’s preliminary conclusions were “wrong as a matter of fact, law and economics”, adding: “We look forward to discussing our response and supporting evidence with the European Commission, in the interest of promoting user choice and open competition.”

EC officials will examine Google’s response and decide whether it has broken the law. If it fails to convince the EC, Google could face huge fines of up to 10% of its worldwide turnover, which was $6.6bn in 2014.

Vestager is expected to rule on Google’s anti-trust charges by late 2015 or early in 2016.

In addition to the EC investigation, Google may also have to face a series of civil lawsuits that claim the company abused its market dominance to favour its own services, reports the New York Times.

International law firm Hausfeld and European public affairs company Avisa are expected to announce they have created an online platform to help companies sue Google for financial damages in European courts.

Hausfeld and Avisa reportedly plan to offer information to prospective clients about the EC’s investigation into Google.

“So far, the focus has been on public enforcement,” said Laurent Geelhand, managing partner at Hausfeld. “But what’s still missing is how this has financially affected the victims.”

In the US, there is a long tradition of companies seeking civil damages for anti-competitive practices, but such cases are still relatively new in the EU.

“As the European Commission moves towards making its anti-trust decision, it’s time to start building civil cases,” Geelhand said. “We’ll be ready to move quickly when that decision finally arrives.”

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