By Ambika Khanna
Antitrust watchdog Competition Commission of India (CCI) lately launched an investigation into the new WhatsApp privacy policy (it permitted the platform to share metadata with parent corporation Facebook), even as the Ministry of Electronics and Information Technology (MeitY) has urged the Delhi High Court to restrain WhatsApp from implementing this.
In current years, the CCI has actively pursued alleged antitrust activities in the technologies sector. In January 2020, it launched an investigation into Amazon and Flipkart for abusing their dominant positions and carrying out acquisitions with the aim to stifle competitors and for employing predatory pricing techniques. The corporations have managed to get a keep on the CCI investigation from the Karnataka High Court. In October 2020, the CCI began a probe against Google for pre-installation of G-Pay on Android phones and for forcing exclusivity for in-app purchases. In yet another case in 2018, the CCI imposed a penalty of $20 million on Google for abusing its dominant marketplace position and for bias in search activities on the net.
The combined marketplace capitalisation of the 5 Big Tech corporations Facebook, Amazon, Apple, Microsoft and Google (FAAMG) in September 2020 was more than $6 trillion, more than double the GDP of India. In addition to the zero-monetary-price-to-customer method and the network effects principle, mergers and acquisitions by Big Tech across sectors have been important to their burgeoning development.
There’s practically nothing reprehensible about becoming significant and established. But it is the ‘how’ of their development that raised issues. Governments globally have questioned some of these investments alleging that their objective is to neutralise competitors, major to monopolisation and stifling of innovation. In December 2020, the US FTC along with 48 US states filed a case against Facebook alleging monopolisation and killing of competitors by generating big acquisitions such as that of Instagram in 2012 for $1 billion and WhatsApp in 2014 for $19 billion.
FAAMG have come below enhanced scrutiny for factors ranging from monopolistic behaviour and information privacy to content moderation and marketing policies. Australia introduced a media bargaining code in December 2020 to curb anticompetitive practices by Big Tech by mandating a payment structure involving the platform and news outlets. In the US, the House Judiciary Subcommittee on Antitrust, Commercial, and Administrative Law concluded right after an investigation in October 2020 that Big Tech have been indulging in anticompetitive practices by abusing their status as gatekeepers of the net.
The European Commission, in 2019, imposed a penalty of more than $1 billion (1.3% of its annual turnover in 2018) on Google for abusing its dominant position in on the web marketing. Google was located guilty of such as anticompetitive clauses in contracts with its vendors, restricting them from hosting rivals’ content.
China is playing catch-up with homegrown BAT (Baidu, Alibaba and Tencent). In December 2020, China’s antitrust regulator alleged that Alibaba violated the anti-monopoly law by getting into into contracts that demanded exclusivity from vendors. In March 2021, Tencent was fined $76,000 for not becoming transparent about its acquisitions.
India is attempting to update its regulation to deal with speedy-moving Big Tech. The Department for Promotion of Industry and Internal Trade introduced amendments to the FDI policy in 2018. It imposed embargoes on item exclusivity and prohibited inventory-based models for foreign e-commerce players. While Flipkart and Amazon protested, they did have to modify their organization models to align with the new regulations.
Globally, as the antitrust movement against Big Tech gathers steam, it is time to obtain strong options. Breaking-up Big Tech is not a sustainable lengthy-term resolution as this will merely open the door for a new set of dominant players—just as Blackberry and Yahoo had been replaced by FAAMG.
Governments will have to look at options that build a level-playing field, a fair marketplace and market customer welfare as properly as innovation in the market.
One such resolution is stricter merger handle, in addition to the monetary thresholds, by a nation’s antitrust watchdog prior to a merger or acquisition which will entail a detailed investigation such as a complete due diligence into a possible transaction by the regulator.
In India, as the government seeks to market the use and adoption of technologies across sectors, it will have to very first adopt a complete-of-government strategy. The tech sector will advantage immensely if policymakers across ministries align and expedite policymaking—from the MeitY on information protection (private and non-private information) and AI, to the Ministry of Commerce and Industry on e-commerce and FDI, to the Ministry of Home Affairs on national safety issues, to the CCI on antitrust and merger handle. This inter-ministerial collaboration can reap immense socio-financial rewards for the economy, resulting in policies that reflect the ‘new India’.
The author is senior researcher, International Law Studies Programme, Gateway House