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The Promise and Peril of Big Tech in India

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The Promise and Peril of Big Tech in India TANDEM RESEARCH | JULY 2020 A Balancing Act The Promise and Peril of Big Tech in India # Authors Acknowledgements Urvashi Aneja & Angelina Chamuah We would like to thank Omidyar Network India for their support. Akshat Jain and Subhashish With inputs from Bhadra, in particular, provided invaluable support Harsh Ghildiyal & Joanne D’Cunha and guidance. We would also like to thank all our interviewees and workshop attendees for their Design time and insights. A big thanks to the Tandem LMNO Design (www.lmno.in) team, particularly Harsh Ghildiyal and Joanne D’Cunha, as well as Abishek Reddy and Anushree Aneja.U, & Chamuah, A (2020). Gupta. Any errors or omissions are our own. A Balancing Act: The Promise & Peril of Big Tech in India. Tandem Research. Copyright ©Tandem Research 2020 # Abbreviations 04 4 How is Big Tech transforming India? 42 Prologue: Why we 4.1 Market Power wrote this report 05 4.2 Informational Gateway 4.3 Privacy 4.4 Sovereign Interests Executive Summary 06 ••• Is there an Indian Big Tech? 1 Varied and Evolving Contexts 18 5 Policy Pathways for India 58 5.1 Market Power 5.2 Informational Gateway 5.3 Privacy 5.4 Sovereign Interests 2 What is Big Tech? 5.5 A Graded Approach to Regulation 5.6 Conclusion: Principles for Competing Values Four Conceptual Markers 20 2.1 Data-centric Models 2.2 Network Effects 2.3 Infrastructural Role 2.4 Civic Function 6 Epilogue: The Covid-19 2.5 Cyclical Relationship of Conceptual Markers moment for Big Tech 78 3 Who are the key Big Tech Glossary 82 players in India? 32 82 3.1 Big Tech market presence Endnotes TABLE OF CONTENTS 3.2 How Big Tech companies are adapting to India # A Balancing Act: The Promise and Peril of Big Tech in India | Abbreviations | AIOVA GDP All India Online Vendors Association Gross domestic product API GDPR Application Programming Interface General Data Protection Regulation AWS IT Amazon Web Services Information Technology B2B Business to Business OECD Organization for Economic Co-operation and Development B2C Business to Customer R&D Research and Development CAIT Confederation of All India Traders RBI Reserve Bank of India CCI Competition Commission of India SEO Search Engine Optimisation CCPA California Consumer Privacy Act UPI United Payments Interface CEO Chief Executive Officer US United States FDI Foreign Direct Investment ABBREVIATIONS 4 # A Balancing Act: The Promise and Peril of Big Tech in India | Introduction | Why we wrote this report Debates on the power and influence of global technology Big Tech companies are transforming giants such as Google, Facebook, and Amazon, often referred India’s digital economy and society in a to as 'Big Tech', are increasingly polarized. These companies multitude of ways. Not all of these changes are celebrated for their innovative products and services, and are covered in this report and many the new possibilities they create for citizens, businesses and require further exploration. The aim of governments. However, these companies are also criticized for this report is to provide a framework for anti-competitive behavior and for undermining democratic disaggregating the ways in which Big processes. While both arguments hold merit, such polarized Tech companies are transforming India views can foreclose the possibility of a balanced and nuanced and the policies needed to harness the policy debate. promise of Big Tech and minimize its perils. Frameworks risk over-simplifying With this report, we seek to find a middle ground—to take a a complex and messy reality, but are dispassionate view of the impact of Big Tech companies in nonetheless important to make sense of India and identify policy pathways that can align innovation the rapidly evolving landscape of Big Tech trajectories with healthy markets, individual freedoms, and in India. societal wellbeing. We hope this report can contribute to a Finding this middle ground is particularly important for more nuanced discussion on Big Tech developing countries like India. Big Tech companies are a part in India and help inform better policies of India’s development story—filling critical gaps in state, market from both Big Tech companies and and research and development (R&D) capacity. The role Big Tech government. companies play in India’s development story may also imply that the trade-offs for public policy are different from those in industrialized economies. PROLOGUE 5 # A Balancing Act: The Promise and Peril of Big Tech in India | Executive Summary | Executive Summary Almost a decade ago, in the wake of To answer these questions, we spoke to While each company is the Arab Spring, technology and social 40+ thought-leaders in India, including different, they share four media companies were celebrated representatives from civil society, Big across the globe as harbingers of new Tech firms, Indian start-ups, academia, common characteristics: modes of democratic participation and government, regulators, and the individual freedoms. Cut to the present, media. We supplemented this with a and there is growing tech-lash against comprehensive