A Balancing Act The Promise and Peril of Big Tech in India - TANDEMRESEARCH | JULY2020 - Tandem Research
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TA N D E M R E S E A R C H | J U LY 2 0 2 0 A Balancing Act The Promise and Peril of Big Tech in India
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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
TABLE OF CONTENTS
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
2 What is Big Tech? 5.4
5.5
Sovereign Interests
A Graded Approach to Regulation
Four Conceptual Markers 20
5.6 Conclusion: Principles for Competing Values
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
3.1 Big Tech market presence
Endnotes 82
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
ABBREVIATIONS
Amazon Web Services Information Technology
B2B OECD
Business to Business
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
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
PROLOGUE
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.
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
across the globe as harbingers of new
representatives from civil society, Big
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
their role in India? What are the policy as Google, Facebook, Amazon, Apple, Infrastructural role Together, these four conceptual markers
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
society in four key areas:
words, is a concept
1
associated with this term—such as Google,
Amazon and Facebook have a widespread
Market Power
presence in India. Reliance Jio also
rather than a fixed set
Market operations of global Big Tech companies
displays some of the conceptual markers in India create benefits for consumers and
associated with Big Tech. Thinking of Big businesses. Many start-ups and tech companies
of companies. Tech as a concept, rather than a static rely on Big Tech companies for digital
infrastructure, research, and innovation. However,
set of companies, also draws attention to Big Tech companies are prone to monopolistic
2
the role of the Indian state, since it seeks and anti-competitive behaviour.
to leverage data analytics and digital
platforms for governance. Informational Gateway
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.
3 Privacy
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-
4
determination.
Sovereign Interests
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
policy to include companies to act for citizens to take by investing in
critical digital infrastructure that
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
and mergers and censorship. tech companies. that can help
partially compensates for pre-existing
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
Tech firm that has society to evaluate individuals to safely Equitable taxation
of these existing capacity gaps. Many
created a platform algorithms used by share their data to ensure that of the capacities and systems that could
infrastructure Big Tech companies. with businesses, developing countries help manage, or soften, the harmful
competes fairly with with adequate can gain fair and effects of some Big Tech practices are
third-parties making Media literacy to governance and reasonable tax
use of the platform. enable citizens to oversight. revenue from Big
still under development.
take more conscious Tech firms rather
Platform decisions based on Privacy-respecting than lose it to tax Big Tech, as a concept, poses a wicked
interoperability information they business models havens. problem for public policy in India,
to enable users on receive on social that reduce tech
social media, gig media. firms’ commercial Better cross-border
involving complex trade-offs between
economy or similar dependence on data flows to ensure competing priorities, interests, and
platforms to interact processing of that transfer of data values. Therefore, we need to pursue
with their friends and personal data. outside India does multiple policy pathways to maximize
network on other not impede law
platforms. enforcement and
the benefits and minimize the harms of
other needs. Big Tech companies.
8
A Balancing Act: The Promise and Peril of Big Tech in India | Executive Summary |
Finding the right balance
is ultimately a question of
competing public values. It
is not a question of right or
wrong, nor one that can be
fully resolved with more or
better evidence. We propose the
following sets of
principles:
People-first
Innovation should prioritize individuals’ agency,
material well-being, autonomy, and democracy.
However, these pathways involve different Policy pathways like data stewardship Regulation for innovation
levels of complexity and subjectivity. or platform interoperability will need Regulation will be required to ensure that
Some changes could be driven by a policy experimentation and a longer term, innovation is aligned with societal goals.
single entity, acting in coordination with iterative approach.
others. For example, the Competition Accountability and transparency
A vibrant public discussion on the role of
Commission of India (CCI) is already Finding the right balance is ultimately a technology will help navigate the uncertainty that
considering ways to update competition question of competing public values. It is may result from technological innovation.
policy for the digital economy.2 Other not a question of right or wrong, nor one
pathways may require concerted action that can be fully resolved with more or Protect by default
Technology should protect its users by default
by many public and private stakeholders. better evidence. A normative framework to ensure the well-being of each individual,
For example, regulating speech on social of values to guide India’s digital economy especially vulnerable groups.
media platforms is a subjective issue that and society, as well as to help navigate
will have far-reaching societal impacts between competing interests, can help Build collective resilience
Society and communities need to be
on free speech. Some, like taxation, may provide an outline for action and policy. strengthened to collectively maximize the
even require international coordination. benefits and minimize the harms of technology.
