US tech lobby calls on India to change proposed digital competition law

A US lobby group representing tech giants Google, Amazon and Apple has asked India to revise its proposed competition law along the lines of the EU. According to a Reuters report, the group claims that regulations prohibiting the use of data and preferential treatment of partners could increase user costs.

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

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

The aim of the bill is to prevent companies from using non-public user data and promoting their own services over competitors, as well as lifting restrictions on downloading third-party applications.

The US-India Business Council (USIBC), part of the US Chamber of Commerce, in a May 15 letter to India’s Ministry of Corporate Affairs argued that such restrictions would make it more difficult to bring new products and security features to market, potentially leading to a reduction in investment in India, higher prices for digital services and fewer service options.

According to the letter, which has not been made public, the Indian bill has a “much broader scope” than the EU bill. USIBC did not respond to Reuters requests for comment, nor did India’s Ministry of Corporate Affairs, Apple, Amazon or Google.

India, with its population of 1.4 billion and a growing affluent class, is a lucrative market for large technology companies. Apple CEO Tim Cook recently highlighted the company’s “record revenue” in India in March, even as its global revenue fell 4 percent.

The Indian panel justifies the new law by saying that a few large digital companies “have enormous control over the market.” Like EU rules, it recommends penalties for violations of up to 10 percent of a company’s annual global turnover.

The Competition Commission of India (CCI) has been keeping an eye on the largest technology companies for years. In 2022, the CCI fined Google $161 million, demanding it stop restricting users from deleting pre-installed apps and allow apps to be downloaded outside its store. Google denies any abuse, saying such restrictions make users safer.

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

On the other hand, a group of 40 Indian start-ups supports the proposed law, arguing that it could curb monopolistic practices by dominant digital platforms and create a level playing field for smaller companies.

The Indian government will take stock of views on the proposal before seeking parliamentary approval, with or without amendments. There is no set timetable for this process. India will have a new government in June.