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Rise of Digital Monopolies, the Biggest Threat to India

It is the right time for India to wake up to the tech giants' dominance and take action to keep them on a leash by all means

Today, the biggest threat to humanity is the rise of digital monopolies. The coronavirus pandemic has accelerated digitization across the globe, and it has further strengthened the global monopolies. It includes platforms like Google, Apple, Twitter, and Facebook that many people use regularly.

For instance, over 2.8 billion people use Facebook, which is larger than China and India put together. Reportedly, all these platforms gather data on every individual. If you are using an Android mobile, these platforms track your every movement and use it to build a psychometric profile for every individual.

These monopolistic platforms know where you went today, the books you read, what you shopped, the news you read, and so on. They can use these data to manipulate your mind using AI and other tools. They could make you see what they want you to see and not necessarily what you would like to see.

Today, when you go to Google for some data, it would optimize the search results based on their suitability. It is based on the money advertisers pay these platforms for certain outcomes.

It must be highlighted that digital monopolies have the power to command over the users’ minds. Another reason why these platforms are the biggest threat is that juveniles run some of these platforms, who don’t understand the responsibilities of running such massive portals.

Digital Rights

The world accepted the requirement for basic rights in 1946 for humans, and the Universal Declaration of Human Rights came to protect these rights. Now, it is the right time for all countries to join hands and create a universal declaration for Digital Rights to protect their citizens from the barrage of digital monopolies.

Legislature from all over the globe is in awe of these monopolies. They have a stronger influence, generate massive revenues, and have a significant amount of cash on their balance sheet.

Now, these monopolies have started to censor what individuals say and also shut them out. They have created their teams to cleanse several individuals who express their views.

Personal Ideology

For instance, Facebook and Twitter have set their teams with their ideology. Today, on the advisory board of Facebook, individuals with extreme ideology shut out others’ opinions. They are camouflaging their views while calling themselves liberals.

Today, there is no space for independent opinion in several US universities, and the same controlling narrative has come to India’s universities, such as JNU. For example, they are projecting the Indian Army has an occupation army, and people like Baba Ramdev and Chetan Bhagat are shut out. There has to be a choice whether students have to listen to them or not. Another example of control free speech is the book on Delhi Riots.

Google exhibited the same behavior when it removed Paytm from Play Stores. These stores are the primary places where young startups put their apps, and Google controls what people can download. Regulators from all across the globe worry over the concentration of digital power. The European Union has highlighted the issue and has penalized Google several times to ensure that it does not become a menace to smaller entities.

In India also our political establishments seem to be in reverence of these digital monopolies. They call them Indian firms and invite them to the country but seem to forget that they have data of Indians stored outside of the country. In short, they have given away our digital province to foreigners.

The government recently banned Chinese apps, which is a significant move since the data would reside in China. If we talk about China, it has put a wall around its data. On the other hand, India has been an open society, allowing everyone to come, overlooking the fact that outsiders’ views are largely manipulated and used against the nation.

The Cambridge Analytica scandal is demonstrating it amply by manipulating election data. Hence, democracy is also in peril. And so is free thinking and free speech. Democracy is all about the availability of choices and the freedom to make choices. And now, because of the digital monopolies, it has been subdued.

Today, Google, Apple, Twitter, and Facebook are controlling because of the one-sided ideology sheltered in one-sided contracts with vague sentiments around hate speech.

Public Protection

It is time for India and our political establishments to stand up and protect its citizens from the barrage of digital monopolies. The nation needs an urgent law for data privacy, digital sovereignty, and digital residency so that all our data is stored in the country and is accessible to the Indian government.

The left-sided individuals are arguing that it would result in a surveillance state. However, they seem to be forgetting that all the data stored outside with foreign power nations can do the same surveillance. We can only remain protected if the data is in India and available to our government, so justice can be done wherever required. It is also time for us to trust our Modi government and their justice system.

It is where the Reserve Bank of India or RBI deserves kudos. Under Urjit Patel, former governor, the RBI insisted that the payment data on all credit card transactions and payments in India has to be stored in India. Despite facing opposition from lobbies, hues, and cry made over it, the government stood firm.

Today, all payment data is available in India, subject to regulatory oversight, RTI is applicable, and the protection.

Antitrust Against Google

The Justice Department of the US has filed a new antitrust law against Google. It argues that the tech giant’s position harms both advertisers and regular people as an unchallenged gateway to the internet of billions of users globally.

