Challenge of Policing Tech Giants

The challenge of policing tech giants lies in regulating their vast influence, ensuring data privacy, curbing misinformation, and enforcing accountability while balancing innovation and free speech.

Table of Contents

Context: The Competition Commission of India (CCI) issued a landmark order, imposing a fine of ₹213.14 crore on Meta and mandating several behavioural remedies.

Role of Data in Market Dominance

Data as a Strategic Asset: In the 21st-century digital economy, data is the new oil but with virtually limitless utility.
- Unlike oil, data can be collected, analyzed, and reused indefinitely.
Competitive Advantage: Data provides insights into consumer behavior, enabling platforms to:
- Refine algorithms
- Offer hyper-targeted advertising
- Create personalized user experiences
Data-Driven Network Effects: More users generate more data → Data improves service quality → Attracts more users → Competitive barriers for rivals.
- Reinforces platform dominance, making it harder for smaller competitors to enter the market.
Lock-in Effect: Once platforms accumulate enough data, switching costs increase for users.
- Example: Meta’s data-sharing across platforms (WhatsApp, Facebook, Instagram) strengthens ecosystem dependence.
Market Entrenchment: Data enables predictive modelling and product improvements, creating a self-reinforcing loop of market dominance.

Global Actions Against Tech Giants

Country/Region	Tech Giant	Violation/Issue	Action Taken	Outcome
United States	Meta	Antitrust violations over acquisitions of Instagram and WhatsApp	Litigation under antitrust laws	Case ongoing
United States	Google	Violation of Sherman Act (2024) due to exclusive agreements in search and advertising markets	US District Court found Google guilty	Awaiting final penalties
Europe	Meta (Facebook-Germany Case)	Combining user data from various platforms without user consent	Found guilty under EU competition law and GDPR	Forced to revise data-sharing practices
	Google	Anti-competitive practices in mobile operating systems, app markets, and advertising	Fined over €8 billion in three cases	Fines upheld
	Meta	Ad-supported subscription service under scrutiny for potential anti-competitive practices	Investigation ongoing	Awaiting outcome
Australia	Meta and Google	Market dominance in digital platforms and online advertising	Introduced regulations to curb dominance	Strengthened consumer protections
Historical Cases (U.S.)	AT&T	Monopoly in telecommunications market	Ordered to divest 22 operating companies	Broke up AT&T’s monopoly
Historical Cases (U.S.)	Microsoft	Anti-competitive practices in the software market	Court-ordered oversight	Ensured API access for third-party developers and flexibility for PC manufacturers

Challenges in India

Competition Act, 2002: Lacks explicit provisions to address data-centric monopolies.
- The current framework focuses on price-based dominance.
Digital Personal Data Protection Act, 2023: Regulates data collection, consent, and usage but it lacks coordination between CCI and the Data Protection Board of India.

Suggestions for Improvement

Suggested Amendments to the Competition Act:
- Include “data monopolization” as a criterion for market dominance.
- Redefine concepts like “market power” and “dominant position” to reflect data-driven dynamics.
- Mandate interoperability and data-sharing agreements.
- Introduce separation of integrated services.
Align competition law with data protection laws, similar to the EU’s DMA (Digital Markets Act) and General Data Protection Regulation (GDPR).

Broader Economic and Regulatory Implications

Economic Survey 2024-25: Highlighted India’s rapid digital transformation.
- Emphasized the role of AI in shaping India’s economy.
Need for Future-Ready Regulatory Framework: Regulatory frameworks must adapt to address:
- Evolving market dynamics.
- Data-driven dominance.
- Emerging challenges from AI and big tech.