Alliance of Digital India Foundation, Alphabet Inc., Google LLC and Others

[Image omitted. See the official document.]

COMPETITION COMMISSION OF INDIA

Case No. 23(2) of 2024

In Re:

Alliance of Digital India Foundation ... Informant

AND

Alphabet Inc. ... Opposite Party No. 1
Google LLC ... Opposite Party No. 2
Google Ireland Limited ... Opposite Party No. 3
Google Asia Pacific Pte Limited ... Opposite Party No. 4
Google India Private Limited ... Opposite Party No. 5

CORAM

Ravneet Kaur
Chairperson

Anil Agrawal
Member

Sweta Kakkad
Member

Deepak Anurag
Member

ORDER UNDER SECTION 26(2A) OF THE COMPETITION ACT, 2002

1. Information in Case No. 23 of 2024 has been filed by the Alliance of Digital India Foundation (‘ADIF’) under Section 19(1)(a) of the Competition Act, 2002 (the ‘Act’), against Alphabet Inc., Google LLC, Google Ireland Limited, Google Asia Pacific Pte Limited and Google India Private Limited (‘Google’), alleging contravention of the provisions of Section 4 of the Act.

2. ADIF is stated to be an alliance of individuals/ start-ups/ companies that aims to improve the start-up ecosystem in India and actively helps in identifying and dealing with issues concerning the growth and functioning of start-ups in India. ADIF, as a body, is stated to represent the interests of various stakeholders such as start-ups, app developers, etc. and espousing the objective of improving the start-up ecosystem of the country.

3. Alphabet Inc. is stated to be a US-based multi-national technology company engaged in the business of internet-related services and products. Google LLC, formerly Google Inc., is stated to be a Delaware limited liability company and wholly owned subsidiary of Alphabet Inc., its holding company. Google LLC provides a variety of information technology related services, with a principal focus on search, advertising, operating systems, platforms, and enterprise. It also offers an internet search service. Google Ireland Limited is stated to have been set up in 2003 as a subsidiary of Google LLC and is responsible for providing services to the company’s users in the European Economic Area and Switzerland. Google India Private Limited is an Indian subsidiary of Google LLC and has been stated to be appointed by Google Asia Pacific Pte Ltd., Singapore as a non-exclusive authorised reseller of online advertisement space in India provided by Google Asia Pacific Pte Ltd., through Google Ads program to advertisers in India.

4. All five Google entities together are stated to be a ‘group’ in terms of clause (c) of the Explanation to Section 4 read with clause (b) of the Explanation to Section 5 of the Act.

5. The Commission considered the Information in its ordinary meeting held on 08.01.2025, and vide an order of even date, sought response from Google thereupon. Google filed its response to the Information on 09.04.2025.

6. Thereafter, vide order dated 11.06.2025, the Commission, upon consideration of the matter, decided to pass appropriate order(s) in due course.

7. The present is one of such order(s) passed.

8. At the outset, it is noted that allegations purporting to distinct markets and different products/ conducts of Google have been levelled in the Information filed in Case No. 23 of 2024.

9. As such, the Commission decides to segregate the said matter into three sub-cases viz.

• (a) Case No. 23(1) of 2024 which shall deal with the allegations of abuse of dominance by Google in the Online Display Advertising services market through its Google AdTech Stack;
• (b) Case No. 23(2) of 2024 which shall deal with the allegations of abuse of dominance by Google in the Online Search Advertising services market through its Google Ads Policies; and
• (c) Case No. 23(3) of 2024 which shall deal with the remaining miscellaneous allegations of abuse of dominance by Google of (i) leveraging its dominant position in the general search market to increase profits from online search advertising market by imposing unfair conditions (including pricing conditions), (ii) indulging in non-transparent ad review and ad redressal process under inconsistent Google policies, and (iii) removing third-party cookies from websites under its ‘Privacy Sandbox’ in Chrome browser.

10. Accordingly, in the present matter, the Commission shall analyse the allegations made by ADIF regarding abuse of dominance by Google in the Online Search Advertising services market through its Google Ads Policies.

11. There are two forms of digital advertising, online search advertising and online display advertising. Online search advertising is when an advertiser pays for its advertisement to appear on the search engine results page (‘SERP’) with ‘sponsored link’ below the results, from a user’s search on an internet search engine. The reason behind advertisers opting for search ads is because search-users generally tend to click mostly on the top few search results on the SERP. Google provides online search advertising services through its Google Ads, formerly known as Google AdWords.

12. On the other hand, online display advertising refers to placement of visual ads (banners, images, videos) on websites, mobile apps, or other digital platforms. They are ads that appear in the advertisement space (or ‘ad inventory’) of a third-party website.