Google has long defended itself against the monopoly charges stating that its products are free and no one has to use them. It has dodged the tough government scrutiny for several years based on the idea that people searching on the internet are not their true customers.

Internet users are its products, and the advertisers are its real customers. It further complicates the question about who is harmed by Google’s monopoly in selling ads off the globe’s search queries, via its affiliated business, Google’s Android software, and its Youtube and digital maps.

In its complaint, the US government wrote to the federal court for intervention to protect competition since numerous advertisers must pay a fee to search advertising of Google and general search text advertising monopolies. It added that America’s consumers are forced to accept google’s policies, privacy practices, and personal data use. New firms with innovative business models cannot emerge from the long shadow of Google.

“Venture capitalists are now hesitant to fund new startups to compete with these big tech companies because it’s so easy for the big companies to either snap up growing competitors or drive them out of business. The number of tech startups has slumped, there are fewer high-growth young firms typical of the tech industry, and first financing rounds for tech startups have declined 22% since 2012.”

– Elizabeth Warren, Senator and Former aspirant for US Presidentship (1).

The government claims that Google has abused its monopoly power via agreements with other firms that promote Google apps and places as a default on phones, browsers, and other devices. The complaint alleges that all of these drives more searches of Google at the expense of its rivals.

The critics of Google have been making similar arguments for years to fragment the tech giant or diminish its behavior. However, the US’s antitrust enforcers have long relied on the traditional standards for judging a monopoly by whether a firm is making the consumer pay a higher price for its products.

The Business of Google

Notably, Google controls more than 90% of global web searches, but it holds a smaller share in the online promoting marketplace.

“This is an argument we can expect Google to make a lot and make it loudly, that its customers are the advertisers, but there are a lot of antitrust law professors who would say that consumers pay a real price for something like a search engine, there’s a real cost to us, in terms of privacy, attention, and data. It may not be dollars and cents. But it’s that price we should be concerned about.”

– Rebecca Allensworth, a Law Professor at Vanderbilt University (2).

Google work on its business by scooping up the personal data of billions of people who are searching online, watching Youtube videos, talking to its voice assistant, following digital map routes, or using its phone software. Then it uses the data to feed the advertising machine, which has turned Google into a Gargantua.

The tech giant has long denied unfair competition claims and is fiercely opposing any attempt to spin off its services into individual businesses. Google clarifies that even though its enterprises are large, they are beneficial and useful for users.

“People use Google because they choose to — not because they’re forced to or because they can’t find alternatives.”

– Google (3)

But the Justice Department alleges that Google deprives rival of the quality reach and fiscal position necessary to mount any meaningful competition to longstanding monopolies of the tech giant.

The complaint also mentions the privacy loss and use of customer’s data as quality issues, although there were no elaborations.

Rivals such as Yelp, Tripadvisor, and Expedia, who run specialized search businesses, have long alleged that Google’s business practices harm them.

“The antitrust charges are good for consumers and could help preserve a vision of the internet as a place of transparency, “the wisdom of crowds” and vigorous competition. They provide the framework for meaningful action to stop Google from leveraging its gatekeeper position to benefit its owned services and increase its profits at the expense of competition and consumers.”

– Seth Kalvert, Senior VP and General Counsel of Tripadvisor (4).

Simultaneously, there is no certainty about how much America’s average citizen cares about the impact of Google’s market dominance and how it is using people’s data. The company has historically ranked top in surveys of user trust. However, the growing awareness about the loss of digital privacy and repeated and unfounded claims about the tech giants’ bias by President Donald Trump has left some cuts in its reputation.

In some way, the lawsuit is a repeat of the Justice Department’s last big antitrust against a tech giant. More than two decades ago, the US government sued Microsoft, accusing it of leveraging a monopoly postion to lock customers in its products so they won’t be tempted to choose the potentially superior products of the smaller rivals.

30% Toll for Gate Keeping

While on the topic, let’s discuss the issues that have triggered a revisit to India’s digital monopoly issues. Recently, Google stated that it would enforce a Google Play rule that would require all listed app developers on the platform to use its in-app payment system. With the move, all Android developers would be forced to use the giant’s billing system, which takes a 30% fee on payments.

In simple words, any app that a common user would download from the Google Play store and use that app to pay for its services such as subscription, purchase of products, etc., the developers would have to pay 30% of that amount to Google.

If you use an android app that you downloaded from Google Play Store and apply for a Certificate for which you normally pay 100 INR, you would now have to pay 130 INR, where 30 INR would go to Google.

