It's lonely at the top. Search giant Google is a truly massive company. It employs more than 53,000 people, has a market capitalisation of more than $420 billion and could easily swallow up a couple of small countries, going by GDP alone. It's also utterly dominant: More than two-thirds of all searches on the internet worldwide go through Google, with the tech firm actually having more than 90% market share in many countries.
That means it's very successful. But it also means its influence is massive. Google to a large extent controls what we think of the world, even as it insists that it "won't be evil" while doing so. Google is so big that most people think of it as the internet itself. And it's so influential that some believe it is helping decide the results of elections.
While it's political inclinations might be the stuff of conspiracy theories, allegations of abusing its dominant position in the market are all too real. The Competition Commission of India's director-general last week filed a report accusing Google of ensuring sites that pertain to its own products, like Google Finance and Google Hotel Finder, turn up first on its search engine.
Abuse of dominant position
These charges levelled by the Competition Commission have been corroborated by 30 other companies including Flipkart and MakeMyTrip, which have also alleged that the sponsored links thrown after a Google search are mostly related to the amount of money a company is spending on advertising with Google. What this means is that a search for a company could show up its competitor’s result at the top as the sponsored result if it has been paying a lot of money for advertising.
If proven guilty, the company might be fined with up to 10% of its total income which was $14 billion in 2014, according to the Economic Times. The director-general of the commission, hence, reportedly concluded that Google’s practices are counter-productive to innovation as it gets expensive for the listed websites to keep advertising in order to be seen in the search results.
The company, however, believes that it is in full compliance of the Indian law.
“We’re currently reviewing this report from the CCI’s ongoing investigation," a Google spokesperson said. "We continue to work closely with the CCI and remain confident that we comply fully with India’s competition laws. Regulators and courts around the world, including in the U.S., Germany, Taiwan, Egypt and Brazil, have looked into and found no concerns on many of the issues raised in this report.”
Google has already faced similar charges in the US and Europe.
After a five-year investigation, Google has been charged with rigging search results for shoppers by the European Union, which alleges that the company is moving its own product listings at the top and undermining other websites. If it indeed turns out that Google used its dominance in the market, the EU regulator could fine it up to 6.2 billion euros like it did with Intel in 2009 for 1.09 billion euros.
Accusations and settlements
In 2013, when the US Federal Trade Commission chose not to continue prosecuting Google over antitrust concerns after the company offered to voluntarily make changes to the way its search engine works and that proved enough to keep it out of trouble.
Others have also come out arguing that Google search results doles out “inferior content” to consumers, with this study by listings company Yelp claiming the search engine was abusing its position.
“By prominently displaying Google content in response to search queries, Google is able to leverage its dominance in search to gain customers for this content,” the paper noted. “We find that users are 45% more likely to engage with universal search results (i.e. prominently displayed map results on Google) when the results are organically determined. This suggests that by leveraging dominance in search to promote its internal content, Google is reducing social welfare, leaving consumers with lower quality results and worse matches.”
In India, the company has already been fined Rs 1 crore last year for failing to comply with the information requests by the Competition Commission.
Google has claimed that its search results are similar to that of Facebook and Twitter. But not everyone was sold on the argument.
According to the Economic Times, the director-general of the Competition Commission said that the argument was invalid since those are social networks and not search engines. Facebook too, in its submission to the Competition Commission, claimed that the nature of Google’s searches which often span across the web is quite different from searching within a social network.
Algorithmic defence
In 2012, amidst an antitrust investigation by the EU and calls for a similar probe in the US to make the company reveal how its search algorithms work, Google jumped to defend itself and claimed that its algorithms are able to keep sponsored and organic search results separate.
Senior Vice President of Engineering Amit Singhal said that it wasn’t manipulating its algorithms for websites but to provide users with a better experience. “Our algorithms are always designed to give users the most relevant results,” he wrote. “Sometimes the best result isn’t a website, but a map, a weather forecast, a fact, a quick answer, or specialized image, shopping, flight, or movie results.”
Even though the company was far from admitting its culpability, it said that all other search engines such as Yahoo and Bing do the same thing.
What riled many, however, was the nonchalance with which Singhal, in the same blogpost claimed that the users are free to switch to other search websites as they deem fit and even provided links to other search engines.
