Explained: Google’s ‘monopolist’ judgement in the US and its repercussions in India

There are multiple antitrust challenges against the likes of Apple and Microsoft in other jurisdictions, all sharing largely the same premise – that these companies have become so big on the Internet that entry barriers for new companies are at an all-time high. That they control every facet of the attention economy, from hardware to software. That this stronghold is indeed bad for innovation.

Ripple effects in India

It took the United States four years to bring a case against Google which eventually culminated in the landmark ruling against the company. The judgement and the country’s subsequent action to address Google’s violation of competition laws – which includes proposals to break up the company’s various business units, as per media reports – could have a bearing on the regulatory discourse in India as well.

Here, Google has been found to be at odds with start-up founders over its billing policy, for the commision it charges from developers listed on its app store, and for allegedly stifling competition in the online advertising market – the major source of Google’s revenues globally.

In India, where the legislative ecosystem is slowly evolving to challenge big technology companies in an increasingly online world, competition is pegged to become an important regulatory tool for lawmakers. And the country has proposed a major overhaul of its antitrust landscape to rein in digital empires.

“Google is a monopoly in search and using its dominance has established moats around several dominant digital services like Android, and particularly of deep worry, in digital advertising,” former Minister of State for IT Rajeev Chandrasekhar told The Indian Express.

“The Internet was and must be a free and fair space and not carved into these private big tech islands where rules of game get distorted through market power. Where there is market power, market abuse follows – in the coming years, governments across the world will need to agree on clear guard rails and laws to protect the consumer without slowing down innovation,” Chandrasekhar added.

Taking a leaf out of the European regulatory handbook, India has proposed a new digital competition law that could stop tech giants like Google, Facebook, and Amazon from self-preferencing their own services, or using data gathered from one company to benefit another group company.

“The ruling in the US shows why India needs an updated competition law and why our efforts at trying to introduce an ex ante framework have merit. We are closely tracking how the development unfolds in the US,” a senior government official said, requesting anonymity.

The draft law, called the Digital Competition Bill, 2024, also has provisions to set presumptive norms to curb anti-competitive practices before they actually take place, and promises to impose heavy penalties — which could amount to billions of dollars — for violations. If this were to go in force, it could require big tech companies to make fundamental changes to their various platforms.

The proposal is similar to the EU’s Digital Markets Act (DMA), which went into complete effect earlier this year, and requires large tech firms like Alphabet, Amazon and Apple to open their services, and not favour their own at the expense of rivals. The law came in on the back of a long history of anti-competitive practices by these companies.

Big tech’s stronghold over the innovation economy

There is concern within official quarters that in the last decade or so, a majority of the innovation has been confined to within the stables of a handful of big tech companies, mostly from the US. Officials believe that a big reason for this are the high market barriers for new entrants in the sector — in the online market, once a company gets a significant portion of the market, their product becomes the default way to access that particular service, with rivals finding it increasingly difficult to challenge their dominance.

Government officials believe that the big tech companies have shown a history of engaging in anti-competitive practices, and a presumptive framework would work better to address this. Last year, Google was fined Rs 1.337 crore by the CCI for its anti-competitive conduct in the Android ecosystem.

“A strict competition law for these online empires is really a need of the hour. They are all going to come at us with full force of their lobbying might and we have our work cut out for us. But we need to understand, and our legislation should reflect it, that by curbing their dominance, we are in fact helping smaller companies who may not have a chance otherwise,” a second official said.