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Syllabus
- GS-2: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.
- GS-3: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment
Context: There are allegations and concerns raised across the globe that big tech companies like Amazon, Apple, Google and Facebook, have exploited, entrenched and expanded their power over digital markets in anti-competitive and abusive ways.
- Also, due to their metastatic growth, they now have a vast influence on politics, policy and personal reputations across the spectrum, making cost of data privacy breaches by these firms catastrophic.
What are the concerns of each platform?
- Amazon: It is an online sales platform has disrupted the traditional business of retail sellers and small business. Allegations that Amazon favours its own self-branded products over those of third-party sellers through manipulation of search results.
- Apple: Its App Store policies, specifically regarding how Apple ranks search results on that platform, is questioned as it has lead exclusion of certain competing apps from the Store (Ex. Spotify). Questions have also been raised on how Apple determines the share of revenue it takes from in-app purchases
- Facebook: Regulators have focused their attention on Facebook’s acquisitive streak in capital markets, for example, the U.S. Federal Trade Commission (FTC) enquiry into whether Facebook defensively purchased certain companies (Instagram & Whatsapp) to maintain its dominant market position in the social networking ecosystem.
- Google: This company handles more than 90% of online searches across the world. In recent years concern has grown over the fact that Google has increasingly been sending users to its own sites to answer their queries, including products such as Google Flights and Google Maps.
- Thus there are allegations of abuse of its dominance in internet search, advertising and its mobile system, to the detriment of rival content producers. The European Union has already fined Google $5.1 billion in 2018.
In India, why has the News Broadcasters and Digital Association locked horns with Google?
- On October 6, the News Broadcasters and Digital Association (NBDA) approached the Competition Commission of India (CCI) against search-engine operator Google, alleging that the Google had deprived them of their justifiable revenue acquired from news dissemination on the google’s platforms.
- The complaint would be clubbed with similar cases filed by the Indian Newspaper Society (INS) in February 2022 and the Digital News Publishers Association (DNPA) in 2021.
- As per the NBDA, Google’s search engine commands a 94% market share in the country.
- The dominance of Google becomes all the more concern for news publishers with the increased transition toward news consumption online (inclusive of app-based consumption).
- The traditional newspaper industry in India has sustained itself on a business model wherein advertising accounts for two-third of its total revenue.
- On similar lines, with online proliferation, there is an increased reliance of news publishers on digital ad revenues, and in turn, tech-based companies.
- The search engine, by way of its algorithms and internal quality vetting, determines which news websites would be prioritised in search queries. Therefore, search engines are an important determinant in online news consumption.
- More than half of the total traffic on news websites is routed through Google.
- Readers would more often opt for an online web search rather than reaching out to a specific news website by typing its URL in a browser. This has made search-engines the first port of call for information online.
What are the key allegations?
- Google has been found to be dominant in both markets of relevance to digital publishers — online web search services and digital advertising services.
- A news website sells advertising spaces on its platform through ad-exchanges. In addition to this, Google also operates a platform that manages a publisher’s sale of online ads and tools to purchase display ad space.
- The central contestation among the parties holds that the google has not compensated news publishers for their contribution to (Google’s various) platforms.
- It is also alleged that Google has engaged in practices to bolster its monopoly in the space.
- The DNPA had put forth that website publishers receive only 51% of the advertisement revenue.
- It has been alleged that owing to the tech-giant’s dominance in the space, publishers have been “forced” to integrate content on their platforms. They have no other alternative but to trade in the company’s exchanges and use its buying tool, Google Ads/DV 360, to receive bids from advertisers.
- Additionally, the tech-giant has been accused of “forcing” members into using their Accelerated Mobile Pages (AMP) or building mirror-like ‘light-weight’ webpages. Failure to do so would have bothered their placements in mobile search. It is essential to note here that if the reader does not click on the snippets and enter their websites, it limits the website’s potential to earn revenue.
- And lastly, directing an investigation into the matter earlier this year, The CCI had, earlier this year, also made a note of the tech-giant’s alleged “unilateral and non-transparent” determination and sharing of ad revenues.
- The case also brings forth the issue of alleged lack of transparency and information asymmetry in the ad-tech services provided by Google, which does not optimise the yield on their ad inventory. This bothers the quality of services and innovation in the news realm.
What is happening outside India?
- In February 2022, the European Publishers Council filed an anti-trust complaint against Google with the European Commission, challenging its existing “ad tech stranglehold” over press publishers.
- European Commission noted that “Google’s ad-tech suite is full of conflicts of interests, as Google represents the buyer and the seller in the same transaction, while also operating the auction house in the middle, and selling its own inventory”
- Australia introduced the ‘Media Bargaining Code’ in February 2022 to address the imbalance.
- The code requires news outlets to negotiate commercial deals individually or collectively with Facebook and Google with violations calling for civil penalties of up to $10 million.
- The tech firms would also have to give media outlets notice when they change search algorithms that may affect publishers’ content.
What has been the stand of Google with regard to such restriction being imposed?
- On multiple occasions, Google has expressed concerns over such legislations. Google argues that “The internet was built on the ability to link freely between websites, which allows people to easily browse the internet. Changing this would fundamentally break the way the open web works, and how people use Google search.”
- According to Google, the revenues accrued are spent towards defraying the costs of running “a complex and evolving business” such as maintaining data centres, further technological investments, enabling innovations that increase publisher revenue and maximising advertiser return on investment, among other things.
Main Practice Question: What are the challenges to regulating Big Tech in India? Analyse.
Note: Write answer his question in the comment section.
