The following post has been authored by Vishakha Singh Deshwal, an LLM candidate at the West Bengal National University of Juridical Studies (WBNUJS), Kolkata. Here she analyses an emerging issue at the intersection of technology and competition law.
Every enterprise wants its Uniform Resource Locator (URL) to appear among the top links on search engines because these links get the most clicks. Research reveals that the 10 highest-ranking generic search results on the first page together generally received approximately 95% of all clicks on generic search results. While some enterprises pay huge advertisement costs to ensure that their links appear at the top (paid links), others resort to Search Engine Optimization (“SEO”) to acquire top spots among unpaid links. SEO may include regularly uploading quality content to the website, creating a user-friendly browsing experience, ensuring that the website is compatible with computers and hand-held devices, engaging in social media marketing, etc.
As a large part of the market has shifted to online platforms (e-commerce platforms), it becomes important to understand the interface between the working of Search Engines and Competition Law. This post seeks to explain the concept of “abuse of dominance” in the context of search engines. First things first, let us look at Google Search Shopping case to understand the relevance of Search Neutrality.
Until 2010, Google, which is the most used search engine, misused its dominant position to place certain links above others. In 2010, European Union’s Commissioner for Competition began investigating Google’s conduct and held it liable for abuse of dominance. In 2017, the biggest fine ever imposed by an antitrust regulator was slapped on Google (Google Search Shopping Decision). After this, Google corrected the bias advertised and sponsored links were distinctly marked and search order was based on relevance, popularity, design and so on.
The principle of Search Neutrality requires that search engines should have no editorial policies other than that their results be comprehensive, impartial and based solely on “relevance”. For instance, Google Search uses certain algorithms to rank web pages based on their relevance. For e.g., PageRank that works by counting the number and quality of links to a page to determine a rough estimate of how important the website is. Moreover, several updates (like Panda) are also used to improve the user experience by identifying and demoting low-quality sites that do not provide useful original content or otherwise add much value.
Any manipulation of the organic/natural order of the links in search results amounts to a search bias. Such bias is inbuilt in the very business model of the search engines. As per the founders of Google: “ . . . we expect that advertising funded search engines will be inherently biased towards the advertisers and away from the needs of the consumers”. So, the pertinent question is – what is the basis of such bias?
Relevance as the basis of Bias
In the domain of search engines, neutrality does not mean equal treatment regardless of the content. As mentioned earlier, search engines try to push up more relevant and quality links for a better user experience. Therefore, some amount of bias is inherent. Relevance is used as the basis of refining search results; it is defined in the search engine, so that the results are subject to the user’s preferences and the user is satisfied.
For example, a search for “Flights from Delhi to Mumbai”, would show several links. Some would be advertisements and sponsored links, while others would be unpaid links of travel gateways like MakeMyTrip, Goibibo, etc. Additionally, some other links for travel blogs, news items, maps, etc. would show up . Here, the search engine uses various algorithms to ensure that the most relevant links appear at the top. However, as relevance is subjective, bias based on relevance is contentious. At times, search engines tweak the algorithm to place their own or associated links higher up in the order to limit or eliminate competition.
Search Bias and Abuse of Dominant Position under Competition Act, 2002
Search Bias may become anti-competitive when it violates Section 4 of Competition Act, 2002. Section 4(1) prohibits abuse of dominant position. The explanation to Section 4(2)(b) defines “dominant position” as a position of strength, enjoyed by an enterprise, in the relevant market, in India, which enables it to- (i) operate independently of competitive forces prevailing in the relevant market; or (ii) affect its competitors or consumers or the relevant market in its favor.
Further, clauses (c) and (e) of Section 4(2) prohibit practices resulting in denial of market access and use of dominant position in one relevant market to enter into or protect other relevant market. In case of search engines, the peculiar feature of the sector is that there are a few enterprises that enjoy a dominant position in relevant markets (e.g. Google, Amazon, etc.) and such position may be abused.
To understand the interface of these provisions with search bias, let’s take a look at the Competition Commission of India’s (“CCI”) ruling on Google (2018).
In 2012, two cases were filed against Google alleging contravention of Section 4 of the Act. It was alleged that while conducting the core business of search and advertising, Google had been manipulating the search results and favoring its own services and partners, such as Google Video, YouTube, Google Maps, etc. Pages in the search results did not appear solely according to their relevance, popularity, etc. It was further averred that Google is widely recognized as enjoying a dominant status in the search advertisement market because of its market share, size, resources, reputation etc. Therefore, its search bias amounts to abuse of its dominant position.
The CCI confirmed that Google is a dominant enterprise with respect to the relevant markets of Online General Web Search Services and Online Search Advertising in India based on factors such as size and resources, economic power and commercial advantages, entry barriers, etc.
The CCI held that Google violated Section 4 by extending and preserving its dominance through:
- Wrong and unfair display of the search results prior to 2010 in pre-determined/fixed positions instead of ranking them in order of relevance.
- Embedding only its specialized services in ‘more results’ link. Further, by abusing its dominance, Google did not merely limit market access of its competitors, but it also accessed large volumes of user data and thereby, indirectly deteriorated the ability of the competitors to further innovate on their products and sustain and survive in the market.
The decision did not deal with the question of effect-based versus form-based approaches to determine abuse of dominance. The dissent order indirectly referred to the latter approach as it emphasized the need for greater economic evidence and its implications for competition and consumers to consider an alleged conduct as abusive. The form-based approach is the traditional approach to look at the abuse of dominance where perfect competition is the goal. Whereas, the effect-based approach aims at weighing the pro-competitive and anti-competitive effects of a firm’s action keeping in mind special considerations for an industry, rather than simply protecting competition. It recognizes that firms continuously look for new opportunities to maximize their profits through innovation. For this, a firm may adopt strategies that enhance its market power or eliminate a competitor, however, its actions may result in more efficient processes and enhanced consumer welfare (E.g. Reliance Jio case).
Thus, the argument of improving quality of search results cannot be disregarded, as it ultimately benefits the users. However, we must not overlook the implications of bias e-commerce platforms such as Amazon, Grofers, Nykaa, etc. where products that are not necessarily better in quality appear high up in the search result to the disadvantage of third-party sellers. For instance, if products sold by Cloudtail (in which Amazon has a substantial stake) on Amazon appeared higher in the search result not on the basis of relevance but as part of the strategy to push Cloudtail’s products, that would be an anti-competitive practice. The provisions under Section 4 of Competition Act could be invoked in these cases as well.
CCI’s decision demonstrates the ability of the Indian law to deal with new forms of abuse. Further, the Competition Law jurisprudence is to evolve with changing times including the propounding of the effects-based approach by the CCI. However, the effect of Search bias is not just limited to the visibility of business enterprises, but it has an over-arching impact in shaping public opinion and even affecting political outcomes (e.g. Cambridge Analytica Case). Today, when more people have access to the internet than ever before, it is important that search engines ensure transparency in their bias. It will ensure that the rights of all stakeholders such as consumers, business enterprises and citizens in general are protected. Relevance as the basis has stood the test of time, but other markers like popularity, design, quality etc. used by search engines may also affect search neutrality. Therefore, there is a need for an informed debate over the most appropriate basis of bias that keeps a check on the abuse of dominance in the market as well as suppression of information in the society in general.
 The Anatomy of a Large-Scale Hypertextual Web Search Engine (1998)