Taking on big tech

Source-This post on Taking on big tech has been created based on the article “US has gone after Big Tech. That makes it easier for India” published in “The Indian Express” on 29 March 2024.

UPSC Syllabus-GS Paper-2– Regulatory and various Quasi-judicial Bodies

News– The US has finally changed its stance towards antitrust enforcement and the US Department of Justice, and 16 states have recently sued Apple alleging that it monopolized and abused the smartphone market.

Context– Competition Commission of India has asked its Director General to investigate on dispute between Google and a host of Indian firms and file a report in 60 days. Taking on big tech

What are the arguments given by these global giants to justify their dominant position?

1) They argue that there is no need for setting regulations because free markets will encourage entry of entrepreneurs who will inevitably challenge the existing structure.

2) They claim that innovations by smart start-ups would challenge the monopolies in a more efficient way than any governments intervention.

3) They overstate the negative impact of governmental intervention on the market forces. Further, they glorify the virtues of free market enterprise.

4) They justify bailouts at the taxpayers’ expense by claiming that it is necessary to keep the wheels of commerce ticking.

Read more- Regulating tech giants in India

What are the problems with the dominant position of digital giants?

1) Abuse of position-Google forced app developers to use Google’s proprietary billing system or pay a fee if they chose a competitor. This hampered the economic interest of small app developers.

2) Employing wrong methods– Competition crimes in the digital space are more pervasive, visible and harmful. These giants engage in blocking, suppressing, excluding and limiting third-party wallets to ensure their profitability. This is a violation of the principles of free and fair competition.

3) Monopolization tendencies– It can kill competition and innovation. For ex- Standard Oil Company that monopolized the market and was forced to split by US regulators.

What is the significance of USA’s changed stance towards antitrust enforcement for India and the rest of world?

It will become easier for India and the EU to regulate these firms in their respective jurisdictions. The anti-trust enforcement agencies can now proceed in case of violations by these firms without geopolitical repercussions because the protective shield of the home country (USA) for these firms has been lifted.

Question for practice

What are the problems with the dominant position of digital giants like Google, Apple etc.? How can recent change in USA’s stance overcome these problems?