Google is likely to face a penalty of up to $5 billion if the web giant is found guilty of violating competition norms in India following a CCI probe.
Google, the world's largest Internet Company, will find itself in hot waters if an ongoing investigation by India's fair trade watchdog, Competition Commission of India, finds Google in violation of the country's competition norms. This can result in Google paying as much as $5 billion in fines. Google said the company is fully cooperating with the CCI in its investigation.
The CCI has been investigating Google for over two years to see if the web giant is abusing its dominant position in the internet search engine space. The probe against Google was started in 2012 after Advocacy group CUTS (Consumer Unity and Trust Society) International and a domestic matchmaking site Matrimony.com complained that Google exploited its dominance in the internet search and advertising market.
According to Venture Capital Post, a research paper published by the Competition Commission of India in 2012 said, "The issues identified in respect of Google definitely raise doubt about the conduct of the Google and needs in- depth investigation to determine whether such practices relating to search engines and advertising search market are also being resorted to in India. This is because Indian market also has no. of vertical search engines which may be feeling the brunt."
Under CCI's regulations for healthy competition in India, any company found violating the norms will be entitled to a fine of up to 10 percent of its three-year annual average turnover. In this case, Google's annual revenues in the last three years add up to $49.3 billion, 10 percent of which can be as high as $5 billion.
In similar investigations in the U.S. and other European countries, Google witnessed a favorable outcome. The Federal Trade Commission concluded a two-year review saying the company's services did not violate the competition norms in the country. But in the Indian competition regime, Google does not have the provision for a settlement process and that a complaint once filed with the CCI cannot be withdrawn.
The CCI has referred the investigation to the Director General for a detailed probe. According to the sources, the DG will soon submit its report to CCI, reports CNBC.