9
A Balancing Act: The Promise and Peril of Big Tech in India | Executive Summary |
What is Big Tech? Data-Centric
Models
+ Network
Effects
+ Infrastructural
Role
+ Civic
Functions
Why should we care?
Informational Sovereign
Market Power Gateway Privacy Interests
What can we do?
Digital Access to Personalisation of Digital
infrustructure for information services infrastructure for
other businesses public functions
Means to Wider range of
R&D and innovation communicate and services Data for social
The Promise
mobilise good
Funding or
acquiring start-ups Inclusion through Connect state to
access and citizens
Representing tech language
in policy disclosure Informational Sovereign
Market Power Gateway Privacy Interests
Anti-competitive Algorithmic Extensive, granular Limited access
behaviour influence over data collection to data for global
people’s choices south Updated Publisher Ethics Individual and State and Market
‘Kill Zone’ for Loss of individual Competition Policy Collective Rights Capacity
competitors Ability to moderate agency Impediments to Algorithmic Audit
content law enforcement Platform Neutrality Data Stewardship Equitable Taxation
Over-representation Honey pot for bad Media Literacy
The Peril
in policy discourse Misinformation actors Tax avoidance Platform Privacy Respecting Better Cross-
Interoperability Business Model Border Data Flows
Politicisation and
identity politics
101 A Balancing Act: The Promise and Peril of Big Tech in India | Varied & Evolving Context |
Varied &
Almost a decade ago, during the Arab Spring, social media In India, the conversation has been
platforms were celebrated for enabling new forms of democratic somewhat different. Here, technological
participation. One protester even named their newborn child advancement is deeply tied with ideas of
Facebook.3 Technology companies such as Google and Apple nationhood and national advancement.11
Evolving
were seen to represent a new era of individual freedom and As University of Oregon professor
expression, challenging established institutions of state and Biswarup Sen argues, the Indian state,
corporate power. after independence, has embraced a
philosophy that ‘placed technology
Context
Cut to the present, there is a growing backlash against Big Tech and scientific research at the forefront
companies. Many commentators have expressed concerns of the nation building project.'12 The
ranging from market monopolization to interference in relationship between the Indian state
democratic processes.4 In the United States5 and Europe,6 and big businesses has also been one
politicians have called for the break up of Big Tech, searching of closeness.13 State support, including
for ways to regulate their power and influence. Donald Trump, protectionist trade politics, has enabled
President of the United States (US) issued an executive order the emergence and sustenance of large
in May 2020, directing a US regulatory body to revisit the businesses.14
protection that social media companies have from lawsuits
against user content on their platforms.7 This shift demonstrates The tech narrative in India is also shaped
the evolving narrative around Big Tech. by socio-cultural factors: a large and
growing youth population,15 a rapid
Technology and society trajectories will differ across contexts, increase in the number of internet users,16
intersecting with local political, economic and cultural systems. many of whom continue to lack access to
The narrative around Big Tech and its impact are similarly other essential services, all in the context
CHAPTER
likely to vary across geographies, with opportunities and harms of a young democracy with varying levels
manifesting in different ways. of institutional capacities and readiness.
India is also a growing and vibrant hub for
In the West, the birth of a number of tech companies in Silicon entrepreneurship and innovation, with an
Valley was born out of the anti-establishment ideals of the active and engaged civil society.
sixties counterculture in the US.8 The personal computer, as
the Pulitzer Prize winning journalist, John Markoff has argued, These economic, social, demographic,
was underpinned by a revolution for individual rights and political and technological forces
expression.9 Thus, the recent negative discourse around Big intersect and lead to a complex narrative
Tech in the West has focused on the threat of large technology about large tech companies and Indian
companies on individual rights and civil liberties.10 society. It is a unique story worth
further investigation.
