Taking on Big Tech

Taking on Big Tech

Context: This editorial on Taking on big tech has been created based on the article “US has gone after Big Tech. That makes it easier for India” published in “The Indian Express”.

Background:
 The US has finally changed its stance towards antitrust enforcement and the US Department of Justice, and 16 states have recently sued Apple alleging that it monopolized and abused the smartphone market.
 Competition Commission of India has asked its Director General to investigate on dispute between Google and a host of Indian firms and file a report in 60 days.

 
How do global giants justify their dominant position?
 They argue that there is no need for setting regulations because free markets will encourage entry of entrepreneurs who will inevitably challenge the existing structure.
 They claim that innovations by smart start-ups would challenge the monopolies in a 
more efficient way than any governments intervention.
 They overstate the negative impact of governmental intervention on the market 
forces. Further, they glorify the virtues of free market enterprise.
 They justify bailouts at the taxpayers’ expense by claiming that it is necessary to keep the wheels of commerce ticking.

What are the concerns with the dominant position of digital giants?
 Abuse of Dominance: Digital giants often wield significant market power, allowing them to act independently of competitive forces. They may impose unfair conditions, discriminatory prices, or restrict market production. Such abuse can harm competitors, consumers, and other markets
 Unchecked Influence: Dominant digital players can influence the behavior of competitors, consumers, and even entire markets. Their decisions impact innovation, pricing, and access to services. This unchecked influence can distort fair competition
 Barriers to Entry: Digital giants’ dominance can create high entry barriers for new players. Smaller businesses struggle to compete due to the giants’ established position, resources, and network effects.Innovation suffers when startups face insurmountable hurdles
 Consumer Choice and Privacy: Dominant platforms control access to information, products, and services.Limited competition reduces consumer choice. Privacy concerns arise as these giants collect vast amounts of user data without adequate safeguards. 
 Employing wrong methods: Competition crimes in the digital space are more pervasive, visible and harmful. These giants engage in blocking, suppressing, excluding and limiting third-party wallets to ensure their profitability. This is a violation of the principles of free and fair competition.

What is the significance of USA’s changed stance towards antitrust enforcement for India and the world?
 It will become easier for India and the EU to regulate these firms in their respective jurisdictions. The antitrust enforcement agencies can now proceed in case of violations by these firms without geopolitical repercussions because the protective shield of the home country (USA) for these firms has been lifted.