NECESSITY OF REGULATING BIG TECH GIANTS

INTRODUCTION

Google, Facebook, and Twitter are some of the largest companies in the world in terms of their market cap. These companies have become a kind of monopolies, by achieving a degree of supremacy in their sectors. Facebook has a subscriber base of around three billion people, and if it were to be a country, it would be the largest country. Most of these big tech companies are based on the concept of social networking as a result, their whole offering is based on a strong network effect, and their entire business model is based on their ability to acquire more and more people. As a result, the major tech businesses are inevitably pushed toward monopoly, since as their user base grows as a result of the strong network effect, they eventually establish a dominating position in the market. So, some of the early starter companies which take the lead and end up establishing a monopoly would try to retain their position by acquiring the smaller company, restricting their services to a few devices, etc. Though these tech giants directly do not charge for using goods & services, they are indirectly trading data of the users, which is monetized. So the data collected brings large revenues. . There have even been instances when these corporations have been involved in breaches of their consumers’ data privacy, and they have a history of pursuing aggressive, anti-competitive tactics. In conclusion, these large IT businesses have a significant political, social, and economic effect on the world.

HOW DID THESE TECH FIRMS BECOME SO BIG

 Mostly these companies were started very small or to serve some other purpose but later they grew to become so big for example Facebook started as “Facemash” by Mark Zuckerberg for the students of Harvard and then it quickly took off across Harvard and spread across the world. In 2012, Facebook became the first social network to reach 1 billion. Also, these big tech giants have done many acquisitions to become so big. Google acquired Youtube for $1.7 revenue of billion now annual Youtube is more than $1bn. With the huge economic power, these big techs have acquired many small firms.

Though they also gained share because of their consumer perspective for instance Apple brought cutting-edge technology to customers by the way of the iPhone or MacBook. Google brought an extraordinary search engine providing with further developments it updated it with local languages which in turn made it easy to access even to rural people of the country and further helped in increasing its market share. Google also provided email services and later came with navigation, data storage. Many companies use Google maps API like Ola and Uber. Facebook enabled people to share information easily it helped people to connect with people around the world. These platforms increased the quality and quantity of information available to the consumer and helped them to make informed choices which helped them gain a dominant market share.

WHY DO WE NEED TO REGULATE BIG TECH GIANTS

Companies compete with each other to provide the best experience to the consumers and they are encouraged to innovate and provide new features. Though the motivation of growing revenue is driven by self-interest, society at large is also benefited because of this. Competition is beneficial to everyone. Economy benefits through efficient allocation of scarce resources which promotes innovation leading to dynamic efficiency. As a result, productivity rises, resulting in rapid economic expansion. Competitive markets maximize production and help to raise people’s living standards by ensuring effective use of resources. In contrast, when there is a lack of competition, whether it is a price-fixing cartel or a dominant company abusing its market position, both the consumer and economy suffer. Recently the Competition Commission of India (CCI) found in its report that Google abused its dominant position in the Android operating system in India by hurting the competition. In the report, CCI held that “Google reduced the ability and incentive of device manufacturers to develop and sell devices operating on alternative versions of Android”[1]

Many people have alleged that these platforms allow the proliferation of hateful and false content. Also, it is seen that these sites are blocking accounts or deleting posts. Recently Former U.S President Donald Trump was banned by all major social networking sites. As these sites have become very important in today’s life restricting anyone without a fair hearing may have an impact on their carrier or prospects. Another criticism is the handling of data by these sites, intentional intrusions, inadequate privacy practices this has also resulted in the stealing of the personal data of users. These all make regulating tech firms very important. Also, it is observed that these firms are misusing the safe harbor provisions provided to the intermediaries under Section 79 of IT ACT 2000 to protect themselves from any wrong committed on their platforms. The act protects intermediaries from being held liable for the content, data, and communications in certain cases. It holds that “(1) Notwithstanding anything contained in any law for the time being in force but subject to the provisions of sub-sections (2) and (3), an intermediary shall not be liable for any third party information, data, or communication link made available or hosted by him.”[2] An ‘intermediary’ has been defined as “any person who on behalf of another person receives, stores or transmits that record or provides any service to that record and includes telecom service providers, web-housing service providers, search engines, online payment sites, online auction sites, online market places, and cyber cafes.”[3] These platforms are actively engaging in deleting posts, banning accounts or restricting content all this is being done by non-transparent medium and users don’t even get a proper grievance redressal mechanism to address their concerns this could further lead to biased content on the platform.

Further, the provisions of sub-section (1) shall apply if-

(a) the function of the intermediary is limited to providing access to a communication system over which information made available by third parties is transmitted or temporarily stored or hosted; or

(b) the intermediary does not –

  1. Initiate the transmission,
  2. Select the receiver of the transmission, and
  3. Select or modify the information contained in the transmission;

(c) the intermediary observes due diligence while discharging his duties under this act and also observes such other guidelines as the Central Government may prescribe in this behalf.”[4]

This further, violates the core idea behind giving protection to these intermediaries as it was expected that these platforms are just the hosts of information and do not owe any liability on the content posted on their platform but by censuring or restricting the content by themselves their status of just being an intermediary should no longer be valid. This also infringes the rights of users

CONCLUSION

The technology industry has largely developed free from significant regulations, particularly when viewed in contrast to potentially related industries such as telephone services, radio, or television. Instead, the internet has largely functioned under the system of self-governance. We must prevent them from creating a monopoly, which they have already done, and we must guarantee that they do not misuse their dominating market position. Simultaneously, policies should support the positive externalities and socio-economic advantages that these company’s products and services provide. This is not to suggest, however, that the internet is a lawless zone or that it is unregulated by the central government but further new laws and regulations especially made to regulate social media and tech firms are required.

Author(s) Name: Kunal Thawani (Hidayatullah National Law University, Raipur)

References:

[1] ‘Google abused Android dominance, Competition Commission of India reports find’ (The Hindu, 18 September 2021) <https://www.thehindu.com/sci-tech/technology/google-abused-android-dominance-competition-commission-of-india-report-finds/article36535148.ece> accessed 16 February 2022

[2] Information & Technology Act 2000, s 79

[3]Information & Technology Act 2000, s 2 (w)

[4]Information & Technology Act 2000, s 79(2)

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