U.S. Tech Giants Urge India to Rethink Proposed Competition Law

A U.S. letter shows that a lobby group representing tech giants Google, Amazon, and Apple has asked India to reconsider its proposed EU-like competition law. The group argues that regulations against data use and preferential treatment of partners could raise user costs.

Proposed Digital Competition Bill:

Citing the increasing market power of a few big digital companies in India, a government panel in February proposed imposing obligations on them under a new antitrust law which will complement existing regulations, whose enforcement the panel said is “time-consuming.” India’s “Digital Competition Bill” is like the E.U.’s landmark Digital Markets Act 2022.

It will apply to big firms, including those with a global turnover of over $30 billion and whose digital services have at least 10 million users locally, bringing some of the world’s biggest tech firms under its ambit.

Key Provisions and Industry Concerns:

The bill proposes to prohibit companies from exploiting the non-public data of their users, promoting their services over rivals, and abolishing restrictions on downloading third-party apps.

Companies deploy these strategies to launch new product features and boost user security, and curbing them will harm their plans, the U.S.-India Business Council (USIBC), part of the U.S. Chamber of Commerce, said in a May 15 letter to India’s Corporate Affairs Ministry, which is working on the law.

Impact on Investment and Services:

The draft Indian law is “much further in scope” than the E.U.’s, says the letter was not made public but was seen by Reuters.

“Targeted companies are likely to reduce investment in India, pass on increased prices for digital services, and reduce the range of services,” it says.

Lack of Response and Market Significance:

The USIBC, which has asked India to reconsider the planned law, did not respond to Reuters queries, and neither did the Corporate Affairs Ministry, Apple, Amazon, or Google. With a population of 1.4 billion people and a growing affluent class, India is a lucrative market for big tech companies.

Apple CEO Tim Cook said this month the company posted a “revenue record” in India during the March quarter, when its overall global revenue declined 4%.

The Indian panel says the new law is needed as a few large digital enterprises “wield immense control over the market.” As in the E.U., it recommends a penalty of up to 10% of a company’s annual global turnover for violations. The Competition Commission of India (CCI) has investigated big tech firms for years.

Ongoing Antitrust Investigations:

In 2022, the CCI fined Google $161 million and ordered it to stop restricting users from removing its pre-installed apps and allow downloads without using its app store. Google denies wrongdoing and says such restrictions boost user security.

Amazon is also facing an antitrust investigation for favoring select sellers on its India website, an allegation it denies. Apple, too, denies allegations but faces an investigation for alleged abuse of its dominant position in the apps market.

A group of 40 Indian startups has endorsed the new Indian law, saying it can help address the monopolistic practices of dominant digital platforms and create a level playing field for smaller companies.