Commission is of opinion that an investigation would be required to determine
the nature and extent of problems that have prompted Google to take actions
against the RTS industry and whether or not the termination was legitimate
action. The investigation also needs to determine if Google could have taken
less damaging courses of action such as filtering out fraudulent firms and
maintaining contracts with firms that have been operating genuinely for long
periods of time.
It is unlikely that a firm operating under competitive constraints would
undertake such actions that alienate consumers and generate bad will towards
it. Google’s practices prima facie stem, to a large degree, from its
undisputable dominance in the online search market. Therefore, Google’s
practices towards AdWords customers such as the RTS firms in this case,
needs to be investigated under section 4 of the Act.
Accordingly, the Commission directs the Director General (DG) to
cause an investigation to be made into the matter and to complete the
investigation within a period of 60 days from receipt of this order.
COMPETITION COMMISSION OF INDIA
Case No. 06 of 2014
In Re:
Shri Vishal Gupta
Informant
And
1. M/s Google Inc. Opposite Party No. 1
2. M/s Google Ireland Limited Opposite Party No. 2
3. M/s Google India private Limited Opposite Party No. 3
CORAM
Mr. Ashok Chawla
Chairperson
Dr. Geeta Gouri
Member
Mr. Anurag Goel
Member
Mr. S. L. Bunker
Member
Order under section 26(1) of the Competition Act, 2002
Date: 15/04/2014
The present information has been filed under section 19(1)(a) of the
Competition Act, 2002 (‘the Act’) by Shri Vishal Gupta (‘the informant’)
against M/s Google Inc. (‘the opposite party No. 1’), M/s Google Ireland
Limited (‘the opposite party No. 2’) and M/s Google India private Limited
(‘the opposite party No. 3’) [collectively ‘Google’ hereinafter] alleging inter
alia contravention of the provisions of section 4 of the Act.
2.
As per the information, the informant, his family and associates own
and manage Shyam Garment Group of Companies which includes M/s Shyam
Garment Private Limited (SGL), M/s Delhi Call Centre Private Limited (DCL)
and M/s Audney (Audney). Both SGL and DCL are stated to be incorporated
under the provisions of the [Indian] Companies Act, 1956 whereas Audney is
stated to be incorporated under the appropriate laws of Delaware, USA. The
opposite party No. 1 is a company incorporated under the laws of USA; the
opposite party No. 2 is a company incorporated under the laws of Ireland; and
the opposite party No. 3 is a company incorporated under the provisions of the
[Indian] Companies Act, 1956.
3.
The informant states that in September 2012, the informant’s Group of
Companies had resolved to set up a ‘remote technology support (RTS)’
business and for the said purpose SGL had approached Google India for
opening a Google Adwords account. The informant states that after several
meetings a standard agreement was executed between SGL and Google
Ireland and the Adwords account was opened and activated on 07.01.2013.
4.
The informant states that Audney in connection with its remote tech
support business had set-up a website based on the guidelines provided by
Google Inc., Google Ireland and Google India and the said website was
designed by a Google certified partner. The website provides various remote
tech support services in the domain of hardware and software for computers,
operating system, anti-virus etc. Further, the informant states that consumers
searching for support services in the internet using the Google search engine
would be able to click on Audney’s advertisements, as Audney has a Google
Adwords account that enables its advertisements to appear in the Google
search page along with organic search results. By clicking on the
advertisement of Audney, consumers would be able to land on Audney’s
website and they may either leave a message or make a call on the phone
number mentioned therein. The phone calls made by the customers would be
routed to DCL and DCL’s employees would either receive the same or would
be contacting the consumer later to provide support services in a remote
manner either through phone or through the internet.
5.
The informant states that the bidding process of Google Adwords is
extremely opaque and not transparent and the lack of transparency is felt more
particularly on the mechanism of fixing the Cost Per Click. The informant
states that Audney has been placing its advertisements through Google
Adwords ever since its account was opened in January 2013 until the date of
termination of its account. During this period it had paid Google US
$310,000/- as advertisement expenditure while earning a revenue of US
$750,000/-.
6.
The informant further states that Google Inc. has a ‘user safety policy’
which is extremely vague and unclear giving rise to abuse of dominance by
Google Inc. The informant states that the requirements of Google safety policy
do not clearly specify anything other than the following:
(a) that advertisements displayed in Google’s search results should not have
misleading claims;
(b) advertisements should promote acceptable business practice; and
(c) advertisements should promote transparency and accuracy.
7.
The informant also states that a complete lack of transparency and
certainness as to what content would be uploaded as advertisements exists. On
several occasions, the Google Adword team had suspended advertisements
and thereafter accepted the same following protests by the account holders.
8.
The informant avers that Google India had promised that it would
review the advertisement of Audney as to whether they comply with the
various policies of Google. However, before a response was received, the
informant’s Google Adwords account was withdrawn on 22.10.2013 and vide
email dated 23.10.2013 Google informed that the said account was suspended
due to violation of User Safety Policy without issuing any notice or any prior
information. The informant avers that through email dated 30.10.2013 it was
further informed that the suspension of account was permanent.
9.
