Competition Commission of India (CCI): On finding merit in allegations of news publishers’ Coram of Ashok Kumar Gupta (Chairperson) and Sangeeta Verma and Bhagwant Singh Bishnoi (Members) expressed that,
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 unfavourable to their revenue generation.
Digital News Publishers Association (Informant) filed the present information under Section 19(1)(a) of the Competition Act, 2002 against Alphabet Inc., Google LLC, Google India Private Limited and Google Ireland Limited (referred to as ‘Google’/OPs’) alleging violation of Section 4 of the Competition Act.
Trajectory of the Facts
Informant averred that its members have endeavored to provide credible and fact-checked news, which is the bedrock of any democracy.
Further, as per the Informant, the majority of the traffic on news websites comes from online search engines (more than 50%), wherein Google is claimed to be the most dominant search engine. Based on the same, the Informant averred that more than 50% of the total traffic on the news websites is routed through Google and, being the dominant player in this field, Google, by way of its algorithms, determines which news website gets discovered via search.
Informant contended that Google not only has a monopolistic position in search in India, it has also a very strong position in advertising intermediation and controls/retains the major share at each level.
Adding to the above facts, informant stated that Google was 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.
The dependency of the customer on Google is also stated to be a well-known fact.
Hence, the OPs abused their dominant position in the market and violated provisions of Section 4 of the Competition Act, 2002.
Analysis and Discussion
The essence of the allegations noted by the Commission was the impugned conduct of Google, resulting in denial of fair share in the digital advertising revenue to news publishers and disclosure of inadequate information to reach a fair settlement.
Further, digitalization of the economy has resulted in higher spending on digital advertising, increasing the dependence of the news publishers on digital advertising.
It was noted that the informant was aggrieved by the denial of fair advertising revenue to its members resulting from the abuse of its dominant position by Google.
Commission in Google Search Bias case held that Google is dominant in both relevant markets, i.e., market for online general web search services and market for online search advertising services in India.
In relation to the dependence of news publishers on Google, it was averred that Google’s search engine results were a prominent source of online traffic to news website publishers. The said fact was corroborated from the traffic data accessed from similarweb.com, which indicated that search engines generate 25% to 77% (depending on the publisher) of the total traffic to news publisher websites. Hence, the discoverability for news publishers appeared to be dependent on search results from Google.
Commission prima facie opined that Google was dominant in both the relevant markets, i.e. market for online general web search services and market for online search advertising services in India.
Coram noted that Google displays news content (a) on its search engine page(s) in the form of general/organic search results, i.e., Google Search, as well as through (b) its news aggregator vertical, i.e., Google News. In response to a search query related to news items, in addition to organic results, Google also displays a ‘Top Stories’ carousel on its search engine result page.
Further, Google provides a news tab on Google Search, which groups news articles related to the search query. The news tab displays the title of the news article, an excerpt from the article, the thumbnail as well as the publisher’s name.
Google displays news content in a variety of ways through hyperlinks, thumbnails, extracts, etc. These hyperlinks, when clicked, take the users to the websites of the respective news publishers. Such access by the users allows the news publishers to monetize their content by offering advertising space on their websites to potential advertisers.
The Commission stated that it cannot deny that by virtue of its position of strength of its vertically integrated ecosystem which covers not only the markets of Online General Web Search Services and Online Search Advertising Services but also the online digital advertising intermediation services, Google appears to be a preferred service provider to publishers wanting to offer search and advertising services on their websites.
Further, the Coram prima facie was satisfied that based on the global presence of Google, it can be reasonably inferred that Google occupies a significant position in the market for online digital advertising intermediation services as well and investigation would bring out the said aspects in detail.
What appears from the above trajectory?
It appeared that the news publishers are dependent on Google for the majority of the traffic, which makes Google an indispensable trading partner for news publishers.
Prima facie, it appeared that news publishers have no choice but to accept the terms and conditions imposed by Google.
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 unfavourable to their revenue generation.
The alleged opacity on critical aspects such as data and audience management practices, or generation and sharing of revenue with publishers, exacerbates the information asymmetry and is prima facie prejudicial to the interest of publishers, which, in turn, may affect the quality of their services and innovation, to consumer detriment.
Hence, the imposition of such unfair conditions as well as price by Google in the provisions of its various services was prima facie violation of Section 4(2)(a) of the Act.
Snippets on Google
It needs to be examined whether the use of snippets by Google is a result of the bargaining power imbalance between Google on the one hand and news publishers on the other, and whether it affects the referral traffic to news publisher websites, and thus, their monetization abilities.
Coram expressed that 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.
Therefore, the alleged conduct of Google appeared to be an imposition of unfair conditions and price which prima facie was a violation of Section 4(2)(a) of the Act.
Mirror image websites
The alleged issue with regard to publishers being forced to build mirror-image websites using the AMP format, with Google caching all articles and serving the content directly to mobile users, can have revenue implications for the publishers.
Paywall Options
Since Google restricts paywall options unless publishers rebuild their paywall options and their meters for AMP, which may amount to an unfair imposition on publishers, the said aspects would be suitably examined during the investigation.
Further, it also needs to be examined whether Google imposes any discriminatory condition or price on various news publishers, which would violate Section 4(2)(a) of the Act.
Therefore, in Commission’s opinion, prima facie, Google violated the provisions of Section 4(2)(a) of the Act, which merits investigation and the informant also alleged that Google’s conduct has also violated the provisions of Section 4(2)(b)(ii) as well as Section 4(2)(c) of the Act.
DG can appropriately examine the above-stated.
Google using its dominant position in the relevant markets to enter/protect its position in the market for news aggregation services in violation of Section 4(2)(e) of the Act also needs detailed investigation.
Commission took note of the development in some countries such as France and Australia, as referred by the Informant, 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.
Therefore, Commission was satisfied that a prima facie case was made out against the alleged conduct of Google, which merits an investigation. [Digital News Publishers Assn. v. Alphabet Inc., 2022 SCC OnLine CCI 1, decided on 7-1-2022]