Antitrust Case Against Google: USA

Why in News

Recently, the US Justice Department has sued Google, accusing the company of illegally abusing its dominance in internet search in ways that harm competitors and consumers.

• The lawsuit (or antitrust action against the company) comes after a report by the US House of Representatives panel that found Google and three other tech giants -- Facebook Inc, Apple Inc and Amazon.com Inc — all abused their power as gatekeepers in the digital economy to thwart competitive threats.

Key Points

• US Government’s Stand:
  
  • Google is illegally protecting its dominant position in the market for search and search advertising with the deals it has struck with companies like Apple.
    
    • Google pays Apple billions of dollars a year to have its search engine set as the default option on iPhones and other devices.
  • Challenges contracts that Google has with smartphone makers that use Google’s Android operating system, requiring them to install its search engine as the default.
  • All this stifles competition and innovation from smaller upstart rivals to Google and harms consumers by reducing the quality of search and limiting privacy protections and alternative search options.
    
    • Many countries have broad laws that protect consumers and regulate how companies operate their businesses. The goal of these laws is to provide an equal playing field for similar businesses that operate in a specific industry while preventing them from gaining too much power over their competition. These are called antitrust laws.
  • Investigated Google’s behavior and acquisitions in the overall market for digital advertising, which includes search, web display and video ads.
    
    • Online advertising was the source of virtually all of Alphabet’s USD 34 billion in profit last year. Alphabet Inc. is Google’s parent company.
  • Most of Google’s services are offered for free in exchange for personal information that helps it sell its ads.
    
    • Goods that are free to consumers are not exempt from antitrust oversight.
    • In the landmark Microsoft case of the late 1990s, the software giant bundled its web browser for free into its dominant Windows operating system.
    • Microsoft lost because, using restrictive contracts, it bullied personal computer makers and others to try to prevent them from offering competing web browser software — competition that could have undermined the Windows monopoly.
• Google’s Defense:
  
  • The deals that the Justice Department is citing are entirely legal. Such company-to-company deals violate antitrust law only if they can be shown to exclude competition.
    
    • Users can freely switch to other search engines, like Microsoft’s Bing or Yahoo Search, anytime they want. Google’s search service is the runaway market leader because people prefer it.
  • Further, its services have helped hold down the prices of smartphones.
• Report by the US House of Representatives panel:
  
  • Big Tech Companies like Google, Facebook, Amazon and Apple act as a “gatekeeper”, i.e. can control access to information.
    
    • Gatekeepers can also decide whether a message will be spread to a wider audience.
  • These companies not only wield tremendous power, but also abuse it by charging exorbitant fees, imposing oppressive contract terms, and extracting valuable data from the people and businesses that rely on them.
  • Companies ran the marketplace for their respective domains, while also competing in it and to ensure they retain the number one position, the companies have restored to “self-preferencing, predatory pricing, or exclusionary conduct”.
    
    • Self-preferencing involves actions by an undertaking which are designed to favour its own products or services over those of its competitors.
    • Predatory pricing is an act of setting prices low in an attempt to eliminate the competition.
    • Exclusionary conduct is a conduct that creates or maintains monopoly power by disadvantaging and harming competitors.
• Significance:
  
  • The step is a response to the policy question of what measures, if any, should be taken to curb today’s tech giants, which hold the power to shape markets, communication and even public opinion.
  • The US Justice Department has come up with the possibility of structurally breaking up Google, and not just imposing conditions on its behavior as has happened in Europe.
    
    • Critics contend that multibillion-dollar fines and mandated changes in Google’s practices imposed by European regulators in recent years weren’t severe enough and that structural changes are needed for Google to change its conduct.

Scenario in India

• Various antitrust probes are going on against Google in India. Google has had run-ins with regulators, especially the Competition Commission of India (CCI).
• In the last two years, the CCI has raised issues with Google’s commercial flight search option, its dominant position in the search marketplace, the abuse of its dominant position in the Android phone and smart television market, and others.
  
  • In 2019, for example, CCI had held Google guilty of misuse of its dominant position in the mobile Android market and said the company had imposed “unfair conditions” on device manufacturers to prevent them from using other operating systems.
• Recently, Google has also been accused of following a high and unfair commission mechanism for apps listed on its Play Store.