112 A Balancing Act: The Promise and Peril of Big Tech in India | What is Big Tech? Four Conceptual Markers |
The term ‘Big Tech’ is often used to
What Is Big Tech? Four
refer to a handful of large technology
companies, clubbed together as the Big
Four—Google, Amazon, Facebook, and
Conceptual Markers
Apple.17 Sometimes, this terminology
includes companies like Microsoft,
IBM, Baidu, Tencent, and Alibaba.18
The ‘bigness’ of these large technology
companies is reflected in their market
valuations, user base, and range of
product offerings.
Infographic (i) & (ii)
Their revenues are higher than the GDP
of some countries.19 However, the term
‘Big Tech’ has come to indicate more than
just scale and financial strength. It also
draws attention to their growing political,
social, and cultural influence–aspects that
are often not shared by other kinds of ‘big’
businesses.
CHAPTER
To help bring structure to this important
discussion, we identify four conceptual
markers that are shared by Big Tech
companies. Big Tech is not a static
category—new companies may enter this
category just as existing ones may drop
out of it. Equally, the salience of these
conceptual markers, how they combine
and their impact on markets and societies
may vary across time and place. Big Tech,
in other words, is a concept rather than a
fixed set of companies.
12A Balancing Act: The Promise and Peril of Big Tech in India | What is Big Tech? Four Conceptual Markers |
i Basic
World’s top 20 companies by market
capitalization, by sector, 2009 versus 2018
(per cent)
Materials
Telecommunications
World Top 10%
4%
8%
Consumer Goods
Companies
by Market Technology &
Consumer Services
Capitalization
16% 8% Healthcare
2018
In 2009, only three technology
companies featured in the top twenty
global firms; most of the biggest firms
were from the oil, gas and mining
sectors. By 2018, 8 technology and
consumer service companies featured in
the top 20 firms; only 2 from the oil and
gas sectors remained.
Financial Services 18% Consumer Goods
6% Healthcare
4%
Oil & Gas
7%
Oil &
36 % Gas
Source: UNCTAD, based on PwC, 2018b.
2009
Financial
27% Services
Technology &
Consumer Services 56%
13A Balancing Act: The Promise and Peril of Big Tech in India | What is Big Tech? Four Conceptual Markers |
ii
Global Internet World’s online Global cloud
A few Big Tech search market retail activity infrastrucure services
companies
dominate many
important
markets
90% > 1/3 > 1/3
Google Amazon Amazon
Web Services
US and China giants
share in the global digital
services market
Global social Mobile payment Global
media market solution active users
66% 100% of > 1 billion
Chinese markets
Facebook We Chat and AliPay WeChat users
Source: Digital Economy Report, 2019, UNCTAD
14A Balancing Act: The Promise and Peril of Big Tech in India | What is Big Tech? Four Conceptual Markers |
Big Tech companies
collect and process a large
proportion of the world’s data.
2.1 2.2
Data-centric Models Network Effects
The collection, analysis, and monetization of with the aim of better personalization.23 Similarly, While most technology companies today employ through vertical and horizontal integration.
