[Sansad TV] Perspective: Big Tech Monopoly

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Context

  • The Competition Commission of India has imposed a provisional penalty of Rs. 1337.76 crore on Google for abusing its dominant position in multiple markets in the Android Mobile device ecosystem.
  • The regulator also issued cease and desist directions to the tech giant on a number of its business practices.
  • Big tech companies have faced similar actions in various other countries as well.

Broader Issue: Big Tech Competition

  • During the course of inquiry, Google argued about the competitive constraints being faced from Apple.
  • However the Commission noted the differences in the two business models which affect the underlying incentives of business decisions.
  • Google manages the Android operating system as well as other licences, which gives it advantage over its competitors to pre-install most prominent apps and widget like Chrome browser on Android devices.

Major contention with Google: Tech Monopoly and Hegemony

  • Monopolies like Amazon and other Big Tech companies have been allowed to conduct blatantly anti-competitive and discriminatory disinformation practices.
  • This is no new thing for a huge market like India.
  • Google is facing more antitrust scrutiny at home and abroad.

What is Monopoly?

  • A monopoly that occurs when a single firm controls manufacturing methods necessary to produce a certain product, or has exclusive rights over the technology used to manufacture it.
  • Technological monopolies differ from those based on vertical or horizontal consolidation in that the exclusivity derives from the production process itself.

What is a Technology Monopoly?

  • Facebook, Google, Rogers, Microsoft, and Amazon – you have heard their names and you might even use them on a day to day basis.
  • Turning trillions of consumer dollars each year, these tech giants have dominated the global market.
  • These companies have wiped out any competition in order to maintain their monopolies on power.
  • Or Facebook, which has acquired over 94 companies, the most notable being Instagram, WhatsApp Messenger, Oculus Virtual Reality, Giphy, and more.
  • These are just a few examples of how these companies consolidate power and monopolize the industry.

Issues with Big-tech Monopoly

(1) Data Privacy

  • A major issue with technology monopolies is the accumulation of users’ data.
  • We never read the privacy policies under the terms and conditions of a website.
  • Technology monopolies get to set the bar in what they do with our data instead of the individual deciding.
  • This accumulation of data in a centralized domain makes it more enticing for hackers to breach these companies’ security measures.

(2) User manipulation

  • Especially regarding media companies like social media or news outlets, these large corporations can push their personal agendas and biases on the public.
  • The lack of variety in major media sources can result in a reduction of different perspectives and a narrowed personal point of view.
  • Censorship can also aid in manipulating what the public gets to see (or does not get to see) and can obstruct religious, political, social, and other viewpoints.

(3) Ability to bypass regulator

  • Due to rapid innovation and advancement by the Big Tech firms, the regulators are only able to react, not be in readiness.
  • Before the policymakers could realize prospects of a disrupting tech, the technology replaces itself. Ex. Intellectual Property manipulations by Pharma companies.
  • Due to this, they can avoid any negative repercussions for their continued violations.

Does this really affect us?

  • Sudden disruptions: Recently, the WhatsApp went down for no known reasons. Also Instagram and Netflix do.  Luckily for us it was a network system failure.
  • Lack of alternatives would disrupt everything: But if this is what a mere maintenance mistake, imagine what a cyber-attack on one of these companies could do.

How vulnerable is India to such monopolies?

  • Use of the targeted algorithm: You might have seen a video in which Google CEO admits that it records and monitors every movement or click by a user.
  • Consumer manipulation: Tech giants are using users’ search data to push advertisements to the users. The ads are specifically targeted to users based on their recent search over the internet.
  • Ambiguity over data control: This has raised serious privacy concerns and also created anti-trust investigations by various governments. The Cambridge Analytica scandal of Facebook is one such example. The recent WhatsApp privacy policy also created widespread concern.
  • Predatory pricing: The tech giants usually drive out competitors using anti-competitive behaviour. For example, accusations on Amazon favouring their self-branded products over third-party products.
  • Societal impact: The big techs are the foremost medium of fake news, hate speech, etc. These were seen as un-democratic activities by countries.
  • Impact on economy: The combined market capitalization of the big techs is more than the GDP of most countries except China and the USA. The sheer economic presence and their market presence make them create aggressive clauses in their terms and conditions, contract agreements etc.

Steps taken in India

  • Competition Act, 2002 established the Competition Commission of India (CCI). The CCI has been established to eliminate practices having an adverse effect on competition.
  • Information and Technology Act, 2000 governs all activities related to the use of computer resources in India.  
  • Open Network for Digital Commerce (ONDC) seeks to promote open networks, which are developed using the open-source methodology. The project is aimed at curbing “digital monopolies”.

Way Forward

  • Capitalizing information: Big Tech companies must negotiate a fair payment with all the stakeholders for using their content in Facebook’s newsfeed and Google’s Search.
  • Personal data protection bill: At a point in time where data is the new gold standard, the regulation of how tech companies use consumers’ personal data needs to be established by a proper legislation.
  • Comprehensive regulation: One umbrella legislation is far better than having multiplicity of legislations.

Conclusion

  • The implications of tech monopolies have real life consequences, and the actions of these corporations have a direct effect on each of us as individuals.

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