Way Forward

• With this lawsuit, the big tech companies are likely to come under more scrutiny from regulators including the CCI in India.
• In coming years, as India plans to regulate the use of personal and non-personal data, these tech companies could face scrutiny over how they manage and use the data they collect from users in India.

Source: TH

FDI Inflow

Why in News

During April to August, 2020, total Foreign Direct Investment (FDI) inflow of USD 35.73 billion was received. It is the highest ever for the first 5 months of a financial year.

• FDI inflow has increased despite Gross Domestic Product (GDP) growth contracted 23.9% in the first quarter (April-June 2020).

Key Points

• Recent Increase in FDI Inflows:
  
  • FDI (USD 35.73 billion) received in the first 5 months of 2020-21 is 13% higher as compared to the first five months of 2019-20 (USD 31.60 billion).
    
    • Total FDI inflow grew by 55%, i.e. from USD 231.37 billion in 2008-14 to USD 358.29 billion in 2014-20.
  • FDI equity inflow (one of the three components of FDI) received during April to August, 2020 was USD 27.10 billion. It is also the highest ever for the first 5 months of a financial year and 16% more compared to the first five months of 2019-20 (USD 23.35 billion).
  • Measures taken by the Government on the fronts of FDI policy reforms, investment facilitation and ease of doing business have resulted in increased FDI inflows into the country.
    
    • According to the World Investment Report 2020 by the UNCTAD, India was the 9^th largest recipient of FDI in 2019.
• Government Measures to increase FDI:
  
  • In 2020, schemes like production-linked incentive (PLI) scheme for electronics manufacturing, have been notified to attract foreign investments.
  • In 2019, the Central Government amended FDI Policy 2017, to permit 100% FDI under automatic route in coal mining activities.
  • Further, the government permitted 26% FDI in digital sectors. The sector has particularly high return capabilities in India as favourable demographics, substantial mobile and internet penetration, massive consumption along with technology uptake provides great market opportunity for a foreign investor.
  • FDI in manufacturing was already under the 100% automatic route, however in 2019, the government clarified that investments in Indian entities engaged in contract manufacturing is also permitted under the 100% automatic route provided it is undertaken through a legitimate contract.
    
    • Contract Manufacturing: Production of goods by one firm, under the label or brand of another firm.
  • Foreign Investment Facilitation Portal (FIFP) is the online single point interface of the Government of India with investors to facilitate FDI. It is administered by the Department for Promotion of Industry and Internal Trade, Ministry of Commerce and Industry.
• Increase in FDI Inflows is further Expected:
  
  • As foreign investors have indicated interest in the government’s moves to allow private train operations and bid out airports.
    
    • In March 2020, Government permitted non-resident Indians (NRIs) to acquire up to 100% stake in Air India.
  • Valuable sectors such as defence manufacturing where the government enhanced the FDI limit under the automatic route from 49% to 74% in May 2020, could also attract large investments going forward.

Way Forward

• Foreign Direct Investment (FDI) is a major driver of economic growth and an important source of non-debt finance for the economic development of India. A robust and easily accessible FDI regime, thus, should be ensured.
• Economic growth in the post-pandemic period and India’s large market shall continue to attract market-seeking investments to the country.

Source: TH

Punjab Assembly Rejects Centre’s Farm Laws

Why in News

Recently, Punjab became the first State in the country to formally reject the Central government’s three Farm Acts by passing three Bills to negate the Union laws.

• It also rejected the proposed Electricity Amendment Bill and demanded their immediate annulment.

Key Points

• Punjab State Bills: The Punjab assembly introduced three farm Bills:
  
  • The Farmers Produce Trade and Commerce (Promotion and Facilitation) (Special Provisions and Punjab Amendment) Bill, 2020.
    
    • It seeks to ensure that sale or purchase of wheat or paddy in Punjab is not allowed below the Minimum Support Price (MSP).
    • It also seeks to provide for punishment for harassment of farmers or payment of less price to the farmers.
  • The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services (Special Provisions and Punjab Amendment Bill, 2020.
    