data is now central to value creation in the digital while Microsoft’s Bing and LinkedIn sell ads, the a data-centric business model, not all can They can leverage their existing user base
economy.20 Big Tech companies collect and company as a whole is not as dependent on be called Big Tech. Big Tech companies gain and accumulated data intelligence to enter
process a large proportion of the world’s data.21 utilization of personal data. immense scale and resilience because they new markets. For example, Google bundles its
The nature of data collection has evolved over are structured as multi-sided platforms that applications and search engine onto Android
time as the digital touchpoints between users and Pulitzer Prize finalist Julia Angwin traces the demonstrate strong network effects.26 phones as default; Facebook is trying to launch
Big Tech companies have expanded from only evolution of this data-centric business model to its own finance system with the creation of a
computers and mobile devices, to include digital the early 2000s. She suggests that the bursting The more users there are on the platform, the cryptocurrency, Libra;30 and Amazon seeks to
assistants like Amazon’s Alexa, Google’s Home of the dot-com bubble led many Silicon Valley more valuable the platform becomes to other disrupt the health care sector by entering the
Mini, and Apple’s Siri.22 This data collection also companies to search for new business models, users. More users means more data, which online medical supplies market.31 Operating
extends to non-commercial interactions such as leading to the birth of a new strategy based on implies a stronger ability to outcompete rivals in many distinct sectors also allows cross-
search engine queries, social media likes and targeted advertising.24 through better product design and more efficient subsidization—the economic losses from a
even items left un-bought in a user’s cart. operations.27 Many Big Tech companies offer free product that has low revenues but many users
Harvard professor Shoshana Zuboff traces the or discounted products and services to kick-start can be balanced with other arms of the business
Big Tech companies leverage the collected origins of this data-based business model to this cycle and accumulate initial users.28 Once that are more commercially viable.32
data in several ways—from targeted advertising Google. She states that ‘Google realized that all a platform begins to gain traction, users face a
(e.g. Google and Facebook) and optimizing the ‘behavioural surplus’ data it was generating, high cost of switching to another service provider. Finally, digital monopolies, unlike traditional
e-commerce operations (e.g. Amazon and could actually be used as ‘prediction products’, Such network effects give companies a ‘first- monopolies, have the kind of network effects
Alibaba) to diversifying their portfolio of products that could nudge consumers towards certain scaler advantage’, allowing them to eventually that seemingly enables consumer choice.
and services. Apple stands in slight contrast preferences and habits in a new ‘behavioral dominate markets.29 Google Search, for example, presents
since its core business model does not depend futures market.'25 She hypothesizes that once consumers with a range of product and service
on leveraging personal data. However, many of Google demonstrated the commercial value of Market dominance in one sector also enables choices, while simultaneously funnelling users
the applications it owns collect individual data data, others like Facebook followed suit. Big Tech companies to influence other sectors through its own platform.33
15A Balancing Act: The Promise and Peril of Big Tech in India | What is Big Tech? Four Conceptual Markers |
Like railroads or
other utilities, Big
Tech companies
provide many essential 2.3
services for individuals,
Infrastructural Role
2.4 Civic Function
businesses, and even Big Tech companies provide critical market and
Big Tech companies have assumed a civic role in
society through their consumer-facing platforms.
Consumers are dependent on these platforms
governments. societal infrastructure. Their products and services
have attained such levels of use that they appear
to be closer to traditional infrastructure providers in
for essential services like news, commerce, and
social interactions.39 This helps Big Tech firms
dominate, what Tristan Harris from the Center for
scale, ubiquity, and necessity to everyday life.34 Human Technology calls, the ‘attention economy’.
Through their data intelligence, they can shape
Like railroads or other utilities, Big Tech companies preferences and behaviour—to know and
provide many essential services for individuals, influence how people think and interact.40 This
businesses, and even governments.35 For gives them civic power in society.
example, Big Tech companies provide core market
infrastructure such as cloud services, software Martin Moore, director of the Centre for the Study
development kits and other business development of Media, Communication, and Power at King’s
tools. A wide ecosystem of businesses and third- College, associates six types of civic power
party developers benefit from these tools. Similarly, with Big Tech: the power to command attention;
companies like Google and Facebook are part the power to communicate news; the power
of our everyday informational infrastructure. to enable collective action; the power to give
According to Brooklyn Law School Professor, K. people a voice; the power to influence people’s
Sabeel Rahman, they facilitate the ‘distribution of vote; and the power to hold power to account.41
and access to news, ideas and information upon This ability to shape world views and beliefs also
which our economy, culture and politics depend.36 distinguishes Big Tech from other forms of Big
Business, such as Big Pharma or Big Tobacco.
To a significant extent, Big Tech companies have
acquired this coveted position through strategic Despite their financial ‘bigness’, Microsoft or IBM
mergers and acquisitions. For example, Google are often not associated with Big Tech because
added as many as one new company to its portfolio civic power is an important conceptual marker of
every ten days in the early 2010s.37 Facebook has Big Tech. These firms are primarily B2B and have
acquired 92 companies since 2007, most notably not assumed some of the civic roles of companies
Instagram and WhatsApp.38 like Google or Facebook.
