Internet Monopolisation by Big Tech

• 28 Oct 2022

This article is based on “Regulating Big Tech: Tread lightly” which was published in The Hindu on 27/10/2022. It talks about the internet monopolisation by big tech and the recent penalty on Google by the Competition Commission of India.

For Prelims: Big Tech Companies, Competition Commission of India, Competition Act 2002, Competition Amendment Bill 2022, Political Polarisation, Hate Speech.

For Mains: Antitrust Issues in India, Regulating Big Tech.

Big Tech companies are transforming India’s digital economy and society in a multitude of ways. Although tech platforms open up new opportunities for bringing products and services to market, somewhere they also wreak serious real-world harms.

These companies have been on the government radar in many countries for being big spenders and trying to steamroll competition by either buying out their rivals or pushing vendors to avoid working with their competitors.

Recently, the Competition Commission of India imposed a penalty of Rs 1,337.76 crore on Google for “abusing its dominant position” in the Android Mobile Device ecosystem.

Considering that big tech companies transact a large volume of data across the globe, it is necessary to harmonise, regulate them along with maintaining standards for consumer protection.

What are Big Tech Companies?

• Big Tech collectively describes the most prolific and prosperous technology companies in today's marketplace which have inordinate influence on internet users across the globe.
• They are often called the Big Five and include the following companies:
  • Amazon, Apple, Facebook, Google, and Microsoft

How does India Currently Keep a Check on Big Tech?

• At present, antitrust issues in India are guided by the Competition Act, 2002 with the Competition Commission of India taking the lead in checking monopolistic practices.
  • Competition Commission of India has raised issues with Google’s commercial flight search option, its dominant position in the search marketplace.
    • Google was found guilty in 2019 of misusing its dominant position in the mobile Android market to impose unfair conditions on device manufacturers.
    • In addition, Google is accused of following a high and unfair commission mechanism for its Play Store apps.
• The government has also proposed amendments to the competition law through the Competition Amendment Bill, 2022 which is currently under review by The Parliamentary Standing Committee on Finance.

What are the Issues Related to Big Tech Companies?

• Internet Monopolisation: Big tech companies acquire competitors to buy consumer loyalty instead of earning it.
  • They leverage their market power in one line of business to gain monopolies in others, locking consumers into their ecosystem of products and services.
  • Their consolidated power can also swing elections and change the political mood of a nation.
• Invasion of Privacy: When a person searches for a product online, the ads related to it appear on almost every internet platform they use. While it has many positive aspects, it has a massive potential of drastic negative repercussions.
  • Also, there is a lack of transparency in how tech companies process user data, which has made invasion of privacy a default.
• Regulatory Vacuum: Due to rapid innovation and advancement by the Big Tech firms, the regulators are only able to react, not be in readiness.
  • These giant platforms maintain that they are only intermediaries and therefore, they can’t be held liable for the content.
• Arbitrary Pricing: In the non-digital arena, price determination happens through market forces. However, in the digital space, rules are largely dictated by the large platforms. Consumers are products themselves on these platforms.
  • Concepts like network effects and winner-takes-all coupled with gatekeeping by Big Tech firms exacerbate the problem.
• Moral Panic: Tech platforms are used to spread disinformation and propagate political polarisation, hate speech, misogynistic abuse, terrorist propaganda, all things that cause moral panic in general public.

What Should be the Way Forward?

• From Ex-Post to Ex-Ante Approach: There is a need to move towards an ‘ex-ante’ approach to regulate competition in the digital market economy instead of the ‘ex-post’ model followed now.
  • This will prevent anti-competitive behaviour, instead of just initiating a probe and penalising after a breach occurs.
• Regulating Platform-to-Business (P2B) Space: India must adopt a hard approach towards regulation of the platform-to-business (P2B) space in the larger socio-political and economic interests of small businesses.
  • Big tech companies enjoy an undeniable monopoly across sectors due to regulatory gaps and consumer loyalty. As consumers will not easily give up the convenience that this offers, it is necessary to create a network of regulatory measures and safeguards centred around them.
    • To have the greatest impact, regulation should be sensitive to regional issues.
• Data Management Framework: The regulatory framework for big tech companies to manage their data can be framed through joint collaboration between Ministries of Corporate Affairs, Electronics and Information technology, as well as the Competition Commission of India.
  • The government should require BigTech companies to ensure that the data harvested from consumers will not be used for any purpose other than serving the consumer’s interest.
• Consumer Awareness: The government needs to take adequate steps to promote internet awareness, such as checking the authenticity of websites before any transactions are made, and not granting access to unauthorised applications.

Drishti Mains Question
Despite transforming India's digital economy and society in a variety of ways, big tech companies are also under scrutiny for Internet Monopolisation. Critically Analyse.