TMI Blog2014 (4) TMI 586X X X X Extracts X X X X X X X X Extracts X X X X ..... mbrated above, it is evident that the opposite parties have failed to comply with the directions given by the DG in exercise of its powers under section 41(2) read with section 36(2) of the Act. The Commission is constrained to note that despite liberal indulgence shown by the DG to the opposite parties, the opposite parties engaged in dilatory tactics in order to procrastinate and prolong the investigations without any justifiable reason - Commission notes that no cause, much less any reasonable cause, was shown by the opposite parties save and except raising and advancing the pleas based on abstract propositions (broad and complex scope of investigations stretching to every facet of Google's businesses etc.) as noticed and detailed above. In fact, as noted earlier, the opposite parties have conceded the non-compliance with the requisitions made by the DG within the stipulated period - Commission has no hesitation in holding that the opposite parties have rendered themselves liable to be proceeded and punished in terms of the provisions contained in section 43 of the Act. When law casts an obligation upon the party to comply with a direction, the same needs to be complied with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to direct the Director General (DG) to cause an investigation to be made into the matter. Accordingly, the Commission vide its order dated 03.04.2012 directed the DG to investigate the matter and to submit its report. 3. Subsequently, another information viz. Case No. 30 of 2012 was filed by Consumer Unity Trust Society (CUTS) against Google, wherein it was also alleged that Google was abusing its dominant position by practices like search bias, search manipulation, denial of access and creation of entry barriers for competing search engines etc. 4. The Commission in this case also vide its order dated 20.06.2012 found prima facie the acts/conduct of Google to be in contravention of the provisions of section 4 of the Act and accordingly ordered investigation in this case as well. It was also noted by the Commission that since the allegations in the previous case also pertained to abusive conduct of Google in the online search engine markets, it was ordered that the subsequent information be clubbed with the previous case in terms of the provisions contained in proviso to section 26(1) of the Act read with regulation 27 of the Competition Commission of India (General) Regu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Director General (DG) for investigation. 2. Whereas pursuant to the aforesaid direction, the DG issued following notices to you to furnish certain information/documents within the stipulated time therein from the receipts of the said notice either by appearing in person or through an authorized representative: (i) Notice dated 12.02.2013 (ii) Notice dated 26.09.2013 (iii) Notice dated 11.10.2013 (iv) Notice dated 13.11.2013 (v) Notice dated 27.11.2013 (vi) Notice dated 03.12.2013 (vii) Notice dated 21.12.2013 3. Whereas you have failed to furnish the complete information as required by the DG within the stipulated time. 4. Whereas the Commission vide its order dated 13.02.2014 prima facie satisfied that there has been a non-compliance of the directions given to you by the DG in exercise of its powers conferred under section 36(2) of the Act. 5. You are hereby directed to show cause in writing within two weeks from the receipt of this notice as to why a penalty in terms of the provisions of section 43 of the Act be not imposed upon you. 6. That if no c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that given the broad contours of the investigations, which have expanded over time, and which currently stretch to nearly every facet of Google's businesses, the information requests issued by the DG have often been extremely wide-ranging. At times, these requests have been very broadly-worded and required the production of complex and technical information. Further, as the investigations have progressed, information requests have been issued with increasing frequency, often with short timeframes for response. This has made the process of collecting and presenting information in a timely and reader-friendly fashion even more challenging. 14. It was also contended that owing to the broad nature of the investigations, information requests have often been widely-worded and unspecific, potentially catching information not wholly relevant to the issues under investigation. It has been, in part, because of this that Google has invested significant time and resource in delivering presentations and submitting information voluntarily which would help the DG better understand Google's business. Coupled with the often technical nature of the information sought, making it ever more ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hlighted : (i) First, section 43 of the Act allows the Commission the discretion to find a breach and impose a penalty only in circumstances where a person fails to comply with a direction given by the Commission or the DG without reasonable cause . (ii) Second, in applying section 43, the Commission must also distinguish between belated compliance , and failure to comply (Kingfisher Airlines Limited v. Competition Commission of India Ors., order of COMPAT passed in Appeal No. 15 of 2012 dated 29.08.2012). (iii) Third, various courts in India have established that a penalty will not ordinarily be imposed unless the party against whom failure was alleged acted deliberately or in defiance of law or was guilty of conduct, contemptuous or dishonest conduct or acted in conscious disregard of its obligation. (Hindustan Steel Limited v. State of Orissa, 1969 (2) SCC 627). (iv) At no point has Google disregarded any requests for information. Delays have been minimal and, where occurring, have arisen for genuine reasons of complexity and scale. In each case, Google has responded to requests as soon as it has been practicable (including by responding in part) and has liai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 43 of the Act have not been met and a penalty is not merited. 20. The Commission has very carefully perused the material available on record besides examining the reply/written response tendered by the opposite parties to the show cause notice issued by the Commission under section 43 of the Act as also follow-up submissions of the opposite parties. The Commission has also heard at length the counsel for the opposite parties. 21. One of the contentions of the counsel appearing for the opposite parties relates to the DG widening the scope of investigation, particularly with respect to information sought on remote tech Adword accounts. The Commission, however, observes that the scope of the present investigations ordered under section 26(1) of the Act is very broad and encompasses various aspects relating to Google's policies with respect to online search advertising. Further, it is not limited to advertisers of any particular industry and would cover all who advertise on Google. Against this background, information sought by the Office of the DG with respect to the suspensions of Adword accounts of remote tech support advertisers, squarely falls within the ambit of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e issue related to exclusivity, the Office of the DG vide Question No. 1 of notice dated 13.11.2013 directed Google to furnish copies of agreements entered with certain parties as specified in the notice along with other details as enumerated therein. In response thereto, the opposite parties through their advocate vide letter /e-mail dated 25.11.2013 submitted part reply of the queries and sought an extension of seven days for submission of reply of remaining Query No. 1. Accordingly, the opposite party was granted time till 02.12.2013. On non-receipt of reply, the opposite parties were further reminded and directed to furnish reply by 06.12.2013. Again, it appears that the opposite parties vide letter dated 06.12.2013 sought extension up to 11.12.2013. Accordingly, they were granted time till 11.12.2013. On 11.12.2013, the opposite parties met the DG and expressed that they were pre-occupied to prepare for the deposition of the opposite parties scheduled on 16-18 December, 2013 and they would furnish the same after recording of statement. Again, notice vide e-mail dated 21.12.2013 was issued by the DG advising the opposite parties to submit requisite information by 26.12.2013. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard. 28. In view of the sequence of events adumbrated above, it is evident that the opposite parties have failed to comply with the directions given by the DG in exercise of its powers under section 41(2) read with section 36(2) of the Act. The Commission is constrained to note that despite liberal indulgence shown by the DG to the opposite parties, the opposite parties engaged in dilatory tactics in order to procrastinate and prolong the investigations without any justifiable reason. 29. In the circumstances, the Commission notes that no cause, much less any reasonable cause, was shown by the opposite parties save and except raising and advancing the pleas based on abstract propositions (broad and complex scope of investigations stretching to every facet of Google's businesses etc.) as noticed and detailed above. In fact, as noted earlier, the opposite parties have conceded the non-compliance with the requisitions made by the DG within the stipulated period. 30. In such circumstances, the Commission has no hesitation in holding that the opposite parties have rendered themselves liable to be proceeded and punished in terms of the provisions contained in section 43 of t ..... 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