A US lobby group representing tech giants Google, Amazon and Apple has asked India to reconsider its EU-like competition law proposal, arguing that regulations against data use and preferential treatment of partners could increase user costs, the letter showed.
Citing the growing market power of India’s few big digital companies, a government panel in February proposed imposing obligations under a new antitrust law to complement existing regulations that the panel said were “time-consuming” to implement.
India’s “Digital Competition Act” is on the heels of the EU’s landmark Digital Markets Act 2022. It will apply to large companies, including those with a global turnover of over USD 30 billion and whose digital services have at least 10 million users locally level, bringing some of the world’s largest technology companies into its scope.
It is proposed to prohibit companies from exploiting their users’ non-public data and promote their own services over competitors, as well as lifting restrictions on downloading third-party applications.
Companies are deploying these strategies to launch new product features and increase security for users, and curbing them will hit their plans, the US-India Business Council (USIBC), part of the US Chamber of Commerce, said in a May 15 letter to India’s corporate body. . Ministry of Affairs, which works on the law.
India’s draft law is “much broader” than the EU law, it said in the letter, which has not been made public but seen by Reuters.
“Targeted companies are likely to reduce investments in India, pass on increased prices for digital services and reduce the range of services,” it said.
The USIBC, which has asked India to reconsider the planned law, did not respond to queries from Reuters, nor did the Ministry of Corporate Affairs, 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 that the company posted a “revenue record” in India during the March quarter, when its overall global revenue fell 4 percent.
The Indian panel says the new law is needed because a few big digital companies “have enormous control over the market”. As in the EU, a fine of up to 10 percent of a company’s annual global turnover is recommended for infringement.
The Competition Commission of India (CCI) has been investigating big tech companies for years.
The CCI fined Google $161 million in 2022, ordering it to stop restricting users from removing its pre-installed apps and allowing downloads without using its app store. Google denies wrongdoing and says such restrictions increase user security.
Amazon is also facing an antitrust investigation for favoring select sellers on its Indian website, a charge it denies. Apple also denies the allegations but faces an investigation for alleged abuse of its dominant position in the app market.
A group of 40 Indian startups nevertheless backed the new Indian law, saying it could help address monopolistic practices by dominant digital platforms and create a level playing field for smaller companies.
There is no fixed time frame, but the Indian government will next review feedback on the proposal before seeking parliamentary approval with or without amendments.
© Thomson Reuters 2024