“And if users don’t like our results, they can try Bing, Yahoo, DuckDuckGo, or even Google Minus Google,” the blog stated.
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That means it's very successful. But it also means its influence is massive. Google to a large extent controls what we think of the world, even as it insists that it "won't be evil" while doing so. Google is so big that most people think of it as the internet itself. And it's so influential that some believe it is helping decide the results of elections.
While it's political inclinations might be the stuff of conspiracy theories, allegations of abusing its dominant position in the market are all too real. The Competition Commission of India's director-general last week filed a report accusing Google of ensuring sites that pertain to its own products, like Google Finance and Google Hotel Finder, turn up first on its search engine.
Abuse of dominant position
These charges levelled by the Competition Commission have been corroborated by 30 other companies including Flipkart and MakeMyTrip, which have also alleged that the sponsored links thrown after a Google search are mostly related to the amount of money a company is spending on advertising with Google. What this means is that a search for a company could show up its competitor’s result at the top as the sponsored result if it has been paying a lot of money for advertising.
If proven guilty, the company might be fined with up to 10% of its total income which was $14 billion in 2014, according to the Economic Times. The director-general of the commission, hence, reportedly concluded that Google’s practices are counter-productive to innovation as it gets expensive for the listed websites to keep advertising in order to be seen in the search results.
The company, however, believes that it is in full compliance of the Indian law.
“We’re currently reviewing this report from the CCI’s ongoing investigation," a Google spokesperson said. "We continue to work closely with the CCI and remain confident that we comply fully with India’s competition laws. Regulators and courts around the world, including in the U.S., Germany, Taiwan, Egypt and Brazil, have looked into and found no concerns on many of the issues raised in this report.”
Google has already faced similar charges in the US and Europe.
After a five-year investigation, Google has been charged with rigging search results for shoppers by the European Union, which alleges that the company is moving its own product listings at the top and undermining other websites. If it indeed turns out that Google used its dominance in the market, the EU regulator could fine it up to 6.2 billion euros like it did with Intel in 2009 for 1.09 billion euros.
Accusations and settlements
In 2013, when the US Federal Trade Commission chose not to continue prosecuting Google over antitrust concerns after the company offered to voluntarily make changes to the way its search engine works and that proved enough to keep it out of trouble.
Others have also come out arguing that Google search results doles out “inferior content” to consumers, with this study by listings company Yelp claiming the search engine was abusing its position.
“By prominently displaying Google content in response to search queries, Google is able to leverage its dominance in search to gain customers for this content,” the paper noted. “We find that users are 45% more likely to engage with universal search results (i.e. prominently displayed map results on Google) when the results are organically determined. This suggests that by leveraging dominance in search to promote its internal content, Google is reducing social welfare, leaving consumers with lower quality results and worse matches.”
In India, the company has already been fined Rs 1 crore last year for failing to comply with the information requests by the Competition Commission.
Google has claimed that its search results are similar to that of Facebook and Twitter. But not everyone was sold on the argument.
According to the Economic Times, the director-general of the Competition Commission said that the argument was invalid since those are social networks and not search engines. Facebook too, in its submission to the Competition Commission, claimed that the nature of Google’s searches which often span across the web is quite different from searching within a social network.
Algorithmic defence
In 2012, amidst an antitrust investigation by the EU and calls for a similar probe in the US to make the company reveal how its search algorithms work, Google jumped to defend itself and claimed that its algorithms are able to keep sponsored and organic search results separate.
Senior Vice President of Engineering Amit Singhal said that it wasn’t manipulating its algorithms for websites but to provide users with a better experience. “Our algorithms are always designed to give users the most relevant results,” he wrote. “Sometimes the best result isn’t a website, but a map, a weather forecast, a fact, a quick answer, or specialized image, shopping, flight, or movie results.”
Even though the company was far from admitting its culpability, it said that all other search engines such as Yahoo and Bing do the same thing.
What riled many, however, was the nonchalance with which Singhal, in the same blogpost claimed that the users are free to switch to other search websites as they deem fit and even provided links to other search engines.
“And if users don’t like our results, they can try Bing, Yahoo, DuckDuckGo, or even Google Minus Google,” the blog stated.