India’s Proposed Regulations on Technology Sector: Promoting Competition or Corruption?
The Indian government, led by prime minister Narendra Modi, has explored the possibility of expanding its powers to control how 1.3 billion people within its borders view and gain access to content on the internet.[1] Under the proposal, tech companies such as Google, Facebook, and Twitter would be required to remove posts at the request of the Indian government, along with integrating “automated screening tools” that would prevent the public from viewing “unlawful information or content.”[2] Furthermore, messaging platforms such as WhatsApp would have their privacy protections weakened under the proposal, enabling authorities to pinpoint messages to their original senders.[3]
Proponents of the proposed changes say that the rules are necessary to combat false and illegal information on social media, with the ultimate goal of holding platforms accountable for the content they display.[4] However, critics, including tech-giants Microsoft and Facebook, argue that the proposals are “technically impractical.”[5] In particular, Microsoft noted that the rules would require tech companies to “violate privacy and freedom of expression” and also be prohibitive from a cost perspective.[6] Furthermore, it would get rid of the existing safe harbor, employed by most countries, which exempts these companies from responsibility for inappropriate content, as long as it is removed once notified by a court or other designated entity.[7]
Regardless, the idea of holding tech companies more accountable[8] could be a guise for the ulterior motive of stifling the competition from foreign tech in favor of Indian companies.[9] Swaminathan Aiyar, a research fellow at the Cato Institute said of India’s technology policies, “There is a fear of being engulfed by the foreigner and there is a burning desire to create a national champion.”[9] That national champion could be Reliance Jio, a telecom company led by magnate Mukesh Ambani.[10]
Ambani had previously founded Reliance Retail, which has been ranked by Deloitte as the fifth-fastest growing retail company in the world, and has voiced his plan to integrate his telecom venture with his brick and mortar operation to build an empire that would be the primary service for India’s internet and telecom boom. [11]Ambani plans on growing Reliance Jio into an all-purpose information service: offering streaming video and music, messaging, mobile payment, shopping, and broadband service.[12] This goal would seem to encapsulate the offerings of companies such as Google, Spotify, Facebook, Twitter, and Amazon, amongst others, into one technology juggernaut.[13] Critics of the fast growing telecom company have called it “predatory” while accusing the Indian government of favoring Ambani’s business at the expense of other competition.[14] For example, while speaking at a telecom conference in Barcelona in February, Vodafone CEO Nick Read said, “I think it’s fair to say that for the last two years, we have had many regulatory outcomes that have worked against everyone in the market except (Reliance) Jio.”[15] Read has cited Indian tariff levels as being unsustainable as companies incur losses while maintaining large debt burdens and cap-ex commitments.[16] Read has called for telecom companies operating in India to come to a consensus on pricing in order to find a “healthy industry level.”[17]
Time will tell how India’s proposed regulations affect the country’s competitive landscape and overall growth as an emerging market.
Footnotes
