India Could Rock Google With Its Biggest Antitrust Fine Yet -- $5B USD
March 10, 2014 8:12 PM
comment(s) - last by
Google has no chance to avoid fine merely by promising change, unlike in the EU, U.S.
In the U.S., Google Inc. (
) managed to
plead its case
successfully enough that the antitrust accusations regarding its search engine
only led to a small fine
. In Europe, regulators
forced it to make changes
, but it also
appears ready to escape without any major punitive fines
given its willingness to cooperate and tweak its more controversial strategies.
I. Five BILLION Dollars
But the American internet and mobile software giant isn't out of the woods yet. The world's largest search engine and mobile operating system maker's latest headache
The Competition Commission of India
(CCI), a government regulatory body of the southern Asian nation who is examining local and international complaints carefully.
[Image Source: LiveLaw.in]
The CCI says that a local matchmaking service claims it was damaged by
Google's anticompetitive tactics
The accusation is similar to that lofted against Google in past cases. The basic allegation is that Google -- which controls a majority of customer search traffic -- is overriding its own algorithms such that the best services are bumped down in the search results, making them less used and harder to find. Google in turn is said to give prominent positions to its own in-house offerings, locking customers (to an extent) in its profit loop (unless they want to go out of their way to dig into the pages of other results).
Google has come under increasing scrutiny in India after the local Muslim minority has noisily protested against the search engine
returning in the search results websites with insulting images of their Prophet Mohammed
. Some have demanded the search engine results be censored.
[Image Source: GlobalPost]
But the competition question has grown into a far more dangerous issue for Google in the region.
The Consumer Unity & Trust Society
-- aka, "CUTS International" -- also filed a similar complaint. While the efforts in Europe were
largely steered by Microsoft
), a major U.S. rival of Google, CUT Int'l is equally critical [
see this, for example
] to both companies. The UN and other global advocacy groups back it.
Indian law allows for very stiff antitrust penalties. Namely, it allows a maximum fine of 10 percent of a company's 3-year average profit. Google has brought in $49.3B USD in 3 years, so that indicates a maximum fine of nearly $5B USD.
While past settlements and negotiations suggest Google will be able to placate Indian officials, such a fine could set records previously held by the billions in fines by the EU
II. No Chance to Settle
India's Matrimony.com, says the case has some unique elements, though, which may make it more costly for Google. Comments the site's legal counsel Ferida Satarawala:
Google's unfair use of trademarks as well as its retaliatory conduct are not specifically addressed in the European settlement and are distinct theories of harm being pursued by the CCI. Therefore, this settlement is unlikely to address CCI's concerns in our case.
The complaint is current being looked into by India's
Director General of Foreign Trade
(DG). The DG is seeking input from other third parties (e.g. Microsoft) who might have a bone to pick with Google's tactics, as well. After that, the CCI will likely look to formally charge Google and pursue a fine.
Interestingly, authorities indicate Google will not be able to settle the complaints by promising to change. While it will face more fines for continuing offenses, the fines will be decided based on the court's analysis of what Google has already done. Also interesting is that the court has the power to break Google India up into "Structural Entities", forcing the company to abandon key portions of its Indian business.
Google, for its part, has long seemed resigned that it may be found eventually to have done something wrong. To that end it's set aside $750M USD in an antitrust settlement buffer, a cash reserve that thus far has remained mostly untapped.
A Google spokesperson said in a statement that they are "extending full co-operation" to the Indian authorities, pointing to past antitrust settlements.
The Financial Times
This article is over a month old, voting and posting comments is disabled
RE: OK. But People Should Still Just Think for Themselves
3/11/2014 11:13:45 AM
Actually I made a mistake myself. Just re-read my initial post - I said correlation and that is not what I wanted to say. The absolutely is a correlation in the data, but the two statements are unrelated, to be more simply put. There is no causal relationship between the statements.
“Then they pop up and say ‘Hello, surprise! Give us your money or we will shut you down!' Screw them. Seriously, screw them. You can quote me on that.” -- Newegg Chief Legal Officer Lee Cheng referencing patent trolls
EU Pleased With Google's Search Changes, May Settle Without Fines
February 5, 2014, 10:59 AM
FTC, Google Officially Settle Antitrust Investigation; Microsoft Cries Foul
January 4, 2013, 11:09 AM
FTC Frustrates Google With Delay in Antitrust Probe Ruling
December 19, 2012, 11:04 AM
Google Gets "Last Chance" to Settle With EU on Antitrust Abuses
May 21, 2012, 2:50 PM
U.S. Senators, Microsoft Accuse Google of Anticompetitive Tactics
September 23, 2011, 12:06 AM
Retiree Sues Apple For $7,500 for Wiping Honeymoon Photos From His iPhone
November 30, 2015, 10:23 AM
iPhone 7 May Pack 3-4 GB Memory, More Storage; 4-Inch Comeback is Rumored
November 20, 2015, 10:12 PM
OnePlus One, OnePlus 2 Will Receive Android Marshmallow in Q1 2016
November 16, 2015, 9:58 AM
Lenovo Whoa: Motorola Droid MAXX 2 and Turbo 2 Break Cover in Leaks
October 26, 2015, 3:12 PM
Leak: Apple Preps for First Real Android App Foray With New Apple Music App
October 24, 2015, 1:59 PM
Pepsi Smartphone? Empty Calories Coming Soon to the Midrange
October 12, 2015, 11:41 PM
Latest Blog Posts
Sceptre Airs 27", 120 Hz. 1080p Monitor/HDTV w/ 5 ms Response Time for $220
Dec 3, 2014, 10:32 PM
Costco Gives Employees Thanksgiving Off; Wal-Mart Leads "Black Thursday" Charge
Oct 29, 2014, 9:57 PM
"Bear Selfies" Fad Could Turn Deadly, Warn Nevada Wildlife Officials
Oct 28, 2014, 12:00 PM
The Surface Mini That Was Never Released Gets "Hands On" Treatment
Sep 26, 2014, 8:22 AM
ISIS Imposes Ban on Teaching Evolution in Iraq
Sep 17, 2014, 5:22 PM
More Blog Posts
Copyright 2016 DailyTech LLC. -
Terms, Conditions & Privacy Information