India’s proposed EU-style antitrust law will present a new regulatory hurdle for IT businesses such as Apple (AAPL.O), Google (GOOGL.O), and Meta (META.O), laying out stringent compliance requirements that could have an impact on their business models.
The Indian government is now reviewing a panel’s February report, which proposed a new “Digital Competition Bill” to supplement existing antitrust legislation. A significant lobbying group in the United States has already spoken out against the measure, citing concerns about its business impact.
Here are essential details about India’s proposal:
WHO DOES THE LAW APPLY TO?
The law would apply to “systemically significant digital” enterprises. Those having a domestic turnover of at least $480 million or a global turnover of more than $30 billion, as well as a local user base of at least 10 million for their digital services, would be eligible.
Apple (AAPL.O), Google (GOOGL.O), Meta (META.O), and Amazon (AMZN.O) would all be subject to Indian law, which has yet to be ratified by parliament.
Why does India want a new anti-trust law?
The government panel stated that new controls were required because the digital market was “increasingly becoming concentrated,” with a few giant corporations holding “immense control over the market.”
According to the panel, this means that smaller digital firms and startups must rely on larger companies, resulting in “an imbalance in bargaining power”.
WHAT MIGHT THE NEW LAW REQUIRE?
Companies would be expected to operate in a fair and nondiscriminatory manner, with the law proposing a penalty of up to 10% of a company’s global revenue for violations – similar to the EU’s Digital Markets Act.
Large digital corporations would be forbidden from using non-public user data and favoring their own products or services on their platforms.
Companies would also be prohibited from blocking consumers’ ability to download, install, or use third-party programs in any way. Furthermore, they would have to allow users to freely choose their default settings.
The law proposal and feedback will now be considered by the Ministry of Corporate Affairs, whose minister, Nirmala Sitharaman, has remained in post since India’s election.
WHICH TECH FIRMS ARE ALREADY UNDER INDIANE SCRUTINY?
In India, Amazon (AMZN.O) opens a new tab, while Walmart (WMT.N) opens a new tab. Flipkart is being investigated for pushing specific vendors on their e-commerce platforms, which harms competitors.
Google has received antitrust fines and is entangled in court fights for abusing its dominant position in the Android mobile operating system industry, including limiting users’ ability to remove pre-installed apps.
Google and Apple are also under scrutiny for promoting their in-app purchase systems, which a non-profit group claims harms competitors.
