- In February, an Indian government panel introduced the “Digital Competition Bill” to prevent big tech companies from overpowering the market. It aims to create a fair playing field for everyone.
- However, the bill has been opposed by tech giants like Apple, Google, and Amazon, who feel that it will make operating in the country difficult for them and ultimately raise the prices for users.
- At the same time, though, the bill has received support from 40 Indian startups that want to rid the market of monopolistic practices.
India’s proposed EU-like competition law has been met with severe opposition from a U.S. lobby group consisting of tech giants like Google, Apple, and Amazon. These companies argue that implementing a law like this will ultimately harm Indian users, who might have to deal with increased prices for the same products.
The proposed “Digital Competition Bill” was introduced in February this year by an Indian government panel that believes certain companies have too much power over the market and that they’re making it difficult for smaller rival companies (Indian companies, to be precise) to compete.
Although there are existing laws to address this unbalanced power dynamic, the Indian government finds them too time-consuming to implement. The new set of rules will be expected to work along with the existing regulations.
What Do India’s New Regulations Suggest?
Inspired by the Digital Markets Act 2022, the new set of competition rules will target global companies that have at least 10 million users in India and a total of $30 billion in annual revenue.
It would stop them from:
- Unfairly promoting their products over others.
- Using the data they collect from their users to gain an unfair advantage over their competitors.
- Imposing restrictions on downloading third-party apps.
If a company violates these rules, it will be liable to pay a fine of up to 10% of its global annual turnover.
Concerns from Big Tech
Most of the above-mentioned tech companies are already struggling to deal with the regulations they face from the EU. If India imposes a similar law, it would make it difficult for them to smoothly operate in India—a country that houses a significant portion of their business.
Opposing the bill, the lobby has argued that:
- A bill like this might force them to reduce the range of services they offer in India.
- Since operating in India will be difficult, they might hesitate to make any big investments in the country.
- Abiding by the new laws will be expensive for the companies, which might end up making their services and products expensive for the users.
The US-India Business Council (USIBC), which is a part of the US Chamber of Commerce, wrote a letter to the Corporate Affairs Industry (that’s working on this bill) on May 15, asking it to reconsider the bill.
However, it’s important to note that not everyone is against the new set of rules. While US companies have been strongly opposing it, a group of 40 Indian startups have pledged their support for it. They all want a free and fair market where everyone gets equal opportunities.
The Sudden Need for These Rules
India has a massive population of around 1.44 billion people, which makes it a lucrative market for all companies, especially those in the tech space. However, lately, several tech giants have resorted to unfair means to gain an edge over their rivals.
For example, the Competition Commission of India (CCI) has been investigating many industry leaders for years, and in 2022, it found that Google has been restricting users from removing pre-installed apps. Although the company said that it was for the safety of the users, it was still fined $161 million.
Furthermore, Google also came under heavy public scrutiny in early March when it delisted a number of Indian matrimony apps from the Google Play Store over service fee payments.
Amazon has also been accused of favoring only a few selected sellers for the Indian version of its site. Apple, too, has been accused of abusing its dominant position in the market—in fact, it’s being sued by the EU for the same. It’s worth noting, though, that both Google and Apple have denied the allegations thrown at them.
Speaking of when the bill can be expected to be implemented, there’s no fixed timeline for the implementation as of now. However, it will be reviewed by the Indian government first before being sent to the parliament for a vote.
