CIOInsider India Magazine

For one India's population is useful in fetching a huge user base for big tech companies like Twitter, Facebook, Flipkart, Amazon, WhatsApp, and Google, aside from over-populating the country. These firms have thrown billions of dollars over the years to onboard as many internet users as they can onto their platform. For time and time again, this has helped boost their growth and offer better services to their users.

However, a day came when they had to clad in fear of losing their user base if they failed to abide by the laws of the land. Be it Indian e-commerce laws or Information Technology rules, surely the Indian government gave ample amount of time and also allowed for the appointment of a grievance officer for these firms to comply with the laws. But most of these firms didn’t quite budge and it ended up looking like India versus foreign firms over the compliance of these laws.

The main reason why the Indian government is stressing over these laws, especially with social media giants, is that the nation is highly concerned about online content. As in the circulation of explicit or offensive content and has grown over-cautious regarding the circulation of misleading content. Clearly, it’s the individuals who are responsible for such content, but the government feels the need to establish certain restraints around such content.

At the same time, it almost means taking away freedom of speech, as they are the very reason why social media exists in the first place. In fact, Twitter almost lost its legal protection and intermediary status during the course of proceedings with the nation’s law.

Twitter Finally Complies with India's New IT Rules
Perhaps one of the most notably long brawls with the Indian government over IT rules. After much court proceedings, the social media giant finally complied with the rules. Until then it almost suffered the loss of its intermediary status and legal protection that affected its operation in the nation, let alone all the direct negative remarks it took from top officials in the Indian government.

Yet some Big techs still remain rebellious over these rules, since the new social media guidelines enforce social media to offer encrypted messaging services to create a mechanism to track the sender of messages in all circumstances. Firms like Facebook’s WhatsApp and Signal have not complied with these rules, with WhatsApp filing a lawsuit against the Indian government. Does this smell like another 2021 match about to get started? Well, it might seem true, given how long the social media giant fights against budging with these laws.

But on a global term, India is not the only nation imposing new IT rules and e-commerce rules onto Big Tech, in fact, a lot of countries are coming with their own set of rules for the same as well.

That aside, e-commerce giants are also not spared in India’s new e-commerce laws, with Flipkart and Amazon dealing with a series of proceedings for forex violation and antitrust laws. For a long time, both firms have been on trial for causing disruptions in the competitive space, selling their products on an international brand’s platform. Flipkart and Amazon have been quite the troublemakers when it comes to abiding by India’s laws and regulations.

Rs.10,600 Crore Fine Against Flipkart Over Forex Violations
While the e-commerce giant is already in a pool of antitrust investigations, it has now sunk deep with breaking the foreign exchange law (FDI) and is held responsible to pay the price of Rs.10,600 crore. Its founders Sachin Bansal and Binny Bansal, as well nine other individuals and entities are also expected to pay this price. The charges include violations of Foreign Direct Investment (FDI), particularly those that control multi-brand retail. Then there's the accusation of causing upheavals in the competitive market, citing exclusive mobile phone launches, select seller promotion, and deep pricing techniques. Amazon has also been accused of providing merchants preferential treatment, but it has disputed this.

Despite the fact that the Competition Commission of India inquiry has been ongoing for nearly a year, the High Court in southern Karnataka has denied Amazon and Flipkart's pleas.
The two companies have now been directed to appeal the ruling to the Supreme Court of the United States.

Is this India's Strategy of Promoting its 'Make in India'?
The emergence of India's domestic platforms like Reliance Jio, which benefits from the government's more harsh attitude on foreign Big Techs as it strives to develop its own apps and services particularly Jio being one.

Other factors include the government's political aspirations, including Prime Minister Narendra Modi's quest for self-sufficiency and pleasing Hindu religious interests. Another element is India's famous ‘Make in India’ strategy, which aims to revive the country's manufacturing industry through increased domestic and foreign participation.

“While traditional media is easier to control, social media is more difficult due to the fact that it is user-generated and amplified. It is easy to see why the government wants to exert greater control over social media companies and set very strict content moderation rules”, says Bhaskar Chakravorti, Dean of Tufts University's The Fletcher School of Business.

However, it is also claimed that regulatory monitoring of data protection, privacy, election influence, and disinformation has intensified in recent years.

Digital rights groups and technology experts have criticized some of the newest restrictions for being excessively focused on the government's political goals in terms of gaining more control over social media businesses.

Keeping Big Tech in Check
In recent months, the Indian government has taken a strong line against Big Tech, from combating fake news to prohibiting monopolistic behavior.

In India, misinformation is a problem that spreads quickly through social media platforms.
For example, three years ago, a WhatsApp hoax allegedly led to the deaths of several people in India.

According to Trisha Ray, an associate fellow at the Observer Research Foundation's (ORF) Technology and Media Initiative, anti-competitive practices by big tech companies have also drawn regulatory scrutiny, particularly measures that are perceived as disadvantageous to Indian firms.

Silicon Valley's social media platforms have a massive following in India, and the battle is about who controls these users, says Tarun Pathak, research director at Counterpoint Research in Delhi. In the next three to five years, India will add 300 million new users, roughly the same as the US’ population, tipping the balance of power eastward for these companies.