Factbox – Indian antitrust law modeled on the EU, disturbing technology companies

Author: Arpan Chaturvedi

NEW DELHI (Reuters) – India’s proposed EU-style antitrust law will pose a new regulatory challenge for technology companies including Apple, Google and Meta, imposing stringent compliance obligations that could impact their business models.

The Indian government is currently reviewing the panel’s February report, which proposed a new “Digital Competition Act” to supplement existing antitrust laws. A key U.S. lobbying group has already opposed the move, fearing its impact on business.

Here are the key details of India’s proposal:

WHO DOES THIS LAW APPLY TO?

The bill would impact companies it calls “digital systemically important companies.” Entities with a domestic turnover of more than $480 million or a global turnover of more than $30 billion, as well as a local digital service user base of at least 10 million, will be covered.

Apple, Google, Meta and Amazon would be governed by Indian law, which has not yet been approved by Parliament.

WHY DOES INDIA WANT A NEW ANTI-TRUST LAW?

A government panel said new regulations are needed because the digital market is “becoming increasingly concentrated” and a few large companies exercise “tremendous control over the market.”

The panel said this means smaller digital companies and start-ups have to rely on larger companies, creating an “imbalance in bargaining power”.

WHAT DOES THE NEW LAW REQUIRE?

Companies will be obliged to act in a fair and non-discriminatory manner, and the bill recommends imposing a fine of up to 10% of a company’s global turnover for breaches – similar to the EU’s Digital Markets Act.

Large digital companies would be prohibited from using non-public user data and favoring their own products or services on their platforms.

Companies would also be prohibited from in any way restricting your ability to download, install or use third-party applications. They would also have to allow users to freely choose default settings.

The proposed bill and the feedback received will now be considered by the Ministry of Corporate Affairs, whose minister Nirmala Sitharaman remains in post after the Indian elections.

Which tech companies are already under scrutiny in India?

In India, Amazon and Walmart Flipkart are under scrutiny for promoting targeted sellers on their e-commerce platforms, harming rivals.

Google has been hit with antitrust fines and is in legal disputes over abusing its position in the Android mobile operating system market, including limiting users’ ability to remove pre-installed applications.

Google and Apple also face scrutiny for promoting their in-app purchasing systems, which the nonprofit group says hurts rivals.

All companies deny any wrongdoing.

(Reporting by Arpan Chaturvedi; Editing by Aditya Kalra and Sonali Paul)