Better regulation is a must to check anti-competitive practices by digital giants

| Updated on October 08, 2020 Published on October 08, 2020

Companies such as Google, Amazon, Facebook are only bound by the rules that they have created for themselves, and not exactly by government regulations or standards followed by other traditional companies and sectors

The on-going wrangle between a group of digital economy players led by Paytm and search and data behemoth Google over the latter’s move to introduce a controversial billing system for the apps it hosts on its PlayStore exposes a set of larger issues dogging the platform economy in India and elsewhere. Chief among them is the fact that platforms such as Google command tremendous clout in the digital data products market which they helped build and nurture. Google had earlier decided to extract a 30 per cent fee from apps in in-app purchases (a move it has put on hold); in doing so it is privileging apps on its PlayStore, being an umpire and a player. The uproar over this action is not without context: companies such as Google, Amazon, Facebook — no longer the nimble players they used to be a few decades ago — are only bound by the rules that they have created for themselves, and not exactly by government regulations or standards followed by other traditional companies and sectors. This also means, it’s time they are taken to task when they cross the line.

The current brawl must also be seen in the context of the global debate over the ways in which platform companies have to be controlled and redirected so as to make sure they don’t trample upon small players and respect data privacy rights. Lawmakers in many countries including the US and the EU have already talked about ways of breaking up Big Tech before it’s too late. To be sure, they have generated considerable controversy: in running their businesses, they often use precious private data for purposes that are an outright breach of consent, and run behavioural experiments to influence consumer behaviour and more. The digital world is determined, curated, classified and controlled by algorithms. In this space, companies such as Google, with their incredible algorithmic prowess, stand to gain a lot, not only in terms of monetary benefits but also in terms of political influence, dictating market terms, bulldozing rivals and so on.

These tendencies can harm not only emerging businesses in the digitalscape, but also adversely influence the democratic process. Platforms are criticised for their predatory behaviour, stringent worker rules and aggressive advertising practices. Hence, it is in the national interest that the government introduces an ombudsman for monitoring the practices of platform companies. Google must not use its near-monopoly power in the operating system market to force local and smaller players to shut shop or become its digital quislings. The government must step in to create a level-playing field here by introducing interoperability in the OS space and better negotiation room for app makers. Atmanirbharta in the digital space would begin from here.

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Published on October 08, 2020
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