India eyes digital law to rein in Google, tech giants

In August, a US court in Washington, DC ruled that Google violated anti-trust laws and spent billions of dollars to become an illegal monopoly and maintain domination in web search and advertising markets. The landmark US ruling targeting the tech giant's dominance has given impetus to calls from startups and tech companies for similar action in India. 

The Alliance of Digital India Foundation (ADIF), an interest group representing the South Asian nation's digital startups, has filed a complaint with the Competition Commission of India (CCI). It said that Google's control over major online platforms, coupled with the fact that it derives 97% of its revenue from advertising, has stifled competition and adversely affected Indian businesses.

"These actions by Google have an adverse effect. We need a level playing field. This step by us is important to safeguard the market that operates on principles of fairness and transparency," Prateek Jain, associate director of ADIF, told DW.

India eyes Digital Competition Bill

The CCI, India's competition regulator, is currently examining a draft Digital Competition Bill to complement existing antitrust laws.

The draft bill aims to prevent anti-competitive practices and allows for heavy penalties in case of violations. It also aims to force tech companies to make fundamental changes.

"We will have to see how this shapes up and are carefully deliberating. We could see increased pre-emptive compliance on the part of large tech companies," a senior government official told DW on condition of anonymity.

Last year, the government constituted a Committee on Digital Competition Law (CDCL) to examine the "need for a separate law on competition in digital markets."

The draft bill currently identifies 10 "core digital services" such as online search, social networking and video sharing.

Strengthening India's digital startups

"No monopoly is permanent. In today's cyber world, every monopoly is likely to be scrutinized with microscopic attention by competition regulators to ensure the freeing of the digital market ecosystem from monopolistic shackles," Pavan Duggal, a cyberlaw expert, told DW.

"Since India is contemplating new digital competition laws aimed at regulating tech giants, the outcomes of international cases could trigger more stringent scrutiny and regulatory measures against companies like Google in the Indian market," he added.

The CCI has previously ruled against Google to prevent monopolistic practices in the Indian market. In 2022, it was fined over 13 billion Indian rupees (€139 million, $154 million) for abusing its dominant position in multiple markets with its Android mobile operating system.

This case was similar to the one Google faced in Europe, where regulators imposed a $5 billion (€4.34 billion) fine on the company in 2018 for abusing its Android market dominance in three key areas.

Murugavel Janakiraman, the founder and CEO of the Chennai-based matrimony.com, a network of matchmaking services, is hopeful that the new digital law will rein in big tech companies, especially when commercial app developers are forced to accept Google policy.

Last year, Google deleted popular Indian apps, including matrimony.com, from its Play Store, citing Google Play's billing system. However, Janakiraman obtained an injunction against the tech major in the Madras High Court.

"We cannot have this monopoly behavior. We also went to the CCI, which levied a penalty against Google," Janakiraman told DW.

One section of the industry believes that the government must think beyond legal measures and force Google to create a separate legal entity entirely located within India.

Leveling the playing field

Divyanshu Shukla, CEO and co-founder of PapSwap, a startup committed to citizen-centric governance, told DW that CCI's role will be crucial in navigating these complexities to balance market dynamics and safeguard consumer interests in India's burgeoning digital economy.

He pointed out that tech innovations can compete on the global stage by integrating global tech giants within the Indian legal framework, fostering competition, innovation and fair market practices that support both domestic and international growth.

"An Indian app store, though seemingly a solution, may fall short of addressing the issue fully as it could miss out on global tech innovations and opportunities," said Shukla.

"Instead, the focus should be on ensuring that global tech companies operate under Indian laws with a localized presence that aligns with India's regulatory framework. This approach would ease some of the burdens but still requires significant progress," he added.

Shrijay Sheth, founder of LegalWiz, a consultancy firm, said Google is close to a monopolistic position in India and is required to establish some level of accountability through regulations for the share of the market they hold alone.

"Several businesses have raised concerns around ranking fairness for ads, account suspension, stretched timelines to get back to 'compliant' status and material impact on business and, in some cases, almost losing all sales," Sheth told DW.

"This is an alarming level of control for one business to hold for the overall global trade."

India's digital market potential

According to various industry estimates, India will soon have over 1 billion internet users in a few years.

As digital advertising spending grows, industry leaders believe it is imperative to address market imbalances promptly.

"ADIF's complaint against Google embodies and symbolizes broader concerns about market fairness and competition in the Indian digital advertising landscape, and the recent US ruling could play a significant role in determining how and in which particular manner CCI is likely to move in this direction," said Duggal.