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Allegations against Google over Revenue Sharing

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October 14, 2022

What is the issue?

The Competition Commission of India (CCI) has ordered a probe against Google for alleged unfair revenue sharing terms with regard to news content.

What is the case about?

  • The News Broadcasters and Digital Associations (NBDA) has filed a complaint against Google’s parent entities under the Competition Act, 2002.
  • Compensation- The central contestation is that the Google has not compensated news publishers for their contribution to its platforms.
  • News content- The NBDA has alleged that its members are forced to provide their news content to Google in order to prioritise their web links in the search engine result page.
  • Dominance- Owing to the tech-giant’s dominance in the space, the publishers were forced to integrate content on their platforms.
  • They have to trade in the company’s exchanges and use its buying tool, Google Ads/DV 360, to receive bids from advertisers.
  • Accelerated Mobile Pages- Google has been accused of forcing members into using their Accelerated Mobile Pages (AMP) or building mirror-like light-weight webpages.
  • Incompliance may affect the members’ placements in mobile search.
  • Paywall options- The tech giant restricted paywall options unless publishers rebuild their websites as per AMP standards.
  • Header bidding- The search-engine operator has also been accused of encouraging members to disable header bidding.

The Competition Act, 2002 and the 2007 amendment prohibits anti-competitive agreements, abuse of dominant position by enterprises and regulates combinations (acquisition, acquiring of control and M&A).

How is the current situation?

  • Google’s stand- According to Google, the revenues accrued are spent towards defraying the costs of maintaining data centres, technological investments, enabling innovations and maximising advertiser return on investment.
  • CCI’s direction- The CCI has ordered the Director General (DG), its probe arm, to club the matters and submit a consolidated investigation report.

Why is Google dominant?

  • Market share- As per the NBDA, Google’s search engine commands a 94% market share in the country.
  • Online proliferation- It holds significance with the increased transition toward online news consumption (inclusive of app-based consumption).
  • With online proliferation, there is an increased reliance of news publishers on digital ad revenues, and in turn, tech-based companies.
  • Traffic- More than half of the total traffic on news websites is routed through Google.
  • Prioritizing the search queries- Readers would more often opt for an online web search rather than reaching out to a specific news website by typing its URL in a browser.
  • Since the search engine determines which news websites would be prioritised in search queries, it has become the first port of call for information online.

What is happening outside India?

  • Europe- In 2022, an anti-trust complaint was filed against Google with the European Commission, challenging its ad tech stranglehold over press publishers.
  • Australia- Australia introduced the ‘Media Bargaining Code’ that requires news outlets to negotiate commercial deals with Facebook and Google with violations calling for civil penalties of up to $10 million.
  • USA- The US court has allowed a larger anti-trust case against Google that alleges that the tech giant monopolized the ad-tech market and suppressed competition by its access to data.
  • Canada- The Canadian government tabled legislation that aims to introduce transparency in sharing of revenue between digital news publishers and intermediary platforms such as Google.

References

  1. https://www.thehindu.com/sci-tech/technology/explained-what-are-the-allegations-against-google-by-the-nbda/article65998597.ece
  2. https://www.firstpost.com/explainers/explained-why-india-has-ordered-yet-another-probe-against-google-11443671.html
  3. https://www.cci.gov.in/about-us

Quick facts

Header bidding

  • It refers to a programmatic bidding process that unifies multiple exchanges for a single bidding event.

Paywall

  • A paywall is a revenue strategy where several sections or the entire website is placed behind a wall.
  • To bypass the wall the readers are prompted to register themselves for a paid subscription.

The Competition Commission of India (CCI)

  • The Competition Commission of India has been established by the Central Government with effect from 14th October 2003.
  • CCI is a statutory body responsible for enforcing The Competition Act throughout India.
  • The CCI consists of a Chairperson and 6 Members appointed by the Central Government.
  • Functions- It is the duty of the Commission to
    • Eliminate practices having adverse effect on competition
    • Promote and sustain competition
    • Protect the interests of consumers
    • Ensure freedom of trade in the markets of India
    • Give opinion on competition issues
    • Undertake competition advocacy
    • Create public awareness
    • Impart training on competition issues

The News Broadcasters & Digital Association (NBDA)

  • Formerly known as News Broadcasters Association (NBA)
  • It represents the private television news, current affairs and digital broadcasters.
  • It is the collective voice of the news, current affairs and digital broadcasters in India.
  • Members- Presently 26 leading news and current affairs broadcasters.
  • It is an organization funded entirely by its members.
  • The NBDA presents a unified and credible voice before the Government, on matters that affect the growing industry.
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