Tussle between Indian start-ups & Big Techs

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    In Context

    • There is a widening rift between some Indian start-ups and the industry body Internet and Mobile Association of India (IAMAI). 

    IAMAI’s opposition to the new law for tackling Big Tech firms

    • About: 
      • Internet and Mobile Association of India (IAMAI) criticised the recommendations of the Parliamentary Standing Committee on Finance to introduce a new law for tackling Big Tech firms’ anti-competitive practices
    • What were these recommendations?
      • To curb anti-competitive practices in digital markets, the panel proposed measures like having ex-ante regulations, which are meant to protect consumers by requiring companies to follow certain standards of behaviour, as opposed to post-ante regulations that can only punish an entiry after it has breached a law.
      • There were also recommendations for designating Big Tech entitites as “systemically important digital intermediaries’ ‘ and then subjecting them to certain ex-ante provisions, and the suggestion for a new digital competition law. 
      • Further, it asked digital market entities to desist from “anti-steering”, “deep discounting”, “self preferencing”, “search & ranking preferencing” and other promotional practices that lead to consumers going for these companies in the market, impacting competition.

    About Internet and Mobile Association of India (IAMAI)

    • About:
      • Internet and Mobile Association of India (IAMAI) is a not-for-profit industry body representing the interests of online and mobile value added services industry.
      • It is registered under The Societies Registration Act, 1860.
    • Mandate:
      • Its mandate is to expand and enhance the online and mobile value added services sectors.
      • IAMAI also put forward the problems and requirements of the businesses to the consumers, shareholders, investors and the government of India. 
      • The main purpose of the Internet and Mobile Association of India is to improve and expand the value added services pertaining to mobiles and several online services.
    • IAMAI’s concern:
      • IAMAI expressed concern that the recommendations in the Report of the Parliamentary Standing Committee on Finance are neither targeted nor proportionate, the industry body said in its submission, saying these would “stifle innovation” as well.
      • The AMAI said, “Lack of a well-articulated policy objective, (and) failure to adopt an evidence-based approach to identify the need for the regulation, have led to ambiguous, broad recommendations (in the report), which will stifle innovation, competition and the benefit that accrues to markets and users”.
    • Similar concern as Big Techs:
      • IAMAI’s submission was similar to the comments submitted by the Asia Internet Coalition (AIC), an industry association which also counts big tech companies like Meta, Apple, Amazon, Twitter, and Google among its members.

    Criticisms by the start-ups 

    • “Pro-Indian” start-ups vs “Pro-foreign” big techs:
      • IAMAI’s submission drew sharp criticism from some prominent Indian start-up founders, who accused the industry grouping of furthering views of big tech companies.
      • They have criticised it for “parroting and promoting views that are anti-Indian and pro-foreign Big Tech”.
      • Few others noted that “Start-ups are strongly in favour of a strong anti-monopoly Digital Act. IAMAI is a failing lobby for BigTech propaganda and misinformation”. Etc.
    • Previous criticisms:
      • This is not the first time that start-ups have criticised IAMAI for its views on key policy issues. 
      • Earlier this year, a number of online gaming companies, that are also members of IAMAI, had written to Ministry of Electronics and IT (MeitY) opposing the industry body’s submission on draft online gaming rules that the scoping of the rules was done poorly” and the some aspects needed a “major re-look”.

    Start-up ecosystem in India

    • About:
      • India has the 3rd largest startup ecosystem in the world; expected to witness YoY growth of consistent annual growth of 12-15%.
      • The pace of growth in the startup ecosystem has increased to 15% year-on-year in 2018, while the growth of the number of incubators and accelerators has grown to 11%
        • The Indian startups have gone on to raise sizable ticket sizes from various global and domestic funds. 
      • Role of Women:
        • Significantly, the number of women entrepreneurs stood at 14%, up from 10% and 11% in the previous two years (2021-22).
    • India’s startup city:
      • Bangalore has been listed within the world’s 20 leading startup cities in the 2019 Startup Genome Project ranking. 
        • It is also ranked as one of the world’s five fastest growing startup cities.

    Big techs of India

    • Who are they?
      • The term ‘Big Tech’ is used to refer to a handful of large, globally significant technology companies, such as Google, Facebook, Amazon and Apple. 
      • The term is sometimes used to refer to other large technology companies, such as Microsoft, IBM and Alibaba.
    • Presence in India:
      • Many of the global technology giants associated with the term Big Tech, such as Google, Amazon, and Facebook have a widespread presence in India. 
      • They have developed specific strategies for India, adapting to the needs of Indian markets and consumers. 
    • Significance:
      • These companies are celebrated for their innovative products and services which bring tremendous benefits to consumers, businesses, and governments. 
    • Criticisms:
      • But, they are also criticised for market monopolisation and undermining democratic processes.

     

    Daily Main Question

    [Q] What is the ‘foreign versus local’ issue between Indian start-ups & Big Techs? What is the significance of designating Big Tech entities as “systemically important digital intermediaries”?