13. As per ADIF, online advertising services are not substitutable with offline advertising services. Further, online search advertising is also not substitutable with online display advertising because the process of advertisement in online search advertisement is different from the online display advertising. Advertisers using online search advertising target in-market consumers who have already shown interest in their product or services. On the other hand, advertisers using online display advertising target out-market consumers through raising brand awareness. Search ads are considered ‘pull’ advertising while display ads are considered ‘push’ advertising.

14. ADIF has hence, stated that Google holds a strong position in the online search advertising market. It has been able to leverage its dominant position in the wider ecosystem into the search advertisement market through its vast reach among search users (both in general search and app store).

15. As per ADIF, Google has abused its dominant position in the market of ‘online search advertising services’ by imposing certain unfair and discriminatory terms and conditions upon the advertisers through its Google Ads Policies in India, which are non-negotiable and have to be accepted by the advertisers for placing an Ad on Google. ADIF has alleged that the terms and conditions imposed by Google are unfair because there is no reasonable justification behind imposing such restrictive trading conditions, and the same are discriminatory because these affect only a limited number of advertisers.

16. As per ADIF, Google Ads Policies say that Google Ads enable businesses around the world. Google operates globally, and thus, Google Ads Policies are applicable throughout the world. However, as per the local legal requirement, certain changes are undertaken by Google from place to place. For instance, some of the advertisement services not allowed in India are pre-natal gender determination, infant food products and prohibited medical services. ADIF has alleged that Google is abusing its dominant position in the online search advertising market in India by imposing additional restrictive terms even though there are no prohibitions in that regard under the Indian law.

17. ADIF has stated that all advertisers must explicitly agree to abide by the Google Policies, but these policies contain certain unfair and discriminatory terms forcing unfair rules to govern the interaction between search users and advertisers. As per ADIF, such conduct of Google by imposing unfair and discriminatory Google Ads Policies upon advertisers, is in violation of the provisions of Section 4(2)(a)(i) of the Act.

