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How to prevent Big Tech dominance, protect privacy and ensure fair competition

June 13,2024

In 2008, YouTube ran an animation video in which a man who signed up for a free service called ‘Google Toilet’ is seen sitting on a commode, while the smart pot projects ads on the wall in front of him by detecting his food preferences from his excreta and displays his social media status based on his toxicology report.

Ultimately, paramilitary forces storm the lavatory and arrest him because the government has taken exception to his deviant food habits. When he protests against this invasion of his privacy and invokes the Bill of Rights, confirming that the scene is set in the US, he is told that he has nobody to blame but himself because by signing up for a free smart commode, he joined the Google Toilet network embedded with secondary disclosure agreements.

Counter-arguments, on the other hand, presented by SSDEs (systemically significant digital enterprises) – Alphabet, Meta, Amazon, et al – opposing the Bill are not particularly credible. These include the following notions:

That removing self-preferencing – an online platform’s ability to promote its own products, or those of a related party, above that of others – creates customer dissatisfaction.

This may have warranted due consideration if SSDEs were in the business of selling shaving foam. But the dominance of online platforms like Meta and Google in India is such that ex ante regulations become necessary to curb the existential threat posed by Big Tech with regard to the non-dominant and nascent digital ecosystem.

Self-preferencing and exclusive tie-ups with shell entities improve user engagement and retention, but act as an addictive content loop the user cannot escape. This creates a restrictive trade practice that is difficult to reverse over time.

That explicit user-verification measures drive consent fatigue and adversely impacts innovation.

This argument favouring innovation over authorisation is outrageous. Current opt-in permissions don’t work. Studies show that, at 250 words per min, it would take at least 30 days each year to peruse end-user licence agreements.

Thus, users provide consent without understanding future data utilisation objectives, while digital platforms continue to synchronously harvest personal data. This has forged many unfortunate, and irreversible, outcomes.

Recently, New York City filed a lawsuit against Meta, Snapchat, TikTok and YouTube, claiming that their platforms were addicting and endangering children, and promoting unsafe behaviours. Litigation against Meta in 40 other US states allege the same. The magnitude, scale and speed at which such platforms operate demand ex ante regulation, if the real interests of consumers are to be protected.

This argument is also without merit. Section 4 of the Competition Act suggests that actions are anti-competitive only if carried out by ‘a dominant entity in its relevant market’. Since the onus of proving dominance and identifying the relevant market rests with the regulator, enforcement proceedings are invariably delayed. In one instance, filed before CCI in 2018, involving abuse of dominance ‘by a licensable operating system (‘OS’) for smart mobile devices’, the case is yet to reach the Supreme Court. In another, the case has been in limbo for 11 years. In such cases, ex post redressal is untenable.

And if these reality checks on what constitutes efficient ‘customer satisfaction’ and ‘customer convenience’ are not convincing enough, something more fundamental could make ex ante regulation necessary. As sole providers of public digital infrastructure, SSDE dominance can cause chaos through a single disruption. Meta’s deleterious effect in this regard is well known: its intentional blocking of social media in Australia, and disrupting fire services, health services and vaccine rollouts during the pandemic; its disruption of newsfeeds in 2018 in Bolivia, Slovakia, Sri Lanka, Serbia, Guatemala and Cambodia; and its part in precipitating the exodus of 70,000 Rohingya people, tantamount to subverting the machinery of law and order.

As recently as April 2024, Google received authorisation to work with US intelligence and defence agencies, enabling them to use Google’s air-gapped cloud platform ‘to process top- secret workloads’. Given Google’s status as a foreign defence contractor that manages millions of records of sensitive data, can India really afford to oversee SSDEs by initiating the process of discovery and action after the fact?

Protecting the welfare of citizens is the essence of national security. Protecting public interest, that of national sovereignty. Often at the expense of accelerated short-term growth. The Digital Competition Bill, which aims to contain matsyanyaya – a law, or absence thereof, which allows big fish to eat little fish – is the first step in this direction.

Ultimately, GoI will need to decide if a billion ‘free smart toilets’ are worth any sort of compromise.

Source: Economic Times

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