As the antitrust movement against Big Tech gains momentum, it is time to find solid solutions


In recent years, the Chamber of Industry and Commerce has actively followed suspected antitrust activities in the technology sector.

From Ambika Khanna

India’s Competition Commission for Antitrust Surveillance (CCI) recently launched an investigation into the new WhatsApp privacy policy (which allowed the platform to share metadata with parent company Facebook) despite the Ministry of Electronics and Information Technology (MeitY) calling on Delhi High court To prevent WhatsApp from doing this.

In recent years, the Chamber of Industry and Commerce has actively pursued alleged antitrust activities in the technology sector. In January 2020, she opened an investigation against Amazon and Flipkart for abusing their dominant positions and making acquisitions to stifle competition and use predatory pricing tactics. The companies managed to get the Karnataka Supreme Court to postpone the CCI investigation. In October 2020, the Chamber of Commerce and Industry started an investigation against Google to pre-install G-Pay on Android phones and to enforce exclusivity for in-app purchases. In another case, the Chamber of Commerce and Industry imposed a fine of US $ 20 million on Google in 2018 for abuse of its dominant position and bias in search activities on the Internet.

The combined market capitalization of the five big tech companies Facebook, Amazon, Apple, Microsoft and Google (FAAMG) was over $ 6 trillion in September 2020, more than double the GDP of India. In addition to the zero-financial-cost-to-consumer strategy and the network effect principle, mergers and acquisitions of big tech in various sectors have been key to its burgeoning growth.

There is nothing wrong with being big and established. But it is the “how” of their growth that raises concerns. Governments around the world have challenged some of these investments because their goal is to neutralize competition, leading to monopoly and curbing innovation. In December 2020, the U.S. FTC, along with 48 states, filed a lawsuit against Facebook alleging monopolizing and killing competition by making large acquisitions, including Instagram’s one billion in 2012 US dollars and WhatsApp in 2014 for $ 19 billion.

FAAMG has been subjected to closer scrutiny for reasons ranging from monopoly behavior and data protection to the moderation of content and advertising policy. Australia implemented a media negotiating code in December 2020 to curb anti-competitive practices by Big Tech by mandating a payment structure between the platform and the news agencies. In the US, after an investigation in October 2020, the House of Representatives Subcommittee on Antitrust, Commercial and Administrative Law concluded that Big Tech was investigating anti-competitive practices by abusing its status as the gatekeeper of the internet.

The European Commission fined Google over $ 1 billion (1.3% of its annual revenue in 2018) in 2019 for abusing its dominant position in online advertising. Google has been found guilty of including anti-competitive clauses in contracts with its providers that prevented them from hosting content from competitors.

China is catching up with local BVT (Baidu, Alibaba and Tencent). In December 2020, the Chinese antitrust agency alleged that Alibaba had violated the antimonopoly law by entering into contracts demanding exclusivity from vendors. In March 2021, Tencent was fined $ 76,000 for not making its acquisitions transparent.

India is trying to update its regulations to cope with fast-paced big tech. The Ministry of Industry and Internal Trade Promotion introduced changes to FDI policy in 2018. It has imposed embargoes on product exclusivity and banned inventory-based models for foreign e-commerce providers. While Flipkart and Amazon protested, they had to change their business models to adapt to the new regulations.

When the antitrust movement against big tech gains momentum around the world, it is time to find solid solutions around the world. Breaking up Big Tech is not a sustainable long-term solution as it will only open the door to a new group of dominant players – just like Blackberry and Yahoo have been replaced by FAAMG.

Governments must seek solutions that level the playing field, create a fair market, and promote consumer welfare and industry innovation.

One such solution is tighter merger control in addition to the financial thresholds by a country’s antitrust watchdog prior to a merger or acquisition, which requires a detailed investigation including extensive due diligence of a potential transaction by the regulator.

In India, in order to encourage the use and adoption of technology in different sectors, the government must first take a nationwide approach. The tech sector will benefit immensely when policymakers in all ministries align and accelerate policy-making – from MeitY on data protection (personal and non-personal data) and AI to the Ministry of Commerce and Industry for e-commerce and FDI to the Ministry of Internal Data Protection on national security concerns, to the Chamber of Industry and Commerce on antitrust and merger control. This inter-ministerial cooperation can bring enormous socio-economic benefits to the economy, resulting in policies that reflect the “new India”.

The author is a senior researcher in the Gateway House’s International Law Studies Program

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Steven Gregory