Regulating tech giants in India- Explained

Recently Indian government issued a notice to Twitter after it restored more than 250 suspended accounts. On January 31st Twitter suspended these accounts as per the government’s order. These accounts were allegedly promoting misinformation about the farmer’s protests.

The tech giants with their power to influence the market, society, and governments are involved in unethical trade practices and antitrust activities all over the world. India is not an exception to them. This raises the important question to regulate tech giants in India.

Tech giants controversial practices in India:

First, The photo-sharing app of Facebook (Instagram) went into controversy in 2020. It failed to take any action over the controversy called Bois Locker Room (mostly run by Indian teenagers).

Second, Facebook employees themselves are questioning the procedure and content regulation practice of Facebook’s Indian team. 11 of its employees also wrote a letter to the Facebook management about the policy head decision to allow certain posts that spread hate and racial content.

Third, CCI (Competition Commission of India) initiated two antitrust investigations against Google in 2020. One for unfairly promoting its own payments app (Google Pay). The other for involving in anti-competitive practices by restricting companies from creating modified versions of Android OS for smart TVs.

Fourth, In 2019, the Enforcement Directorate (E.D.) commenced its investigation into alleged violations by Amazon and Flipkart for their prohibition of FDI in business-to-consumer (B2C) enterprises except where specific conditions are met.

Fifth, Twitter displayed a map of Leh as part of China and later as part of Jammu and Kashmir state (instead of a separate Union Territory). For that , a legal notice has been served to Twitter.

Impact of Tech giants in India:

First, the usage of the targeted algorithm: tech giants are using users’ search data to push advertisements to the users. The ads are specifically targeted to users based on their recent search over the internet.

Second, there is a lack of transparency in the way tech companies process user data. This has raised serious privacy concerns and also created anti-trust investigations by various governments. The Cambridge Analytica scandal of Facebook is one such example. The recent WhatsApp privacy policy also created widespread concern.

Third, the tech giants involved in predatory pricing and monopolistic trade practices. They usually drive out competitors using anti-competitive behaviour. For example, accusations on Amazon favouring their self-branded products over third-party products.

Fourth, the impact on big tech giants on society. The big techs are the foremost medium of fake news, hate speech, etc. These were seen as un-democratic activities by countries.

Fifth, their potential to influence the country. The combined market capitalization of the big techs is more than the GDP of most countries except China and the USA. The sheer economic presence and their market presence (like Google handles more than 90% of online searches) make them create aggressive clauses in their terms and conditions, contract agreements etc.

How India is regulating big Techs?

First, The government enacted the Competition Act, 2002. The Act established the Competition Commission of India (CCI). Later the Act was amended in 2007. The CCI has been established to eliminate practices having an adverse effect on competition. The commission also promotes and sustain competition, protect the interests of consumers. The CCI will step in if any of the tech giants will get involved in the anti-competitive practice.

For example, In 2018, the CCI concluded its investigation into Google’s advertising policies. The CCI declared that Google had abused its dominant position and involved in the anti-competitive practice. The CCI also imposed fine on Google of Rs.136 crore.

Second, The Information and Technology Act, 2000 govern all activities related to the use of computer resources in India. Some of the important provisions of the Act are

  • Section 69 of the Act gives power to the government to issue directions “to intercept, decrypt or monitor…any information generated, transmitted, received or stored” in any digital equipment.
  • Section 69A of the Act provides power to the government to block access to any information generated, transmitted, received or stored or hosted in the digital space.
  • Intermediaries (providers of network service, telecom service, Internet service and web hosting) are required to preserve and retain specified information. They also have to obey the directions issued by the government from time to time.
  • In return intermediaries are protected from legal action for user-generated content (The big techs used this clause to move away from liability and responsibility in digital space).

Challenges in regulating big techs:

First, smartphones and the Internet of Things (IoT) have become a major driver for the growth of big tech companies in the last decade. India is currently witnessing a massive growth in smartphone usage and IoT. India is also witnessing  increase in the population of users who are coming online for the first time. So regulating Big Techs strictly will leave the consumer with no other alternative. Hence, it is important to cater to the needs of people.

Second, everyday life is dependent on various apps and technologies. Nowadays technology is linked with remote working and studying, public transport, shopping, telemedicine, on-demand music, and video streaming, etc. Tech giants with their presence in digital space created a monopoly in essential services.

Third, the essential nature of the services provided by them. These tech giants provide Freedom of Expression to individual and also made billions of people to depend on their services. Like, Google on the internet, Amazon on e-commerce etc.

Fourth, the challenge of cross-platform connectivity: Users of Facebook and Google can sign in and access services over food, grocery delivery, and various other companies. This can be used to mine the accounts of users. This creates a challenge to regulate the tech giants alone. To get a proper desired output, one need to regulate the entire ecosystem. But it is not feasible.

Suggestions to regulate Big Techs:

It is essential to strengthen the Competition Law. In this regard, the Competition Law Review committee has recommended the following:

  • First, an introduction of a ‘Green Channel’: This is to enable fast-paced regulatory approvals for the vast majority of mergers and acquisitions that have no concerns regarding adverse effects on competition.
  • Second, introducing a dedicated bench in NCLAT (National Company Law Appellate Tribunal) to hear appeals under the Competition Act.
  • Third, opening up of CCI offices at the regional level: This will help to carry out non-adjudicatory functions and interaction with State Governments in controlling the Big Techs.

Recently in the US also House of Representatives panel submitted the report of a bipartisan investigation into the working of Big Techs. They recommended,

  • First, the Structural separations of the big techs: By breaking big tech’s companies into many smaller ones. This will reduce their undue influence over the digital market space.
  • Second, to prohibit mergers and acquisitions : putting a “presumptive prohibition” against big tech companies.
  • Third, companies should be prohibited from operating in an “adjacent line of business”.

Considering the size of the Indian economy which is in the top five Economies of the World, controlling Big Tech is the key to ensure fair competition. The need of the hour is the passage of the Personal Data Protection Bill along with the incorporation of the recommendations of the Competition Law Review Committee and exploring the possibility of implementing the US House of Representatives panel’s report.

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