Fighting The Big G – on big tech’s anti-competitive practices

Source– The post is based on the article “Fighting The Big G” published in The Times of India on 27th January 2023.

Syllabus: GS3- Awareness in the field of IT

Relevance– Regulation of digital ecosystem

News– The article explains the issue of dominant position and anti-competitive practices of big digital players in the digital space. It also explains the change in business model by Google in India due to SC decision on Competition Commission of India’s rulings.

How is Google changing its business model in India?

The change was triggered by the Supreme Court asking Google to comply with the Competition Commission of India’s rulings.

In the new model, instead of creating a bouquet of apps, smartphone makers can license individual apps from Google. Also, its search engine will not necessarily be the default setting.

How the Google business model is facing regulatory crackdown across the world?

South Korea’s parliament in 2021 passed a bill imposing curbs on the proprietary billing system of Google and Apple.

The EU in May will enforce a new law called the Digital Markets Act. It will prevent “gatekeepers” from engaging in anti-competitive behaviour. It will no longer be business as usual for the Android OS ecosystem.

Why substantial change in business approach of big digital companies is unlikely to happen in near future?

The walled garden approach that ensured Android’s dominance is based on a complex model of cross-subsidies.

Google’s huge user base comes from offering free services such as a search engine and email. This user base is then monetised for advertising revenue. Even third party apps cannot all wish away Google.

Application Programming Interfaces offered by Google allow app developers to utilise a number of its services. It reduces development costs for third party app developers. This web of cross-subsidies cannot be disentangled overnight.

What is the right way to establish fair competition in digital space?

The regulatory crackdown on the Android ecosystem is necessary to open the door to more competition. It may not happen overnight but the process is underway.

The digital world’s economies of scope require a new set of tools.