    • It provides for imprisonment of not less than three years and fines for sale-purchase of wheat or paddy under a farming agreement below the MSP.
  • The Essential Commodities (Special Provisions and Punjab Amendment) Bill, 2020.
    
    • It prevents hoarding and black-marketing of agricultural produce and seeks to ensure status quo ante with regard to implementation of the Central Act namely, ‘The Essential Commodities (Amendment) Act, 2020’.
  • While the central law abolished any market fees or licences for private players outside the APMCs, the Punjab bills have reintroduced it.
    
    • These fees will go towards a fund for the welfare of small and marginal farmers.
  • The Assembly also introduced Code of Civil Procedure (Punjab Amendment) Bill, 2020.
    
    • It seeks to exempt agricultural land not exceeding 2.5 acres from Section 60 of The Code of Civil Procedure, 1908, which provides for attachment of various properties - moveable and immoveable in execution of decree (judgement).
    • It also seeks to exempt the Properties of the farmers such as cattle, implements, cowsheds, etc from attachment.
    • These exemptions are provided, given the farmers’ apprehension about attachment-decree of their land as a consequence of enforcement of farming contracts.
• Rationale:
  
  • The Central laws were aimed to do away with government interference in agricultural trade by creating trading areas free of middlemen and government taxes outside the structure of Agricultural Produce Market Committees (APMCs).
  • This according to farmers was giving preference for corporate interests at the cost of farmers’ interests and a lack of regulation in these non-APMC mandis were a cause for concern for farmers.
  • The absence of any regulation in non-APMC mandis was seen as a precursor to the withdrawal of the guarantee of MSP-based procurement.
  • To annul the apprehensions of farmers, the Punjab government has changed the application of central laws to the state. It will restore the agricultural safeguards for the farmers through the regulatory framework of Punjab Agricultural Produce Markets Act, 1961.
    
    • However, there are apprehensions that this step taken by the Punjab Government may discourage private players to buy at rates less than MSP.
  • The Punjab government states that 86.2% of farmers in the state are small and marginal, with the majority owning less than two acres of land. Consequently, they have limited access to multiple markets, and lack the negotiation power needed to operate in a private market.
  • The Bills also point out that agriculture, agricultural markets, and land is the primary legislative domain of the state.

Source: TH

Taiwan Insecurity of China

Why in News

Recently, China has objected to any official exchanges between India and Taiwan.

Key Points

• Chinese Concern: The statement from China came in response to reports that India and Taiwan were considering going forward with talks on a trade deal.
  
  • China believes the 'One-China principle’ is a universal consensus of the international community, including India.
  • China also objected to the recent campaign (posters and social media) in India wishing Taiwan “Happy National Day” (October 10) and referring to it as a “country” or a “nation”.
  • China is also opposing inclusion of Australia in the upcoming Malabar naval exercise with India, Japan and the United States.
• India-Taiwan Relations
  
  • India and Taiwan do not maintain formal diplomatic relations. The areas of cooperation between India and Taiwan have been limited due to negligible political relations.
  • From 1995 to 2014, the bilateral trade turnover has grown manifold from just $934 million to $5.91 billion.
  • Technology: In the field of science and technology, there are more than thirty ongoing government-funded joint research projects.
    
    • In August 2015, the Taiwan-based Foxconn, one of the largest hardware manufacturers in the world, announced an investment of $5 billion in India.
    • India and Taiwan in 2018 signed a bilateral investment agreement. India-Taiwan trade ties have been expanded and Taiwanese firms are prominent investors in India,
    • Taiwan has for long been a world leader in high-tech hardware manufacturing, and can contribute much to the “Make in India”, “Digital India” and “Smart Cities” campaigns.
    • Taiwan’s agro-technology and food processing technology can also be very beneficial for India’s agriculture sector.
  • Both sides have also expanded educational exchanges after a mutual degree recognition agreement in higher education was signed in 2010.
• Challenges:
  
  • One China policy: India finds it difficult to realise the full potential of its bilateral relationship with Taiwan. At present, about 16 countries worldwide continue to recognise Taiwan as an independent state. India is not among the sixteen countries.
  • Trade & Investment: The economic exchange is still relatively insignificant. Taiwan’s share of trade with India is around 1% of its global trade.

