Regulating Big Tech Companies in India and the world
Kartavya Desk Staff
#### GS Paper 3
Syllabus: Governance
Source: IE
Context: The US has recently initiated actions against Big Tech, particularly Google, which has emboldened other countries like India to address similar disputes with tech giants.
What are Big-Tech Firms?
Big Tech firms refer to large technology companies that dominate their respective sectors, wielding significant influence and control over digital platforms and services. These companies typically operate on a global scale and are characterized by their immense market capitalization, extensive user base, and diverse portfolio of products and services. Examples of Big Tech firms include
• Google (controls the majority of online search traffic and digital advertising revenue)
• Amazon ( dominates e-commerce and cloud computing)
• Apple (iPhone, iPad, and MacBook,)
• Facebook (Meta) (Leads the social media landscape )
• Microsoft (software, hardware, and cloud services)
Need for Regulations:
• Arbitrary Pricing: Big Tech’s influence on pricing rules in the digital space, leads to concerns about fairness and competition.
• Regulatory Vacuum: Challenges faced by regulators in keeping pace with rapid tech innovation, leading to reactive rather than proactive measures.
• Data Collection and Privacy Concerns: Big Tech’s extensive data collection practices raise privacy, surveillance, and data security issues.
Specific concerns related to the functioning of Big Tech Firms:
Concerns | Description
Prioritizing In-House Services | Allegations against Alphabet, Apple, and Meta for steering customers towards their in-house services over competitors’, potentially limiting consumer choice. E.g., Apple priorities its App Store and Safari browser in its services
Non-Compliance with DMA of EU | Alphabet, Amazon, Apple, ByteDance, and Microsoft were designated as ‘gatekeepers’ under the Digital Markets Act (DMA) (in 2023) and investigated for non-compliance.
Discriminatory Approach | The European Commission is investigating Google for potential bias in search results, focusing on whether the company favours its own services over competitors.
Competition Competition of India has launched a probe into Google’s Play Store pricing policy for alleged discriminatory practices.
Reducing Choices for Customers | In October 2020, the US Department of Justice accused Google of unlawfully maintaining monopolies in search and search advertising markets through anti-competitive practices. They claimed it harmed consumers by limiting search quality, reducing choices, and stifling innovation.
Ecosystem Captivity | The European Commission is investigating whether Apple allows users to uninstall pre-installed apps, change default settings, and choose alternatives easily on iOS. They’re concerned that Apple’s practices might limit user choice within its ecosystem, leading to ecosystem captivity.
Concerns Over ‘Binary Choice’ of Meta | Meta introduced a subscription model in the EU, EEA, and Switzerland, allowing users to use Facebook and Instagram without ads or continue using them for free with personalized ads. Regulators found the model’s “binary choice” insufficient in providing a real alternative for users who don’t consent, failing to prevent data accumulation by gatekeepers.
Antitrust Concerns | E.g., Facebook (Meta) is facing antitrust lawsuits and probes for acquiring potential competitors like Instagram and WhatsApp, along with concerns about its control over digital advertising and social networking markets.
Amazon is under antitrust scrutiny for its treatment of third-party sellers, predatory pricing allegations, and potential conflicts of interest as both a retailer and a marketplace operator.
Antitrust laws aim to promote fair competition, prevent monopolistic practices, and ensure consumers have access to a variety of high-quality products at fair prices.
Existing governance frameworks in place to regulate technologies for responsible use:
• Competition Act, 2002 and Competition Commission of India (CCI): The Competition Act, 2002 is the primary legislation governing antitrust issues (unfair competitive practices) in India for regulating Big Tech companies. CCI is responsible for checking monopolistic practices and ensuring fair competition. g., Recently CCI imposed heavy penalties on misuse of Google’s dominant position in the online search market
• CCI is responsible for checking monopolistic practices and ensuring fair competition.
• g., Recently CCI imposed heavy penalties on misuse of Google’s dominant position in the online search market
• Competition Amendment Bill, 2022: It mandates the Competition Commission of India (CCI) to establish regulations for assessing if an enterprise has significant business operations in India. This strengthens the Commission’s review process, particularly in digital and infrastructure sectors, previously underreported due to lower asset or turnover values not meeting jurisdictional thresholds.
• Information Technology Act, 2000: The Act provides a legal framework for electronic governance by giving recognition to electronic records and digital signatures. However, the act is old and doesn’t cover all aspects of technology misuse.
• However, the act is old and doesn’t cover all aspects of technology misuse.
