Tech giants face new regulatory hurdles with India's antitrust law

A new regulatory landscape is on the horizon for tech giants such as Apple, Google, and Meta, as India's proposed antitrust law, mirroring that of the EU, sets forth stringent compliance requirements that could potentially alter their business operations.

The Indian government is presently scrutinizing a report submitted in February by a panel, which suggested the introduction of a "Digital Competition Bill" to supplement the existing antitrust regulations.

A prominent US lobby group has expressed its reservations about the proposal, citing concerns over its potential impact on business.

Here are some crucial aspects of India's proposition:

What would the new law mandate?

The proposed law would require companies to conduct their operations in a fair and non-discriminatory manner.

Violations could attract penalties amounting to up to 10% of a company's global turnover, akin to the EU's Digital Markets Act.

Major digital corporations would be barred from exploiting non-public user data and from giving preferential treatment to their own products or services on their platforms.

They would also be prohibited from limiting users' ability to download, install, or use third-party apps in any way and must allow users to freely choose default settings.

The proposed legislation and the feedback received will now undergo review by the Ministry of Corporate Affairs, headed by Minister Nirmala Sitharaman, who continues to hold office post the Indian elections.

Why is India considering a new antitrust law?

According to the government panel, the digital market is becoming increasingly monopolistic, with a handful of large corporations exerting substantial control.

This situation necessitates smaller digital firms and startups to rely on these larger entities, leading to a power imbalance in negotiations.

Who would be affected by the law?

The proposed legislation targets "systemically significant digital" corporations. Companies with a domestic turnover surpassing $480 million, or a global turnover exceeding $30 billion, along with a local user base of at least 10 million for their digital services, would fall under its scope.

Tech giants like Apple, Google, Meta, and Amazon would be subject to this Indian law, which is still awaiting parliamentary approval.

Which tech firms are currently under India's scrutiny?

In India, e-commerce platforms Amazon and Walmart's Flipkart are under investigation for allegedly favoring certain sellers, thereby disadvantaging competitors.

Google has been penalized for antitrust violations and is engaged in legal disputes over accusations of abusing its dominant position in the Android mobile operating system market, including limiting users' ability to uninstall pre-installed apps.

Google and Apple are also under scrutiny for promoting their in-app purchase systems, which, according to a non-profit group, disadvantages competitors. All the companies have denied any wrongdoing.