To control WhatsApp and Massive Tech, India’s competitors panel wants extra enamel – and recent pondering

The Indian Competition Commission is committed to regulating big tech. Last month, the regulator ordered an investigation into WhatsApp’s privacy policy update, alleging the Facebook-owned company was in breach of antitrust law with its “exploitative and exclusive behavior”. This step follows the widely published update of WhatsApp’s data protection guidelines in January 2021.

What is ironic about this order, however, is its timing. The commission called for the investigation one month after the government announced the Intermediary Guidelines in 2021 to regulate social media intermediaries, over-the-top services and digital messaging. Under these new guidelines, the government is mandating a traceability requirement that forces social media platforms, including companies like WhatsApp, to track the sender of a particular message.

As a result, businesses now need to collect much more user data in order to provide user data when the government demands it. Such a commitment only affects end-to-end encryption and user privacy. On the other hand, the Commission has spoken eloquently about user privacy, the importance of user consent and the need to protect personal data in its most recent order. So what does it mean when the Indian Competition Commission investigates “exploitative behavior” to accommodate these new government demands?

Also, how does the Commission plan to investigate WhatsApp? In order to study a company’s data exchange practices, the Commission needs to understand the technical design of digital systems. For example, the UK competition authority has recruited data scientists, ethicists, behavioral experts, engineers, developers and artificial intelligence specialists to use new research techniques to understand the harm to consumers in digital markets.

The fact that WhatsApp can offer a take-it-or-leave-it policy to all users by itself is a by-product of its dominant position in the world of messaging apps. Photo credit: Christophe Simon / AFP

India’s competition policy

In India, however, we do not yet have any insight into the institutional capacity of the Commission. Do they have technically competent bureaucrats to handle such cases? Are they recruiting AI experts and engineers to understand big tech algorithms? These discussions are also not included in any of the Commission’s announcements.

We also need to understand India’s competition policy to fully understand the nature of these probes. India’s antitrust laws are under the auspices of a philosophy that supports corporate size and dominance. According to our competition laws, only the “abuse of dominance”, ie the imposition of unfair or discriminatory conditions or prices when buying or selling goods, is problematical. However, this may not be the right strategy for screening digital platforms for antitrust behavior.

First, India’s Competition Law sets out various factors that are taken into account when examining whether or not a company is abusing its dominant position, but these inappropriately capture the unique characteristics of the digital space such as network effects, blurring market boundaries and versatility and data aggregation effects.

The fact that WhatsApp can offer a take-it-or-leave-it policy to all users by itself is a by-product of its dominant position in the world of messaging apps. The company knows that most users are likely to accept the updated privacy policy as most of the other users they communicate with also use WhatsApp.

Merely focusing on the abuse of a dominant position can therefore help to achieve short-term goals by curbing monopoly power “then and there,” a method that has been adopted by the Indian Competition Commission, but which will remain rapid reactionary action if the The subject of regulation – the big tech platforms themselves – are not well understood.

Limitless market

Second, India’s competitive framework needs to be improved. The current law is based on a traditional understanding of the markets: so if you are doing an offline business in India, you are operating in a “relevant” market. But the digital medium is a new kind of space. It is limitless.

The core of the business model of technology platforms lies in dynamic innovation, and their market boundaries change accordingly. For example, how can you define the WhatsApp market? WhatsApp, whose original product offering was just a messaging platform, has now brought many other products, including peer-to-peer money transfer services, together on one large platform.

Third, the Indian Competition Commission, as an external regulatory authority, has to oversee Big Tech’s technical apparatus. Algorithmic systems are getting smarter by the day, causing new types of user harm. The Commission needs to be in sync with these developments. It needs to proactively investigate and identify these new types of damage that algorithms are causing in digital markets

Overall, there is an urgent need for new thinking if the Indian Competition Commission is to effectively regulate Big Tech in India. We need more political and legislative tools, interim remedial measures to combat potentially abusive behavior and new definitions of harm theories to review digital platforms. The Indian Competition Commission has so far only been reactive. Smartness and proactivity are essential toolkits in these times when user harm occurs in undefined ways.

Archana Sivasubramanian works at the Center for Political Research. She is also Area Editor, Algorithmic Governance in the Data and Policy Journal of Cambridge University Press.

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