U.S. Tech Lobby Urges India to Revise Proposed Digital Competition Law

A U.S. lobby group representing tech giants Google, Amazon, and Apple has requested that India revise its proposed EU-like competition law. The group argues that regulations against data use and preferential treatment of partners could increase user costs, Reuters news report said.

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In February, a government panel cited the growing market power of a few large digital companies in India and proposed new antitrust obligations to complement existing regulations, which the panel described as “time-consuming” to enforce.

The proposed Digital Competition Bill mirrors the EU’s landmark Digital Markets Act of 2022 and targets major firms with a global turnover of over $30 billion and digital services with at least 10 million local users.

The bill aims to prevent companies from exploiting non-public user data and promoting their own services over rivals, and it seeks to lift restrictions on downloading third-party apps.

The U.S.-India Business Council (USIBC), part of the U.S. Chamber of Commerce, argued in a May 15 letter to India’s Corporate Affairs Ministry that such curbs would hinder new product launches and security features, potentially leading to reduced investment in India, higher digital service prices, and fewer service options.

The draft Indian law is described as “much further in scope” than the EU’s, according to the letter, which has not been publicly released. The USIBC did not respond to Reuters’ requests for comment, nor did India’s Corporate Affairs Ministry, Apple, Amazon, or Google.

India, with its 1.4 billion population and growing affluent class, represents a lucrative market for big tech companies. Apple CEO Tim Cook recently highlighted the company’s “revenue record” in India during the March quarter, even as its global revenue declined by 4 percent.

The Indian panel justifies the new law, stating that a few large digital enterprises “wield immense control over the market.” Similar to the EU’s regulations, it recommends penalties of up to 10 percent of a company’s annual global turnover for violations.

The Competition Commission of India (CCI) has been scrutinizing major tech firms for years. In 2022, the CCI fined Google $161 million, demanding it stop restricting users from removing pre-installed apps and allow app downloads outside its store. Google denies any wrongdoing, claiming such restrictions enhance user security.

E-commerce major Amazon faces an antitrust investigation for allegedly favoring select sellers on its Indian website, an allegation it denies. Apple also denies allegations but is under investigation for allegedly abusing its dominant position in the app market.

Conversely, a group of 40 Indian startups supports the proposed law, arguing it could curb monopolistic practices by dominant digital platforms and create a level playing field for smaller companies.

The Indian government will review feedback on the proposal before seeking parliamentary approval, with or without changes. There is no fixed timeline for this process. India will have a new government in June.