• National Regulatory Frameworks: E.g. The National Strategy for Artificial Intelligence (2018)
• Industry Self-regulation: Technology companies often develop their own codes of conduct and industry standards to govern the responsible use of technologies. Self-regulation can provide flexibility and adaptability to rapidly evolving technologies. However, it may lack enforceability and uniformity across different industries and regions. E.g. self-regulation of OTT platforms
• However, it may lack enforceability and uniformity across different industries and regions.
• E.g. self-regulation of OTT platforms
• Multi-stakeholder Initiatives: Collaborative efforts involving governments, businesses, civil society organizations, and academia play a crucial role in technology governance. These initiatives focus on dialogue, knowledge sharing, and best practice development. Examples include the Global Network Initiative (GNI) and the Partnership on AI (PAI).
• Examples include the Global Network Initiative (GNI) and the Partnership on AI (PAI).
• The RBI’s ‘Payments Vision 2025’ aims to regulate big tech and fintech in the payments sector.
Regulation of tech companies in other countries:
Country | Mechanism | Description
Europe | Digital Markets Act (DMA) and Digital Services Act (DSA) | The Digital Markets Act (DMA) aims to ban harmful business practices by large digital players, creating a fairer and more competitive economic space. The Digital Services Act (DSA) targets various online services, including websites, internet infrastructure services, and online platforms.
USA | Anti-trust legislation | The United States has adopted anti-trust legislation to address the dominance of Big Tech companies. These measures include giving states greater power in competition cases and increasing funding for federal regulators.
Australia | Competition watchdog recommendations | The competition watchdog in Australia has recommended tighter regulations for Facebook and Google to improve media competition.
Additionally, the Online Safety Act grants the power to force social media companies to delete posts constituting online bullying and imposes fines on companies and hosts involved in the alleged abuse.
Global cooperation can contribute to the development of global standards for technology governance in the following ways:
• Information Sharing and Best Practices: E.g, India can adopt legislation similar to the EU’s Digital Services Act to regulate India’s service marketplace.
• Harmonization of Standards: Global cooperation can facilitate the harmonization of standards across countries and regions g., Algorithmic Accountability, to identify, assess and penalise harmful algorithmic amplification by Tech companies
• Capacity Building and Technical Assistance: Global cooperation supports capacity-building efforts in developing countries by providing technical assistance and knowledge transfer.
• Norm Setting and Policy Guidance: These norms can address issues such as AI ethics, privacy protection, autonomous systems, and digital rights.
• Multilateral Governance Mechanisms:g., for regulating the flow of funds, drugs, etc. using the Dark Web and other unregulated technology networks.
The Standing Committee on Finance submitted its report on ‘Anti-Competitive Practices by Big Tech Companies’ in December 2022.
Key observations and recommendations include:
• Regulating Digital Markets: Evaluate competitive behaviour in digital markets before monopolization occurs, suggesting the identification of Systemically Important Digital Intermediaries (SIDIs) and yearly reporting to the Competition Commission of India (CCI).
• Digital Competition Act: Introduce legislation to ensure a fair digital ecosystem.
• Self-Preferencing: SIDIs must not favour their own services over competitors’ on their platforms.
• Data Usage: SIDIs should handle user data responsibly, avoiding merging data from core services without consent and restricting data access to third-party services.
• Revamping CCI: Strengthen the CCI with a specialized digital markets unit to monitor SIDIs and address anti-competitive behaviour.
• Third-Party Applications: SIDIs should allow and technically enable the use of third-party applications without transferring data to foreign governments.
• Bundling and Tying: SIDIs should not force users to subscribe to additional services to use their core platform.
• Anti-Steering: SIDIs should not restrict business users from steering customers to offers outside the platform.
Conclusion
Collaborative efforts can help address the challenges posed by emerging technologies, promote ethical and responsible technology use, and ensure a globally inclusive and sustainable digital future.
Insta Link:
RBI to regulate bigtech and fintech
Mains Link:
There is growing support for regulating big tech companies such as Facebook and Google. Discuss the reasons. (15M)
Prelims Link:
With reference to ‘consumers’ rights/privileges under the provisions of law in India, which of the following statements is/are correct? (UPSC 2012)
• Consumers are empowered to take samples for food testing.
• When a consumer files a complaint in any consumer forum, no fee is required to be paid.
• In case of death of consumer, his/her legal heir can file a complaint in the consumer forum on his/her behalf.
Select the correct answer using the codes given below:
(a) 1 only (b) 2 and 3 only (c) 1 and 3 only (d) 1, 2 and 3
Ans: C