Way Forward

• Taiwan has invested heavily on China studies. India should take advantage of this fact. Resource rich India can benefit from Taiwan’s technology. For instance, India has abundant natural bamboo resources while Taiwan owns the world-class bamboo charcoal technology. With this sort of technology, India can make use of its bamboo resources to produce high value-added goods.
• With the recent appointment of a senior diplomat to serve as the new envoy to Taiwan, India has signalled a shift in its One-China policy (although not officially abandoned) a clear indication of taking forward the diplomatic relationship with Taiwan.

Source: TH

Environmental Clearance to Kaleshwaram Project Invalid

Why in News

Recently, the National Green Tribunal (NGT) has declared that the environmental clearance (EC) granted to the Kaleshwaram Lift Irrigation Project in Telangana was ex post facto (i.e. granted after completion of substantial work) and illegal.

Key Points

• Issues in the Project:
  
  • The petition filed in 2018 stated that while the Kaleshwaram Project was a lift irrigation system, the state government wrongly claimed, until the grant of environmental clearance (EC), that the project was not for lift irrigation, but only for drinking water supply.
  • Substantial work of the project had already been undertaken before granting of EC in December 2017. Thus, the EC was ex post facto, in violation of the Environmental Impact Assessment (EIA) Notification, 2006.
    
    • The Ministry of Environment, Forest and Climate Change (MoEFCC) had published the draft Environmental Impact Assessment (EIA) notification 2020, with the intention to replace the existing EIA Notification 2006 under the Environment (Protection) Act, 1986.
    • The draft notification has provisions for post facto project clearance, reiteration of a March 2017 notification for projects operating without clearance.
  • The Project also underwent change by increase in capacity and inclusion of Mission Bhagiratha to provide drinking water to Hyderabad and certain villages of Telangana.
    
    • However, the pre-feasibility report submitted in January, 2017 and draft of EIA report submitted in July, 2017 did not mention the Mission Bhagiratha which involved interlinking of the two projects.
    • Feasibility of the changed project was never evaluated while granting EC.
• NGT’s Observation: There are two legal issues confronting the Project:
  
  • One, Kaleshwaram Lift Irrigation Project was functioning without requisite prior environmental clearance under EIA Notification, 2006, until 2017, when the EC was granted.
  • Second, project contractor L&T was alleged to have cleared large areas of forest land for construction of quarters for its employees, without requisite forest clearance under the Forest (Conservation) Act, 1980.
  • The NGT directed that until the Telangana government obtains final forest clearance, it should stop all work except the drinking water component.
  • It has further asked MoEFCC to consider measures to prevent recurrence of such violations where EC is sought ex post facto.
    
    • It is particularly required when the projects are multi-purpose and part of it requires EC, so that such requirement is not defeated on specious plea that the project was partly not covered by the schedule Environmental Impact Assessment (EIA) Notification as has happened in the present case.
  • It observed that accountability of the responsible person needs to be fixed and remedial measures has to be taken.
    
    • For that purpose, it has directed the MoEFCC to constitute a seven-member expert committee.
    • The expert committee could assess the extent of damage caused in going ahead with the project without EC – the period from 2008 to 2017 — and identify the necessary restoration measures.
    • The expert committee must be constituted within a month and needs to complete its exercise within six months.

Source: IE

Extending New START Treaty

Why in News

The Russian President has proposed extending by one year the New START (Strategic Arms Reduction Treaty) between the USA and Russia expiring in February 2021.

Key Points

• The New START Treaty: It is a treaty between the United States of America and the Russian Federation on measures for the further reduction and limitation of strategic offensive arms.
  
  • It entered into force on 5^th February, 2011.
  • New START has replaced the 1991 START I treaty, which expired December 2009, and superseded the 2002 Strategic Offensive Reductions Treaty (SORT), which terminated when New START entered into force.
  • It is a successor to the START framework of 1991 (at the end of the Cold War) that limited both sides to 1,600 strategic delivery vehicles and 6,000 warheads.
  • It continues the bipartisan process of verifiably reducing the USA and Russian strategic nuclear arsenals by limiting both sides to 700 strategic launchers and 1,550 operational warheads.
  • It will lapse in February 2021 unless extended for a five-year period.
• Recent Proposal: Russia has extended the proposal along with concerns of lack of interest from the United States.
  
