Tuesday, May 8, 2012

India Joins Antitrust Lawsuit Bandwagon Against Google

Story first appeared in Information Week.

Compounding Google's regulatory entanglements, India has begun an antitrust investigation into the search company's online advertising business, say Chicago Antitrust Lawyers.

According to the 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 is confident that their products are compliant with competition laws 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.

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, a EU Competition Commissioner 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, according to St. Louis Antitrust Lawyers.

On Monday, the National Taxpayer's Union, a business lobbying group, 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.

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 the broken, burdensome regulatory and fiscal management systems in order to foster strong competition and economic growth into the future.


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