16A Balancing Act: The Promise and Peril of Big Tech in India | What is Big Tech? Four Conceptual Markers |
Large amounts of data
collected by Big Tech 2.5
make their services more
customized and responsive. Cyclical Relationship
of Conceptual
This increases the Markers
platform’s attractiveness Together, these four conceptual markers
characterize Big Tech as data-driven, large-
scale, consumer-facing technology platforms
for users and enhances that provide essential market and information
infrastructure for a digital society, and perform
essential civic functions. The combination of
network effects. Higher these features allows them to exert civic power
alongside market power.
user engagement and Each of these four conceptual markers is an
integral interconnected part of a single moving
system, influencing each other in a cyclical
dependence, in turn, leads movement. For example, the large amounts
of data collected by Big Tech make their
services more customized and responsive. This
to an increasing civic role increases the platform’s attractiveness for users
and enhances network effects. Higher user
engagement and dependence, in turn, leads to
for these platforms. an increasing civic role for these platforms.
This relationship also works in the opposite
direction. The civic power they gain through
user attention and public participation, when
combined with existing market power, further
enhances data collection and aggregation. It
also increases the platform’s efficiency and
public utility.
Infographic ( iii )
17A Balancing Act: The Promise and Peril of Big Tech in India | What is Big Tech? Four Conceptual Markers |
iii
Cyclical
relationship
between
conceptual
markers
These markers exist in a cyclical data-centric models network effects infrastructural role civic function
relationship, building and reinforcing
one another.
This diagram draws on examples from
Big Tech companies to illustrate each
of the markers.
Facebook processes 2.5 By intergrating maps Many online sellers gather Whatsapp has become
billion places of content directly into the SEO, on Amazon to sell their a critical medium for
and 500+ terabytes of Google benefits from products rather than civic society to organise
data each day. Facebook network effects. Indirect selling them directly. and develop collective
has multiiple touch points network effects are also Similarly, content creators campaigns, reaching a
for data collection across accrued through other rely on Youtube to wide and new user base.
social media interactions businesses integrating monetize videos. AWS
and other businesses using Google Maps into their also dominates the cloud
the platform. websites and platforms. market.
183 A Balancing Act: The Promise and Peril of Big Tech in India | Who are the key Big Tech players in India |
Who are the
key Big Tech
players in India? Three of the global Big Tech companies
have a widespread presence in India—
Chinese counterparts such as TenCent,
Alibaba and Baidu have also invested
Google, Facebook, and Amazon. Google in India, funding some of the biggest
products and services are ubiquitous unicorn start-ups such as Paytm and
in India. Google Android is a market Ola Cabs. ByteDance-owned TikTok
leader in the mobile operating system has amassed a huge user base averaging
market, with 94.45% market share;42 200 million monthly average users
Google Pay has also clocked more than in India and can be said to exert ‘civic
300 million transactions in India as of power’ through its ‘power to command
June 2019.43 India constitutes Facebook’s attention.'48 At its peak, in 2016, Alibaba-
largest market, with more than 270 owned UC browser had a 60% market
million total users and 400 million share in India and was used by more than
monthly average users for Whatsapp. 300 million people.49 It was the most
Amazon also has a large presence, popular mobile browser in India, but has
with at least 30% market share44 in now been surpassed by Google, leaving
e-commerce and more than 5.5 lakh UC with only 24% of the market share
CHAPTER
sellers on its platform.45 While Apple is as of 2019.50 The UC Browser example
considered to be a Big Tech company shows that firms belonging to this
globally, it has a significantly smaller category can change, especially as new
market presence in India, with less than competitors emerge in the market. This
a 3% share in the smart-phone market.46 section outlines the market influence,
Other foreign companies that display strategies and investments of Big Tech
some of the conceptual markers of Big companies in India.
Tech also have a significant presence
in India. For example, Walmart is a
leader in the e-commerce space, with
reportedly 60% market share through
its subsidiary Flipkart.47
19A Balancing Act: The Promise and Peril of Big Tech in India | Who are the key Big Tech players in India |
iv
Big Tech Market
Presence in India
Big Tech is a concept rather than a static
set of companies. Google, Facebook, Digital Logistical
Payments Services
Amazon, Walmart-backed Flipkart, and
TikTok demonstrate conceptual markers
associated with Big Tech.