  • In 2019, the United States has also suspended the Intermediate-Range Nuclear Force Treaty (INF Treaty) with Russia.
    
    • It was a nuclear arms-control accord reached by the United States and the Soviet Union in 1987 in which the two nations agreed to eliminate their stocks of intermediate-range and shorter-range (or “medium-range”) land-based missiles (which could carry nuclear warheads).
    • The United States withdrew from the Treaty on 2^nd August 2019.
  • USA’s Stand: The USA wanted any replacement treaty should include China and to encompass all of Russia’s nuclear weapons — not just the “strategic” weapons covered under New START but also Russia’s sizable stockpile of smaller, “tactical” nuclear weapons that fall outside the treaty.
    
    • Russia rejected the demands, and China has refused to take part in negotiations.
  • The USA has agreed to negotiate the extension.

Way Forward

• Negotiators would still need to work out a verification system and agree on the detailed definition of a warhead. Failure to do so would remove the main pillar maintaining the nuclear balance between them.
• If the treaty is not extended or replaced, the world’s two biggest nuclear powers will return to an era without substantive restraints on their arsenals for the first time in decades.
• An extension would mark a rare bright spot in the fraught US-Russian relationship. The time bought by extending New START can be used for conducting comprehensive bilateral negotiations on future control over nuclear missile weapons.

Source: TH

Nazca Lines: Peru

Why in News

Recently, a giant cat geoglyph was discovered on a hill at the famous Nazca Lines site in Peru.

Key Points

• The Nazca Lines:
  
  • These are a group of geoglyphs known for the depictions of larger-than-life animals, plants and imaginary beings.
    
    • Geoglyphs are the large designs made on the ground by creators using elements of the landscape such as stones, gravel, dirt or lumber.
  • These are believed to be the greatest known archaeological enigma, owing to their size, continuity, nature and quality.
  • The site is around 450 km away from capital Lima.
  • Drawn more than 2 millennia ago on the surface of southern Peru’s arid Pampa Colorada, the geoglyphs feature different subjects, but mainly plants and animals.
    
    • The figures include pelicans (the largest ones sized around 935 feet long), Andean Condors (443 feet), monkeys (360 feet), etc.
    • Variety of geometric shapes such as triangles, trapezoids and spirals, and some have been associated with astronomical functions.
  • Discovery and Heritage Site: The Lines were first discovered in 1927, and were declared a World Heritage Site by UNESCO in 1994.
• The Cat Geoglyph:
  
  • Cultural Linkage: It dates from 500 BC – 200 AD (Paracas age). The cat geoglyph is believed to be older than the ones previously found at Nazca.
    
    • The Paracas culture was an Andean society existing between approximately 800 BCE and 100 BCE, with an extensive knowledge of irrigation and water management. It was in present day Peru in the Paracas Desert region.
    • Representations of felines of this type are frequent in the iconography of ceramics and textiles of the Paracas society.

Source: IE

India International Science Festival 2020

Why in News

The 6^th edition of the India International Science Festival (IISF) will be held virtually in 2020.

• The 5^th edition was held in Kolkata in 2019.

Key Points

• IISF: It is a festival to celebrate the achievements of India’s scientific and technological advancements with students, innovators, craftsmen, farmers, scientists and technocrats from India and abroad.
  
  • It was launched in 2015 to promote Science and Technology and demonstrate how science could lead India towards a developed nation within a short span of time.
• Aim: To engage the public with science and celebrate the joy of science and show the ways how science, technology, engineering and mathematics (STEM) provide solutions to improve people's lives.
• Organising Agencies: Ministry of Science & Technology and Ministry of Earth Sciences in association with Vijnana Bharati (VIBHA) organise IISF every year.
• IISF 2020: The Council of Scientific and Industrial Research (CSIR) will spearhead the IISF 2020 with support of all other concerned ministries and departments.
  
  • CSIR is funded by the Ministry of Science and Technology.

Source: PIB