The same goes for buying a song online, or watching an online video, and so on. You would have to tip 30% to Google. The tax developers have to pay to Google for operating in the “Kingdom of Google.”

Payment gateway service is the service that the tech giant is professing to offer. However, the usual charges for a payment gateway service are between 0.5% to 3% at maximum.

A 30% charge for a payment gateway is not heard anywhere across the globe. At best, it is rapacious. Moreover, how and why it can charge such criminally usurious rates? It is because Google has an unshakeable and monopoly on your phone. It is now also increasing on your television where the tv or the set-top box comes with the giant’s Android operating system.

Dominant Position of Google in India

The tech giant has some interesting defenses for its insatiable charges. It stated that the app developers are free to host their app on any other app store. Google is not stopping any developer from hosting its app on other platforms. It is very philanthropic of Google to allow Indian citizens to host their apps on whatever platform they want.

Can one smell the Digital Colonization and Technical Sovereignty issues? Who is Google to allow a free society from doing what they want? What other app store do we have out there? The App Store of Apple? Notably, it is already charging similar charges.

However, society is not raising an issue with the App Store as a very limited set of people in India uses the platform. However, Android phones are prevalent in India. Android phones come with Google Play preloaded, ensuring that everyone only uses their app store and other rivals face a competitive disadvantage. It is brought by Google misusing its dominant position in the smartphone OS market.

Google and Its Court of Law

Google is bundling its app store in its operating system is a violation of the competition act and misuse of its dominant position via a series of vertical agreements. The biggest question is: Would Google allow any other app store to bundle in when distributing its OS?

For instance, does it enable App Bazaar, an Indian app store, to bundle with Android on every device? The clear answer is no. So how people can download an app from any other app store but the Google Play Store.

If there were a competitive play, the Google payment gateway charges would be similar to other payment gateways outside its ecosystem where the real competition exists, about 3% and not 30%.

The giant came out with another interesting point in its justification. According to the firm, it would allow Indian app developers to take fees from their users outside of the app, like their websites. It means, while using an app, people have to go separately to another website on their browser and make the payment. Is it even attainable from a usability viewpoint?

The most distressing part of the digital power’s squalid show is that the Indian government acknowledges this issue. The Meity, the Ministry of Electronics, and Information Technology want to resolve it immediately. However, it is observing itself against a digital wall of significant balances.

Meity is also toying with the idea of opening up the Indian government app store, an incidental brainchild of the current Secretary. The digital wall that it is challenging is that the Indian government has no control over the Android platform. And it has limited means to detach people into their app store or any other app store.

It means that the functioning of the mobile platforms, the integral part of our lives that control almost all aspects of our lives, is outside of our government’s jurisdiction. A few private companies rules and regulates these platforms. What makes it even further enthralling is that non of these private entities are Indian.

The fact that makes it more captivating is that these giants have their “judicial system” and “court of law”, where they decide which apps need to be punished or banished because they violated the digital monopolies’ laws.

Resemblances Between East India Companies and Digital Monopolies

Over a decade ago, there was a situation where the US firms used to control most of the digital payments in India. And the US government suddenly asked these companies to stop their operations because they did not like something India did.

Imagine if our troops were battling at the front, we would lose the war as the economy behind them would get clogged because all digital payments would have stopped. It would jeopardize the logistics, supply chain to the on-going conflict.

A few weeks ago, something like this happened where Google kicked out Paytm from its Play Store on fallacious grounds. The time has come for India to open its eyes to the powers to let the digital platforms expropriate.

Didn’t we read about a similar incident in our history books? The East India Company, another corporation, slowly usurped power, then brought its rules that started to control people’s lives and then slapped them with ferocious taxes.

Now imagine if Google suddenly decides to stop its Map services in the country. What would happen? It would destroy billions of dollars worth of businesses built in the country over Google Maps. It would make millions of drivers of aggregated cab services jobless, ultimately causing severe repercussions on our economy.

Conclusion: High Time for India to Limit the Spread of Digital Monopolies

These instances indicate the misuse of monopoly power. That’s why the country needs to have its app store and regulations to keep monopolies like Google on a leash.

Unfortunately, it would not be an effortless job since digital monopolies are natural; however, India must work towards stringent competition laws and regulate these platforms.

Today, these platforms are public utilities and part of our Rights of Free Expression, and hence Indian authorities must strictly regulate them.