The informant alleges that on 05.11.2013 Google Inc. launched a
Remote Tech Support operation in the name of ‘Google Helpout’ which is a
clear alternative to the business setup of the informant company. The
informant further alleges that several remote tech support companies have
been suspended from Google Adwords programme and the reason for
suspension of the informant’s adwords account has been to promote Google’s
own activities in an unfair, discriminatory and uncompetitive manner. The
informant also alleges that in this manner Google has been able to restrict the
competition in an unfair and unreasonable manner.
10.
The informant further alleges that Google Inc. has indulged in
practices resulting in denial of market access to the informant and to other
remote tech support companies thereby restricting the access to market
through the internet. The informant alleges that by abusing its dominant
position to limit or restrict the number of remote tech support companies,
Google has caused prejudice to the consumers. Further, the informant alleges
that Google and its group companies have caused trade barriers to help and
assist its own programme ‘Google Helpout’ and other associate companies
such as www.iyogi.com.
11.
Based on the above averments and allegations, the informant has
prayed to the Commission to:
(a) institute an inquiry against the opposite parties and pass an order directing
the Director General to carry out an investigation into violation of section 4 of
the Competition Act, 2002 and submit its report thereon to the Commission;
(b) direct the opposite parties to refrain from indulging in similar abusive
conduct in future;
(c) impose such penalty/cost on the opposite parties as may be deemed fit by
the Commission; and
(d) pass such other or further or order[s] as may be deemed fit and expedient
in the interest of justice.
12.
The Commission has perused the information and the material
available on record. The Commission has also heard the counsel appearing for
the informant at length.
13.
From the information, it appears that Shyam Group of Companies,
comprising SGL, DCL and Audney, is providing remote technology support
services through a business model whereby Audney- incorporated in USA- by
placing advertisements online through Google’s Adword programme giving
link to the website of Audney apart from providing details of telephone
numbers which the consumers may use for obtaining remote tech support
services. Thereafter, DCL-an India based call centre- would attend the call and
would provide the required tech support services remotely.
14.
From the averments and allegations made in the information, it appears
that the informant Group of Companies approached Google India for opening
an account in Google Adwords. For this purpose, it electronically signed from
India with Google Ireland and thereafter to implement the business objective
of establishing remote tech support, it incorporated a company Audney in
USA as business process outsourcing entity, as stated earlier with a call centre
based in India (DCL).
15.
The informant’s said companies have been submitting advertisements
in Google Adwords from January 2013 till October 2013 when the account of
the said companies was withdrawn/ suspended/ terminated by Google. From
the correspondence exchanged by and between the informant’s Group of
Companies and Google, it appears that the Adword account of the informant’s
group companies was terminated on 22.10.2013 on account of certain alleged
violation of User Safety Policy of Google.
16.
It is the case of the informant that the said policy is extremely ‘vague’
and ‘unclear’ in as much as it does not make clear as to what is the nature of
the content to be placed in the advertisement and what is the standard enforced
by Google. Furthermore, the informant has stated that the entire bidding
process of Google Adwords is extremely ‘opaque’ and ‘not transparent’.
17.
To examine the allegations relating to abuse of dominance by Google,
it is first necessary to determine and delineate the relevant market. In this
connection, it may be pointed out that in the previous two cases against
Google viz. Case Nos. 07 and 30 of 2012, the Commission in its prima facie
orders delineated the market for online search advertising in India as the
relevant market. Furthermore, the Commission prima facie found Google to be
in a dominant position in the said relevant market.
18.
As the allegations in the present matter also pertain to the alleged
abusive conduct of Google in the online search advertising market, the said
market may be taken to be the relevant market in the present case as well and
Google was further found to be prima facie dominant in those cases. In view
of the above, it is not necessary to dilate any further on the said aspects.
19.
From the material available on record, it appears that the said Adword
account of the informant’s group companies was suspended due to alleged
contravention by them of the user safety policy of Google Inc. The informant
has described the said policy as ‘vague’, ‘unclear’, ‘opaque’ and ‘not
transparent’.
20.
On a careful perusal of the allegations made in the information, the
Commission is of opinion that an investigation would be required to determine
the nature and extent of problems that have prompted Google to take actions
against the RTS industry and whether or not the termination was legitimate
action. The investigation also needs to determine if Google could have taken
less damaging courses of action such as filtering out fraudulent firms and
maintaining contracts with firms that have been operating genuinely for long
periods of time.
21.
It is unlikely that a firm operating under competitive constraints would
undertake such actions that alienate consumers and generate bad will towards
it. Google’s practices prima facie stem, to a large degree, from its
undisputable dominance in the online search market. Therefore, Google’s
practices towards AdWords customers such as the RTS firms in this case,
needs to be investigated under section 4 of the Act.
22.
Accordingly, the Commission directs the Director General (DG) to
cause an investigation to be made into the matter and to complete the
investigation within a period of 60 days from receipt of this order.
23.
The DG is also directed to investigate the role (if any) of the persons
who were in charge of, and were responsible to the companies for the conduct
of the businesses of such companies, after giving due opportunity of hearing to
such persons.
24.
It is, however, made clear that nothing stated herein shall tantamount
to an expression of final opinion on the merits of the case and the DG shall
conduct the investigation without being influenced by any observations made
herein.
25.
The Secretary is directed to send a copy of this order alongwith the
information and the documents filed therewith to the Office of the DG
forthwith.
Sd/-
(Ashok Chawla)
Chairperson
Sd/-
(S. L. Bunker)
Member
New Delhi
Date: 15/04/2014
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