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Abuse Of Dominant Position In The Smart TV Market: Antitrust Case Against Google

Parnika Agnihotri
10 Oct 2020 5:54 AM GMT
Abuse Of Dominant Position In The Smart TV Market: Antitrust Case Against Google
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According to a report from Reuters, a new antitrust case against Google has been filled in Competition Commission of India. In this case it is alleged that google has abused its dominant position in the smart TV market by blocking the companies who want to create or modify android system.

However, the case is in its preliminary stage and allegations are yet to be reviewed by the members and chairperson of CCI also no orders of any investigations are given.

This is not the first time when Google is facing charges of abuse of dominant position, earlier in 2018 CCI found abusing of its dominant position by creating "search bias", which created uneven market by creating favour for its service and partners through manipulating its search result and giving advantage to vertical or sponsored sites. Based on the investigation report and various evidence CCI observed and affirmed that Google has a dominant position in the relevant market and was abused by it. Although there is stranding presence of other competitors as well such as Yahoo! and Microsoft Bing, however tailored result by google through its vertical sites such as Google News, Google flight, Google Map etc. have made the results biased and created a deviation from the mechanism of 'Universal results and Common units". Hence the CCI found the act anticompetitive in terms of Section 4(2)(a)(i), 4(2)(b)(ii), 4(2)(c) and 4(2)(e) of the Competition Act,2002.

CCI in the above case had relied upon the case Excel Crop Care Ltd v. CCI( 2017)8 SCC 47, where an exemplary penalty of Rs 135.86 crore @5percent of it average revenue generated from India operation for the FY 2013- 2014 and 2014-2015 was imposed for having anti-trust conduct.

Similarly, in August 2018, Google was fined 4.34 billion Euros by European Union for conducting antitrust activity. In this case, it was alleged that Google has used Android as a vehicle to cement the dominant position of its search engine, moreover pre-installed android operating system blocks rivals to innovate and compete on the merits.

So, in the light of above-mentioned cases pertaining abuse of dominant position by Google it becomes important to know that what is so peculiar in digital market which creates blockade for other rival companies or new companies to enter into the market.

If we dig into the concept of Abuse of dominant position then it is important to understand that dominant position per se does not constitute abuse of dominance. There has to be existence of 4 elements in order to constituent a case under section 4 of The Competition Act 2002. First, it is necessary to establish the existence of dominant position held by a firm or group of firm and this dominant position has to be in "relevant market" therefore delineation of relevant market is critical to the sound development of most competition law cases. White as well as Anderson, Daniel and Heimler have identifies Small but Significant Non Transitory Increase in Price (SSNIP) test as "the test" to determine the relevant market where the determination is whether customer can easily switch to an alternative product or another supplier, if answer is affirmative then alternative product or source of supply is included in relevant market for the case.

Once the relevant market and dominant position is determined then the question of investigating into the activity and its adverse effect on other competitors is taken into account.

In digital market the one peculiar feature which makes it different from Neo classical approach of business is "Data" as it is rightly said by Clive Humby in 2006 that " Data is the new oil" seems very true in the business of digital platform. For example, as discussed above Google gives its Android operating system free of charge to mobile telephone manufacture thereby enabling it to collect user data. In addition, Google provides many services such as search engine, cloud computing where by it collect the data and sell it to advertising company which then make tailored advertisement for user, this attracts user and increase advertising revenue. As a result even if there is any other service provider might not get that much revenue as a result a barrier for innovation gets created.

Access and control of data confers market power as a result firms compete for market as "winner takes all". In data driven economy the sunk cost is in innovation and then once the innovator manages to make its position by collecting relevant data it creates a blockade for other new as well as existing competitors to enter or survive in the market. Where the question of survival comes in then competing on fair terms goes out.

Therefore, in the present case of Google before CCI regarding Smart TV market, a crucial question which needs to be address is that "Whether there is any way by which a balance situation can be created between Google and other competing firms in the relevant market?" If we go by Locke's labour theory then there is no harm in enjoying the fruits of labour by Google. However, if we take Rawl's theory of justice then there has to be just and fair situation in the market for others to compete.

It can be concluded that recent competition cases show that competition law frameworks and enforcement need to be adapted in respect of features and business models of digital platforms. Therefore, it becomes important for competition authority to broaden the consumer welfare standards and go beyond prices and market share consideration while deciding the cases on abuse of dominant position in digital platform. Competition authority also keep objective of saving other firms which are in competition with big sharks of digital market ocean. This need is in all over the globe hence it becomes important for competition authority to discuss multilaterally and resort to some minimum standard to deal with negative outcomes which may arise by digital economy.

Views are personal only.

(Author is a Post Graduate (Business Law) Student at NLSIU, Banglore)

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