Indian regulators' mantra to check the big tech boom

Allow me to take you to Bonn, Germany. To the Federal Cartel Office (FCO), also known as the Bundeskartellamt. It is the country’s antitrust watchdog.

 

Andreas Mundt, president of the FCO, has said that it will go the distance to protect competition in the digital economy, against big internet companies. Namely, Google, Facebook, Apple and Amazon. Mundt’s points are simple. The internet should be open, to allow new players to come in. And users must be able to use the services of the companies in a free and transparent manner. In chasing these objectives, the FCO has found the big tech companies lacking. And for a good amount of time now, it has been investigating them. 

 

Starting 2016, the FCO has been investigating how Facebook collects user data, without their knowledge or permission. In a wide-ranging probe, the FCO is investigating how Facebook uses that data and does it do so by abusing its dominant position in Germany. Earlier last week, the FCO started an investigation into Amazon. Mundt said that the FCO has received several complaints from small business owners, who operate as third-party sellers on Amazon. Their complaints range from contract clauses restricting lawsuits against Amazon and company practices on blocking and shutting seller accounts. “Its double role as the largest retailer and largest marketplace has the potential to hinder other sellers on its platform,” said Mundt at a press conference. 

 

Increasingly so, the world is waking up to the problem that is big tech. Our story today argues that India and Indian regulators deserve a pat on their back. 

 

Despite all their shortcomings, Indian regulators have kept big tech in check. Both Amazon and its arch-nemesis Flipkart (now owned by Walmart) don’t have the kind of structural control over the e-commerce market in India like Amazon does in the United States. Then, there’s Google Tax. Every time a company has to pay advertising fees above Rs 1 lakh ($1,417) to a company that is based outside India, it has to withhold 6% of that payment. That goes to the government as equalisation levy. There’s the sanity of holding someone accountable at WhatsApp (owned by Facebook). There’s holding up Net Neutrality. Data localisation.

 

There’s a good story here, and it's free. From my colleague Vishal, who is interning with us. Read: https://the-ken.com/story/indian-regulator-mantra-big-tech/

 

About Bonn. Quiet city. Excellent people. Eating Frikadellen, watching the Rhine. Okay, beer.