Tech Giants Continue to Grow, Startups Failing as Antitrust Laws Fail to Promote Competition

Startups all over the world are being seen as centres of innovation where solutions for all kinds of problems will emerge. At the same time, tech giants such as Google and Amazon are growing bigger in their domains, with little external threats. In a bid to bolster the growth of startups, countries are reluctant to bring in any new regulation which could keep a check on these tech giants.

In India, Google was recently fined Rs 136 crore by the Competition Commission of India (CCI) for violating the Competition Act. This was hailed by many as a good move for rapping Google to keep its power in check. Still, the Competition Act is seen to be allowing big e-commerce players to exploit their positions of power as it lacks nuanced regulations for the current scenario.

All India Online Vendors Association spokesperson told Outlook that it wasn't just Google, all major e-commerce sites such as Amazon, PayTM, etc, are also involved in “the same dirty games.” 

“When we speak about them, they are not retailers but marketplaces. However, if you open their websites on any given day, you will find either their exclusive product or a particular seller’s product on their homepage,” the spokesperson said.

Introduction of the new regulation is often opposed on grounds of protecting startups in the country. At the World Trade Organisation meet in November last year, India strongly opposed any new global e-commerce laws. While the stated motive was to protect the up and coming domestic startups, numbers show that the same few giants still dominate the space, and startups are regularly reporting losses.

“If Internet applications like Google, Facebook and Twitter were the poster boys of the first decade of the millennium, this decade is dominated with a narrative of digital start-ups, apparently mushrooming everywhere in all sectors — from transportation, hotels and energy to finance, health and education. And a chimera of irrepressible outbreak of techno-innovation is supposed to carry on its shoulders another big wave of economic-liberalism, and anti regulation and anti public sector roles. Developing countries are especially being hoodwinked by another false dawn, and of course by the time they understand what's happening structural dominations will be entrenched too solidly, and they will be helplessly dependent on digital value chains tightly controlled form the North,” said Parminder Jeet Singh from IT for Change, Bangalore. 

As the same few giants get bigger, they also get access to increasing amounts of user data which helps them keep their dominating positions. Antitrust laws in India, US, etc are antiquated and ill-equipped to deal with the swathes of data repositories being built by the likes of Google. No serious competition can emerge from small digital startups as they do not possess enough information.

“Look at all the e-commerce and digital economy discourses coming from the WTO and other international bodies, even UN ones, and they'd like us to believe that the digital start-up explosion has just begun, and so just keep away any political or regulatory “interferences" and let it bloom, or you run the risk of becoming a permanent digital laggard. The problem is, most developing countries are taking the bait!,” Singh said. 

Google’s competitor search engine, Microsoft’s Bing, has a good user interface. However, it cannot compete against Google as Google has been around for much longer and possesses more data. Google can provide search results tailored for each user’s preferences since it has the advantage of having such a huge user database. Google’s marketshare in India in 2016 was 94%, while Bing’s was 4.7%. 

In this scenario, unless regulations are updated, there can be no expectations of any competition in these digital areas. Tech giants will continue to grow in power and dominance, either killing or swallowing startups.