A U.S. lobby group representing tech giants such as Google, Amazon, and Apple has urged India to reconsider its proposed EU-like competition law. The group argues that the new regulations, which target data use and preferential treatment of partners, could lead to higher user costs. This development comes amidst India’s efforts to address the increasing market power of major digital companies within its borders.
Proposed Digital Competition Bill
India’s “Digital Competition Bill” aims to introduce stringent regulations similar to the EU’s Digital Markets Act of 2022. The proposed law would apply to large tech firms with a global turnover exceeding $30 billion and at least 10 million local users. Key provisions include prohibiting companies from exploiting non-public user data and preventing them from promoting their own services over those of rivals. Additionally, the bill seeks to eliminate restrictions on downloading third-party apps.
Concerns Raised by U.S. Tech Lobby
The U.S.-India Business Council (USIBC), part of the U.S. Chamber of Commerce, expressed concerns in a May 15 letter to India’s Corporate Affairs Ministry. The USIBC argues that the draft Indian law is more extensive in scope than the EU’s, potentially leading to significant repercussions for targeted companies. The council warns that the new regulations could deter investment in India, increase prices for digital services, and reduce the range of services offered.
“Targeted companies are likely to reduce investment in India, pass on increased prices for digital services, and reduce the range of services,” the letter states. The USIBC emphasizes that restrictions on data use and service promotion could hamper companies’ ability to launch new product features and enhance security for users.
Implications for Big Tech and India’s Market
India, with its 1.4 billion population and growing affluent class, is a lucrative market for global tech giants. The proposed Digital Competition Bill could significantly impact how companies like Apple, Amazon, and Google operate in the country. For instance, Apple CEO Tim Cook recently highlighted India’s importance by noting that the company posted a “revenue record” in India during the March quarter, even as its overall global revenue declined by 4%.
Response and Future Outlook
The USIBC’s letter to India’s Corporate Affairs Ministry highlights the potential economic consequences of the proposed law. However, neither the ministry nor the involved companies have publicly responded to these concerns. As India moves forward with its Digital Competition Bill, the debate between fostering fair competition and maintaining a favorable investment climate for tech giants will likely intensify.
Conclusion
India’s proposed Digital Competition Bill aims to curb the market dominance of large digital companies and promote fair competition. However, the pushback from U.S. tech giants underscores the potential challenges and economic implications of implementing such regulations. Balancing regulatory objectives with the need to attract and retain foreign investment will be crucial as India navigates this complex issue.
