Digital competition bill

Why trying to control Big Tech doesn’t always work.

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Digital competition bill

Digital competition bill:- Last month, the Ministry of Corporate Affairs (MCA) shared a plan called the Digital Competition Bill. Its aim is to spot unfair practices by tech companies.

Digital competition bill:- Efforts are being made to control Big Tech in India, similar to actions taken by the EU and recent lawsuits in the US against Apple for its dominant position. However, technology regulations have a history of not working well. Yet, governments continue to try. Mostly, it seems like just for show.

However, the Ministry of Corporate Affairs (MCA) put out a plan called the Digital Competition Bill last month. It’s open for feedback until April 15. Simply put, Big Tech companies based in India fall under its scope.

What’s intriguing is that the US is also increasing its focus on antitrust issues and taking legal actions against Apple. This aligns with its actions against other big tech companies like Google, Amazon, and Meta. Their main argument is that these companies have become too large, pose a threat to new businesses, and need to be split apart. This approach is often associated with Lina Khan, who has a strong legal background and is currently advising the US government after taking leave from her position as a full-time faculty member at Columbia Law School.

Digital competition bill:- However, changing how people see things doesn’t rewrite the past. Look at the big antitrust case against Microsoft in the late 1990s. Back then, Microsoft was seen as an all-powerful monopoly. After a long legal battle, the government’s so-called “fix” was just putting some technical rules and supervision on Microsoft.

Digital competition bill:- Microsoft kept getting bigger and stayed in control of computer operating systems and software like Office. But then, a new player called Google came along with a powerful new technology. Google challenged Microsoft’s main products, like Office, by offering its own solutions such as Gmail, Google Docs, and Google Sheets. The important thing to note is that Microsoft wasn’t overtaken by regulations but by a new competitor.

Similarly, as Google got bigger, regulators became concerned about its actions. But just as discussions started about splitting up Google, ChatGPT came onto the scene and shook things up. Google’s response to ChatGPT hasn’t been great so far. Interestingly, Microsoft bought ChatGPT to stay competitive in the AI field.

Digital competition bill :-Back home, when digital wallets were introduced, PayTM was the pioneer. In the rush to get customers, it seemed like PayTM, led by Vijay Shekar Sharma, would dominate the market. But Sharma didn’t anticipate UPI. UPI is part of India Stack, a system in development for some years. Aadhaar is another part of India Stack. With UPI’s arrival, all digital wallets had to include it in their services. This also meant wallets had to work together.

Digital competition bill:- To simplify, at first, a PayTM user could only send money to another PayTM user. But with UPI, it didn’t matter which wallet you used. Suddenly, all wallets like GPay, PhonePe, and PayTM were on the same level. The rise of this new technology shook up the dominance of the top player in the market.

So, let’s go back to our starting point. It doesn’t really make sense for India to copy what the EU or Khan suggests. The current legal attack on Apple probably won’t weaken its main strengths or its position as a top provider of high-quality hardware and software. Instead, it’s more probable that Apple will face competition from a creative entrepreneur who invents something new and makes Apple’s current offerings outdated.
The big lesson from past fights against dominant companies is this: By the time regulators notice a company acting like a monopoly and try to control it, that company might already be facing competition from fast-moving startups. Usually, a company that’s a monopoly today finds itself struggling to keep up tomorrow.

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