review of 400+ academic Data-centric models The collection, analysis and monetization of data Big Tech companies, with concerns and literary pieces and several structured is central to their business models. ranging from market monopolization to discussions on the topic. This work is a interference in democratic processes. culmination of eight months of enquiry. Network effects They have achieved immense scale quickly through network effects. This insulates them from This report unpacks Big Tech in the Commentators have used the label of Big competition, contributes to their size and often Indian context. What exactly is Big Tech to refer to a handful of large, globally results in market dominance. Tech? Who are the key players? What is significant technology companies, such Together, these four conceptual markers their role in India? What are the policy as Google, Facebook, Amazon, Apple, Infrastructural role They provide essential market and informational characterize Big Tech as data-driven, priorities for India? TenCent, AliBaba and Baidu; as well as infrastructure for a digital economy and society. large-scale, consumer-facing technology IBM and Microsoft in some cases.1 This also creates value and dependencies for other players in the market. platforms that provide market and informational infrastructures for a Civic Function digital society, and perform critical civic Through their consumer facing products that functions. The combination of these enable essential services like news, commerce and societal interactions, they increasingly features allows Big Tech firms to exert perform civic functions. both market and civic power. 6 A Balancing Act: The Promise and Peril of Big Tech in India | Executive Summary | Big Tech companies Big Tech, in other Many of the global technology giants influence our markets and associated with this term—such as Google, society in four key areas: Amazon and Facebook have a widespread words, is a concept Market Power presence in India. Reliance Jio also Market operations of global Big Tech companies displays some of the conceptual markers 1 in India create benefits for consumers and rather than a fixed set associated with Big Tech. Thinking of Big businesses. Many start-ups and tech companies Tech as a concept, rather than a static rely on Big Tech companies for digital infrastructure, research, and innovation. However, of companies. set of companies, also draws attention to Big Tech companies are prone to monopolistic the role of the Indian state, since it seeks and anti-competitive behaviour. to leverage data analytics and digital platforms for governance. Informational Gateway 2 Social media platforms and search engine operations of Big Tech companies increasingly serve as the primary source of information, news and means of communication for many users in India. Yet, this also gives Big Tech companies inordinate influence in shaping how people access information and communicate with one another, making them arbiters of free speech. Big Tech platforms also contribute to the spread of misinformation and hate speech, while becoming increasingly politicized. Privacy 3 Big Tech platforms allow for data-based personalization of the internet experience and access to new services. Such benefits however, come at a significant cost to individual and group privacy. Such personalisation also influences individual and group capacities for self- determination. Sovereign Interests 4 While the Indian State benefits from Big Tech companies’ infrastructure and innovation to fill gaps in its own capacity and reach, this also raises concerns around democratic accountability, data sovereignty, the impact on domestic businesses and the distribution of technology gains. 7 A Balancing Act: The Promise and Peril of Big Tech in India | Executive Summary | Multiple policy pathways are needed to align Big Tech trajectories with healthy markets, individual freedoms, and societal wellbeing. Market Informational Sovereign Power Gateway Privacy Interests While not unique to India, these factors manifest themselves differently in the Updated Publisher ethics Individual and State and country. Big Tech companies provide competition for social media collective rights market capacity critical digital infrastructure that policy to include companies to act for citizens to take by investing in data and network more responsibly for decisions about education, research, enables new forms of democratic and effects when content posted on how their data entrepreneurship economic participation for people and assessing market their platforms, while is collected and and other kinds businesses alike. This infrastructure competitiveness avoiding excessive processed by large of social capital partially compensates for pre-existing and mergers and censorship. tech companies. that can help acquisitions. India manage the gaps in State, market and R&D capacity Algorithmic audit to Data stewardship downside of Big in India. At the same time, potential Platform neutrality enable independent to create new Tech. harms are amplified precisely because to ensure that a Big agencies and civil technologies for of these existing capacity gaps.
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