A US lobby group representing tech giants Google, Amazon, and Apple has urged India to reconsider its proposed EU-like competition law, warning that regulations targeting data use and preferential treatment of partners could lead to higher costs for users, according to a letter.
Citing the growing market dominance of a few large digital companies in India, a government panel proposed in February to impose obligations on them under a new antitrust law. This law would complement existing regulations, which the panel described as "time-consuming" to enforce.
India's proposed "Digital Competition Bill" is modeled after the EU's landmark Digital Markets Act of 2022. It would apply to large firms, including those with a global turnover exceeding $30 billion and whose digital services have at least 10 million users locally, bringing some of the world's largest tech companies under its purview.
The proposed law aims to prevent companies from exploiting the non-public data of their users and from favoring their own services over those of competitors. It also seeks to eliminate restrictions on the downloading of third-party apps.
According to a letter dated May 15 from the U.S.-India Business Council (USIBC), a part of the U.S. Chamber of Commerce, to India's Corporate Affairs Ministry, which is responsible for drafting the law, these strategies are often used by companies to introduce new product features and enhance user security. Restricting them could hinder their plans, the letter argues.
The USIBC letter, not publicly released but seen by Reuters, suggests that the draft Indian law is much broader in scope than the EU's equivalent legislation.
The USIBC, which has urged India to reconsider the proposed law, did not respond to queries from Reuters, nor did the Corporate Affairs Ministry, Apple, Amazon, or Google.
India, with a population of 1.4 billion and a growing affluent class, represents a lucrative market for major tech companies. Apple CEO Tim Cook stated earlier this month that the company achieved a "revenue record" in India during the March quarter, despite a 4 percent decline in its global revenue.
The Indian panel argues that the new law is necessary because a few large digital enterprises "exercise significant control over the market". Similar to the EU, it proposes penalties of up to 10 percent of a company's annual global turnover for violations.
The Competition Commission of India (CCI) has been investigating major tech firms for several years.
In 2022, the CCI fined Google $161 million and instructed it to stop restricting users from uninstalling its pre-installed apps and allowing downloads without using its app store. Google denies any wrongdoing and claims that such restrictions enhance user security.
Amazon is also under investigation for alleged favoritism towards certain sellers on its Indian website, an accusation it refutes. Apple similarly denies allegations but is being investigated for alleged abuse of its dominant position in the apps market.
A coalition of 40 Indian startups has expressed support for the new Indian law, stating that it could help address monopolistic practices of dominant digital platforms and establish a fair playing field for smaller companies.
Although there is no set timeline, the Indian government will review feedback on the proposal before seeking parliamentary approval, with or without amendments.
