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Google in biggest anti-trust case

Google in biggest anti-trust case

UPSC CSE – SYLLABUS: GENERAL STUDIES-3- Effects of liberalization on the economy, changes in industrial policy and their effects on industrial

growth.

Google in biggest anti-trust case

In news:

The United States Department of Justice (DoJ) sued Google on Tuesday, alleging that the company had abused its dominant position in a way that had harmed its competitors as well as customers.

Eleven US states have joined the DoJ in the anti-trust lawsuit against Google “for unlawfully maintaining a monopoly in general search services and search advertising”.

The lawsuit:

  • The lawsuit marks the first time there has been a bipartisan effort — involving both the Democratic and the Republican parties — to look into the monopolistic powers of Google.
  • The challenge for Google would be continued scrutiny into its biggest revenue generating segment, which is advertising gained from its search engine and affiliate websites.
  • In the April-June quarter, the company had earned nearly $38 billion, mainly from advertisements.
  • Apart from increased federal scrutiny, big tech companies are also likely to face more questions and probes from states in the US, which have in the recent past hauled these firms up for not doing more to control their influence on day-to-day aspects of life.
  • The last time Google faced legal action for allegedly abusing its dominance in the search market was almost a decade ago — in 2011 — when the Federal Trade Commission (FTC) was acting on a complaint filed by a Washington-based non-profit research agency, Electronic Privacy Information Centre.
  • Although the five commissioners eventually voted not to pursue a case against Google, the company had to, as a part of a settlement process, implement a strict user data security policy and agree to independent privacy audits for the next 20 years.
  • Google is a global market player.
  • This (lawsuit) would have a worldwide impact where Google’s practices could potentially be looked at.
  • But having said that, the CCI (Competition Commission of India) is already looking into such practices and has already fined Google previously.
  • This is very much under the CCI radar to keep these practices under check.

Allegations that Google faces in India:

  • Over the last three years, Google has had multiple run-ins with the CCI for alleged abuse of its dominant position in the search engine market, the Androidsmartphone and television market, as well as the Google Flights service.
  • In 2019, India’s antitrust body had held Google guilty of misuse of its dominant position in the mobile Android market and said the company had imposed “unfair conditions” on device manufacturers to prevent them from using other operating systems.
  • And in February 2018, the CCI had fined Google Rs 136 crore for unfair business practices in the online search market.
  • It said that Google had “allocated disproportionate real estate” for its affiliates, to the disadvantage of other companies that were trying to gain market access.
  • Besides, it was also found that Google has provided a further link in such commercial units which leads users to its specialised search result page (Google Flight) resulting into unfair imposition upon the users of general search services as well.
  • Google has challenged the CCI findings in forums such as the National Company Law Appellate Tribunal and the Supreme Court.

Impacts of the lawsuit:

  • Although the lawsuit is the first of its kind, it is unlikely that there will be any swift action on the company in the near term.
  • The lawsuit is just the beginning of something formal, after the House panel report.
  • Going ahead, Google may argue before the courts that it is being singled out from amongst the other companies, or try to explain why it does not really abuse its dominance in any market segment.
  • Yes, there can be a spiralling effect but every country will have to conduct its own separate investigation if the same conduct has been done there.
  • Regulators will definitely have a sense of looking into the practices of Google.

Source: ” Indian Express”.

POSSIBLE UPSC MAINS EXAMINATION:

What is the anti-trust case against Google all about? What are its implications in India?