Even to find the recipe of a favourite dish, we have got used to asking Google. Google's mighty search engine goes through millions of options to take us to the most appropriate one to satisfy our needs. And we are happy to have such great help. But if we ask for an air ticket and Google has an on-line platform to offer that service for fee, will Google prefer to guide us to that site first, before taking us to some other on-line providers with better offers? Basic theory of economic incentives tells Google will likely take us to its own service platform first. Such likely behaviour raises the issue of unfair competition.
As Google is the most favoured search engine, any service relying on such a platform is subject to experience unfair competition-if Google has its own competing service delivery business. To deal with such anticompetitive behaviour, this mighty digital monster has been fined. India has slapped $21 million and the European Union has imposed a fine of staggering $2.7 billion. Are these measures a wake up call for all countries to be aware of anticompetitive behaviour of digital platforms?
The Competition Commission of India (CCI) states, "...Google was leveraging its dominance in the market for online general web search to strengthen its position in the market for online syndicate search services." The European Commission's press release states similar reason, "Commission fines Google €2.42 billion for abusing dominance as search engine by giving illegal advantage to own comparison shopping service." The CCI ruled that Google had acted unfairly with regard to companies that incorporate its search engine in their own websites, by restricting their usage of competing services. Such ruling of CCI has been hailed as a landmark decision by some in the Indian technology industry, as it signals that sending millions of tax free dollars out of India and blocking Indian startups to build solutions for India is no longer tolerated. Basically, all countries, particularly developing ones, are suffering from similar situations in dealing deal with digital imperialism.
Google is not alone in sprawling imperialism across the world in monopolising digital space. Often-cited digital success stories like Facebook, Microsoft or Amazon are colonial powers in modern time. They get bigger and richer by monopolising the market. Due to growing monopolistic market power, digital divide has been rapidly increasing. Particularly, developing countries are finding themselves at the receiving end as consumers of digital goods and services delivered by global monopolies of rich countries. Although there are plenty of opportunities starting from online ticketing to healthcare service delivery, the entrepreneurial initiatives are facing unfair hurdles to compete with similar offers of mighty companies owning the underlying technology platforms, whether service engine, social networking, or the local telecom network. Such market dominance not only means fewer competitors and less innovation, but it also raises serious barrier for entrepreneurs from developing countries to leverage global digital market.
Critiques may argue in favour of developing such local digital platforms. But often digital services such as hotel booking or on-line shopping being offered are global in nature. Usually, it takes years to pursue supply driven investment strategy to crate scale, scope and network externalities to reach profitability in digital service space. So, venture capital firms are reluctant to finance start-ups having global potentials due to the likely threat that digital platform owners would venture out similar services with unfair competitive practices. Such antitrust issues are not only limited to global players, but are also found in local network operators. The emergence of local network operators in digital service space such as mHealth or mEducation also raises similar antitrust issues.
Basic issues of digital imperialism are related to net neutrality, which basically stands for unbiased service delivery of underlying network and/or digital platforms. But once network and/or digital platform providers are allowed to provide higher-level services in comparison to other providers, the issue of unfair competition arises. Due to high complexity of regulation, preferred option is to pursue policy to restrain network and/or platform owners from participating in higher-level service delivery. But due to the global nature, often it's beyond the scope of individual countries to pursue such policy to restrain global operators such as Google, Facebook or Amazon. Although antitrust laws offer remedy, but the application of such laws appears to be quite complex and time consuming, particularly for developing countries. In order to raise antitrust issues against global digital monopolies, solid evidences affecting competition in local context should be gathered and substantiated within legal framework. Often such competencies are non-existent in many countries. It's worth noting that the European Union took 10 years to collect defendable evidences to proceed with the fine on Google.
Due to growing economic implications of digital service space, it's time for international organisations such as UNCTAD and WTO having the mandate of fostering competition in global space should play their due role to deal with rising digital imperialism. But the regulators of individual countries should provide adequate evidences to empower those organisations to play their role.
Many of the countries do not have well developed competition laws to deal with such antitrust issues. It's time to develop required capacities of individual countries in partnership with international institutions to continuously monitor antitrust issues in the digital service space, and pursue them within fair legal framework to nurture entrepreneurial opportunities of digital innovations. Regulators should be vigilant and gather evidences to assess the way market power is created, retained and exercised by both global and local digital networks and/or platform providers.
M Rokonuzzaman Ph.D is academic, researcher and activist on technology, innovation and policy. [email protected]
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