Beginning with a brief overview, Google and Amazon are facing intense scrutiny for their overwhelming influence on aspects like consumer privacy, labor conditions, public discourse, not to mention potential violation of antitrust law. Both the U.S. Federal Trade Commission and the Department of Justice have initiated Antitrust Investigations against these two tech giants respectively. Further, in 2018, Google was slapped with a hefty fine of Rs.136 crore by The Competition Commission of India (CCI) due to its unfair business practices and for breaching antitrust conduct in India.
Controversies Surrounding Google and Amazon
Focusing foremost on Amazon, they seem to be in hot water due to their Prime program, which is alleged to be a predatory pricing scheme designed specifically to throttle competitors. Furthermore, their Marketplace platform, where third-party sellers are facilitated to list their products, has been accused of one-sided contracts, disputes over advertising policies, and promoting a ruthless competitive environment. Amazon’s continuous growth also poses a significant threat to monopolize other industries such as shipping. Numerous consumer groups and vendors claim that Amazon deliberately undermines new competition, especially as it expands its business into new sectors such as groceries and fashion.
Google, on the other hand, has been reproached for allegedly manipulating its dominance of the online search market by showing biases towards certain ads and searches. European regulators have further penalized Google by $1.7 billion in 2017 for preventing websites from selling ads that were in direct competition with Google-served ads near search results.
Understanding Antitrust Law
At its core, Antitrust law, also known as competition laws, plays a crucial role in safeguarding trade and commerce from unfair restraint, monopolies, and price fixing. These laws ensure that fair competition prevails in an open-market economy. In India, The Competition Act of 2002 serves as the primary antitrust law, which replaced the Monopolistic and Restrictive Trade Practices Act of 1969.
The Provisions of The Competition Act, 2002
The Act takes stringent measures against anti-competitive agreements and abuse of dominant position by enterprises. Furthermore, it regulates combinations such as Mergers and Acquisition that are likely to cause a significant adverse effect on competition within India.
| Provisions | Description |
|---|---|
| Anti-competitive agreements | Prohibits any agreement that causes or is likely to cause appreciable adverse effect on competition within India. |
| Abuse of dominant position | Prevents an entity from directly or indirectly imposing unfair or discriminatory condition in purchase or sale of goods or services. |
| Mergers and Acquisition regulation | Any person or enterprise proposing to enter into a combination shall give notice to the Commission, disclosing the details of the proposed combination. |
The Role of Competition Commission of India
The central government established the Competition Commission of India in 2003, under the provisions of the Competition Act, 2002. Comprising of a Chairperson and 6 Members appointed by the Central Government, the CCI is vested with the responsibility to eliminate practices that have an adverse effect on competition. Its duties include promoting and sustaining competition, protecting consumer interests, and ensuring freedom of trade in the Indian markets. The Commission also provides opinions on competition issues on a reference received from a statutory authority established under any law. Lastly, it also strives to undertake competition advocacy, creating public awareness, and imparting training on competition issues.