India's Conflict With Major Tech Companies to Escalate in 2023

In 2023, the conflict between India and U.S. tech companies is expected to become more intense as the Indian government creates its own regulations for the second largest internet market in the world. This unique combination of regulations will be a combination of Europe's stringent antitrust regulations and the Chinese government's surveillance methods.

It is expected that three major laws will be passed in 2023, which will likely cause both sides to become more entrenched in their positions.

At the end of December, an Indian parliamentary committee suggested that the government pass a digital competition act to address alleged anticompetitive practices by major tech companies. This act would prohibit platforms from favoring their own in-house brands or blocking out third-party payment systems, as well as outlawing practices such as forced deep discounting and exclusive partnerships. Sarvada Legal, a law firm that specializes in competition law, pointed out that this would bring India in line with the European Union.

The Indian government is in the process of creating a new telecom law that would give them more power over internet companies and increase their ability to monitor. This law would replace outdated laws, some of which were created during the British rule in India in 1885. This draft law suggests that licenses be required for services such as WhatsApp and Gmail, and it would also reduce the privacy rights of customers with demanding know-your-customer regulations.

Big Tech has largely expressed approval of India's proposed data protection bill, due to its less stringent data localization requirements. However, the retired judge who headed the committee that created the original version of the bill has labeled it as "Orwellian".

It is likely that American Big Tech will face more explicit opposition from India this year due to the potential consequences. Silicon Valley's leading role in India's rapidly expanding digital economy and the potential for tech giants like Meta and Alphabet to be used as tools in a more powerful Indian surveillance system are both politically risky. What would be especially concerning for these companies is if India's distinct approach is used as a model for other large, developing internet markets.

At the end of December, Google announced its intention to appeal the antitrust regulator's ruling to impose a $162 million fine for supposedly exploiting its powerful position in Android. Salman Waris, a partner at TechLegis, a tech-focused law firm in New Delhi, anticipates that Big Tech will continue to push back against such penalties and fines, both through lobbying to shape the language of new laws and in the courts.

Redseer Strategy Consultants report that India has 780 million internet users, making it the second-largest user base in the world, which is equivalent to more than double the population of the United States. It is projected that this number will exceed one billion by 2030, due to the increasing use of smartphones. The Indian government is aware of this and will use it as an incentive to reduce opposition to stringent laws.

In 2023, New Delhi and Silicon Valley are poised to engage in a competitive showdown.