18. ADIF has cited four examples of unfair and discriminatory conditions, which form part of Google Ads Policies:

• 18.1 Restriction on advertising of third-party technical support providers for certain products and services
  • 18.1.1 ADIF has stated that Google is prohibiting promotion of technical support by third-party providers for consumer hardware or software products and services on Google Ads, without any reasonable commercial justification. ‘Other restricted businesses policy’ section of Google Ads Policies updated in October 2018 provides that “prohibit promotion of technical support by third-party providers for consumer hardware or software products and services. Examples of services that can’t be advertised under this policy include remote, online, and offline technical support, such as troubleshooting, account and password support, and software setup, by third-party providers.”
  • 18.1.2 Further, Google in its Google Ads & Commerce Blog says that “to continue to block ads for third-party tech support providers until we are more confident we have a solution that will better protect our users from harm. Note: We do allow advertising for the sale of consumer technology where the landing page might contain navigational features related to technical support… Today, we’re taking another step. We’ve seen a rise in misleading ad experiences stemming from third-party technical support providers and have decided to begin restricting ads in this category globally...”
  • 18.1.3 Google Policies also prohibit third-party technical support providers by saying, “The following is not allowed:
    Technical support by third-party providers for consumer technology products and online services
    Examples (non-exhaustive): Technical support for troubleshooting, security, virus removal, internet connectivity, online accounts (for example, password resets or login support), hardware support and repairs, or software installation.
    Note: We allow advertising for the sale of consumer technology where the landing page might contain navigational features related to technical support.”
• 18.2 Restriction on placing of ‘Call Ads’ on ads shown on laptops and desktops
  • 18.2.1 As per ADIF, Google provides another service for search advertisers viz. ‘Call Ads’, whereby advertisers can add their phone number on their ad text. However, as per ADIF, Google Ad Policies allow placing of such call ads only if the advertisers avail Google’s service ‘Call Assets’ or ‘Call-Only Ads’. ADIF has alleged that Google Policies unreasonably restrict ‘Call Ads’ on laptops and desktops, and allows the same exclusively on mobile phones. ADIF has stated that as per Google’s policies, “Call ads are text ads that include a phone number and are designed to encourage calls rather than clicks. They appear exclusively on mobile phones.”
  • 18.2.2 ADIF has submitted that if Call Ads are also allowed on laptops and desktops, then search-users could directly contact the advertiser by dialling the given number. Thus, as per ADIF, this is a strategically implied restriction from Google which is deterrent to user experience.
  • 18.2.3 Further, ADIF has stated that Google’s policies on Call Assets say that “Call Assets are the easiest way to add phone numbers to existing ads. If you attempt to include a phone number elsewhere in your ad text, it may lead to the disapproval of the ad. You can also create call campaigns.”
  • 18.2.4 Thus, ADIF has alleged that Google imposes an unfair and exclusivity condition on advertisers forcing them to avail Google’s service, i.e., Call Assets, in order to add phone number on their advertisement. Google states that if an advertiser wants to encourage customers to call them, they should consider using ‘Call Assets’ or ‘Call-Only Ads’ instead of putting the number in their ad text.
• 18.3 Non-transparency in Google Ads Policies and Ad ranking
  • 18.3.1 As per ADIF, for online search advertising, Google runs its own auction to decide which advertisement to show in response to a given search query and ranks the advertisement on its SERP and Play Store. Thus, an advertiser who wants to appear on the top of Google’s SERP or Play Store, needs to have a high Ad Rank.
  • 18.3.2 As per ADIF, the Ad Rank of an advertiser depends on the maximum price bid and the Quality Score of the advertisement. However, this process of price bidding and placement is all funnelled through and controlled by Google, through a black-box approach. Rankings of advertisements are based on a non-transparent, inconsistent, and complex indexing algorithm devised by Google involving the quality of the advertisements. Google is inconsistent with its policies determining the quality of advertisements. As per ADIF, though visibility of an ad depends on the ranking of the ad, Google does not completely disclose the way its algorithm operates, and the actual criteria which determines their ad’s Quality Score are not transparent. This creates an unfair ecosystem for the advertisers because they are not aware about the actual criteria to improve their Ad ranking. Therefore, as per ADIF, instead of providing its advertisement services to advertisers on fair and non-discriminatory terms, Google operates its ranking system of ads in a non-transparent manner. This provides immense opportunity to Google to interfere with the ranking list of search advertisements and impose unfair conditions, amounting to abuse of dominant position by Google.
  • 18.3.3 As per ADIF, the present issue raised is different in facts and cause of action from the issue examined in Commission’s earlier case of Vishal Gupta and Another v. Google LLC and Others, Case Nos. 06 & 46 of 2014 viz. ‘Whether the bidding process of Google AdWords is extremely opaque and not transparent?’ In the present case, ADIF submitted that Google operates its ranking system in a non-transparent manner, allowing Google to interfere with the ranking list of search ads on its SERP and Google Play Store. In furtherance to this, non-transparency in Google Ads Policies allows Google to artificially inflate the price for Google search advertising services. Thus, there is an abusive element in the conduct of Google which was never investigated in the previous cases. Further, there is a significant time gap when the Information(s) in Case Nos. 06 and 46 of 2014 were filed and the filing date of the present Information. There have been many changes in the competition landscape of the online search advertisement market in the meantime, given it is such a dynamic market. India has seen the upsurge in digital market, internet in general in the last five years. Regulators across the globe are investigating this issue, given the serious implications involved in the competitive landscape of digital markets. Currently, Google Search Ad Service is a ‘must have’ for all websites and app developers, and hence, Google has all the incentive to abuse its position to protect its position and generate more revenue. Consequently, ADIF has submitted that the previous orders of the Commission ought not bar the present Information under the principle of res judicata because the factual matrix and cause of action are completely different.
• 18.4 Allowing advertisers’ registered trademarks to be used as ‘keywords’ by competitors and third-parties
  • 18.4.1 Advertisers pay Google for their advertisements to be displayed on SERP when search-users enter particular keywords or phrases, with payment typically made to Google if the search user clicks on the advertisement. Similarly, to reach the customers and create a digital customer base, an app developer has to avail the service of Google search ads in Google Play Store. Search users can click on the ‘sponsored’ link, which is above the organic search results, either in Play Store or SERP to reach the advertiser.
  • 18.4.2 An advertiser who wishes to advertise their product or services on Google’s products (including Search, YouTube, Play Store, etc.) has to create text-based ads. It is alleged by ADIF that Google recommends the use of trademark of entities and app developers as ‘keywords’ to their competitors which will have more traction. A ‘keyword’ is a combination of words or terms that best describes the product, brand or retailer being advertised. Bid values are assigned to each individual keyword and then search engines pit advertisers against each other in second price auction-style bidding for the highest positions on search engine result pages. Ad Rank is a value that is used to determine where advertisements are shown on a page relative to other advertisements, and whether the advertiser’s advertisements will show at all. Ad Rank is a combination of the bid, ad quality score, the Ad Rank thresholds, the context of the user’s search, and the expected impact of extensions and other advertisement formats. The ranking of an advertisement hence, depends on the maximum price bid by an advertiser in an auction for each click on its advertisement, and the qualitative ranking of that advertisement (i.e. Quality Score). Google Ads advertisements displayed most prominently are those with the highest Ad Rank.
  • 18.4.3 When users search for that keyword on a search engine or an app, the relevant advertisement along with the advertisers’ webpage or app respectively, appears as a sponsored link on the top of the organic search results. When users click on the sponsored advertisement, they are taken to the advertiser’s website or app.
  • 18.4.4 As per ADIF, an advertiser cannot stop a competitor from bidding on its registered ‘trademarks’ as keywords and hence, to protect its customers from falling into the hands of a competitor or a malicious website, a genuine advertiser has to bid a high rate for the keywords of its own registered trademarks, because if an end-user searches for a specific website or app by its brand name or trademarked name, then ads of the advertiser which won the bidding process will