A US lobby group representing tech giants Google, Amazon and Apple has asked India to rethink its proposed EU-like competition law, arguing regulations against data use and preferential treatment of partners could raise user costs, a letter shows.
Citing 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 on the lines of EU’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.
It proposes to prohibit companies from exploiting non-public data of its users and promoting their own services over rivals, and also abolish restrictions on downloading of third-party apps.
Companies deploy these strategies to launch new product features and boost security for users, and curbing them will hit 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.
The draft Indian law is “much further in scope” than the EU’s, says the letter, which has not been 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.
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 percent.
The Indian panel says the new law is needed as a few large digital enterprises “wield immense control over the market”. As in the EU, it is recommending a penalty of up to 10 percent of a company’s annual global turnover for violations.
The Competition Commission of India (CCI) has for years been investigating big tech firms.
The CCI in 2022 fined Google $161 million, ordering 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 favouring 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, though, has come out in support of the new Indian law, saying it can help address monopolistic practices of dominant digital platforms and create a level playing field for smaller companies.
There is no fixed timeline, but the Indian government will next review feedback on the proposal before seeking parliament approval with or without changes.
© Thomson Reuters 2024
