• May 4, 2023

The conflict between Indian start-ups and Big Tech

GS 3 Indian Economy & Related Issues

In Context

• The Internet and Mobile Association of India (IAMAI) and some Indian start-ups are becoming more and more at odds with each other.

IAMAI’s opposition to the new law for tackling Big Tech firms:

• About
•  The Internet and Mobile Association of India (IAMAI) didn’t like how the Parliamentary Standing Committee on Finance wanted to make a new law to stop Big Tech companies from doing things that hurt competition.
• What were these recommendations?

• The panel suggested using ex-ante regulations, which protect consumers by mandating companies adhere to certain standards of behavior, to reduce anti-competitive practices in digital markets, as opposed to post-ante regulations, which can only punish an entiry after it has breached a law.
• There were also calls for the creation of a new digital competition law and the designation of Big Tech companies as “systemically important digital intermediaries,” which would subject them to additional regulations.
• In addition, it requested that digital market participants stop engaging in promotional methods such as “anti-steering,” “deep discounting,” “self preferencing,” “search & ranking preferencing,” and “other promotional practices that lead consumers to go for these companies.”

IAMAI’s concern

• In its report, the industry group IAMAI said it was worried that the recommendations in the Report of the Parliamentary Standing Committee on Finance are neither targeted nor proportional. It also said that these recommendations would “stifle innovation.”
• The AMAI said, “Lack of a well-articulated policy objective and failure to use an evidence-based approach to determine the need for the regulation have led to ambiguous, broad recommendations (in the report) that will stifle innovation, competition, and the benefits that accrue to markets and users.”

Similar concern as Big Techs

•  IAMAI’s views were similar to those made by the Asia Internet Coalition (AIC), an industry group whose members include big tech companies like Meta, Apple, Amazon, Twitter, and Google.

Criticisms by the start-ups :

“Pro-Indian” start-ups vs “Pro-foreign” big techs

• Some prominent Indian start-up founders sharply criticized IAMAI’s submission, accusing the industry group of advancing the viewpoints of large technology companies.
• It has been criticized for “repeating and promoting anti-Indian and pro-foreign Big Tech viewpoints.”
• Few others noted, “Start-ups strongly support a robust anti-monopoly Digital Act.” IAMAI is a failing lobby for propaganda and misinformation from BigTech. Etc.

Previous criticisms

• This is not the first time that startups have criticized IAMAI’s stances on crucial policy issues.
•  Earlier this year, a number of online gaming companies that are also members of the IAMAI wrote to the Ministry of Electronics and IT (MeitY) in opposition to the industry body’s submission on draft online gaming rules, arguing that the scoping of the rules was “poorly done” and that certain aspects required a “major re-write.”