Google Faces Antitrust Inquiry In India - InformationWeek

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5/7/2012
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Google Faces Antitrust Inquiry In India

Regulators in Europe, the U.S., and now India circle Google; number of formal complaints still to be determined.

Oracle v. Google: Tour The Evidence
Oracle v. Google: Tour The Evidence
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Compounding Google's regulatory entanglements, India has begun an antitrust investigation into the search company's online advertising business.

According to Agence France Presse, S.L. Bunker, Secretary of Competition Commission of India, said the investigation is expected to take several months and is in response to a complaint about discriminatory AdWords practices filed by Bharatmatrimony.com, an Indian marriage website.

The investigation aims to determine whether there's any merit to the complaint against Google.

Google in a statement said, "Though competition is always a click away, we understand that with success comes scrutiny. We have not received any communication from the CCI, but we're always happy to answer questions about our business, and we're confident that our products are compliant with competition law in India."

In February, India's financial law enforcement agency, the Directorate General of Economic Enforcement, launched an investigation into Google's and Yahoo's business practices to determine whether either of the two companies had violated the country's foreign exchange law. India's Economic Times suggests the inquiry is linked to litigation in the country to make Google, Yahoo, and other social networking sites take more responsibility for objectionable content.

[ Read FTC Hires Attorney, Eyes Google Search: What's Next?. ]

Late last month, the U.S. Federal Trade Commission signaled it was getting serious about taking action against Google. The agency hired an experienced antitrust litigator to helm its own antitrust investigation into Google's search advertising business, a possibility that Google has been lobbying to avoid for the past three years.

Regulators in Europe have been engaged in their own fact finding about Google's ad business, following complaints from Google's competitors in Europe. Last week, EU Competition Commissioner Joaquin Almunia told Reuters that the Commission was in no hurry to decide whether to pursue formal charges and that it is very serious about the case.

Three states--California, New York, and Texas--are conducting their own inquiries into Google's ad business. Regulators in Argentina and South Korea also are looking into whether Google has violated antitrust laws.

On Monday, the National Taxpayer's Union, a business lobbying group funded by Philip Morris among others, published an open letter expressing concern that the FTC's approach to antitrust enforcement could hamper corporate competitiveness.

"Google, with its popular online search engine, is the latest target of regulators claiming to be acting in consumers' interests, even though barriers to entry into the search market are exceedingly low and Google's competition is but one click away for online users," the letter states.

How low are the exceedingly low barriers that bar entry into the search market? Try over a billion a quarter. As of last September, Microsoft had spent $5.5 billion building and running Bing.

The letter urges regulators to revise "our broken, burdensome regulatory and fiscal management systems in order to foster strong competition and economic growth into the future."

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