Cloud
Computing Audiobooks
& Storage &
Publishing
Amazon
Revenue in INR
328.29 bn
FY 2018 -2019
Retail IoT &
Goods Total Prime subscribers Hardware
10 Mn (As of 2019)
E-commerce Streaming
Services
Revenue Source: Ministry of Corporate Affairs Filings
20A Balancing Act: The Promise and Peril of Big Tech in India | Who are the key Big Tech players in India |
Search Engine Developer
and Database Tools
27.4
Operating
System Advertisements
Google 8%
37%
Revenue in INR
43.47 bn
Digital Payments
Cloud and
Mobile And Web
Applications Data Services for India
Paytm
72.6 PhonePay
GPay
Others
24% 31%
Hardware Others
Revenue Source: Ministry of
Corporate Affairs Filings. As per
the National Industrial Codes, ‘IT Source: Ramanathan, A. (2019,
services’ includes all information September 16). In India’s digital
processing services done by payments, Google Pay has a Midas
Google, and other IT-enabled touch. Retrieved from https://
services. ‘Data processing’ refers the-ken.com/story/indias-digital-
to all the revenue generated by payments-googles-achilles-heel-
Google from advertising. turns-midas-touch/
21A Balancing Act: The Promise and Peril of Big Tech in India | Who are the key Big Tech players in India |
Total Monthly Average
Users combined
350 million
(As of 2019)
800+ Indian Businesses
21 languages
Facebook Social
offered Media and
products Messaging
Facebook
Revenue in INR
8.92 bn
FY 2018 -2019
Business Support
Services
Facebook Digital Ads
Others APK/SDK
for Business
Spark AR
Studio Facebook
Shops
Revenue Source: Ministry of Corporate
Affairs filings. Here, business support
services encompass support activities
provided to businesses.
22A Balancing Act: The Promise and Peril of Big Tech in India | Who are the key Big Tech players in India |
50 Million monthly
average users
(As of 2019)
60% marketshare
120 Million
monthly
average users
(As of 2019)
5% Video
13.6%
E-commerce
Social Music Streaming
Media and Streaming
Messaging
(Walmart)
ByteDance Flipkart
Revenue in INR
Revenue in INR
437 Million
357.35 Billion
FY 2018 - 2019
FY 2018 - 2019
95% 86.56%
Digital Retail
Payments Goods
Video Citron
Smartbuy
380 Million Transactions
(May 2019)
Revenue Source: Ministry of Corporate
Affairs Filings. As per the National Product Source: Ministry of Corporate Affairs filings.
Classification for Services Sector, Support 20 Million monthly Here, seller services encompass the sale
services (IT services in the infographic) average users of traded goods on the platform. Other
includes all support services provided by (As of 2019) services include marketplace services,
ByteDance. Advertising corresponds to the logistics services, advertising services, and
sale of internet advertising space. payment gateway services
23A Balancing Act: The Promise and Peril of Big Tech in India | Who are the key Big Tech players in India |
3.2
How Big Tech companies are
adapting to India
A large and vibrant digital economy is opening up in India due to the
i ii
proliferation of mobile phones, spread of internet services, a rising youth
population and growing adoption of digital services.51 Currently, there are
over 500 million internet users in India, making India the second largest
internet user base in the world.52 Projections indicate that by 2023 India
will have more than 900 million internet users, with most of them accessing
the internet through vernacular languages and video content.53 By 2017, Provision of digital infrastructure Entry into Fintech
the number of Indian-language internet users (234 million) had already
surpassed that of English users (175 million).54 Concurrently, the economies In 2016, Google launched the Google Station Fintech in India has boomed after demonetization
of mid-sized towns and cities are growing and the spread of e-commerce project (now defunct) in India to provide free and the launch of UPI. Big Tech companies have
is driving digital initiatives aimed at ‘building for Bharat’ i.e. the mobile-first, high-speed public Wi-Fi to more than 400 train adapted their business models to ride this wave.
non-English speaking, non-urban internet users in India. stations in India. At its peak, in June 2018, more Digital payments are an attractive revenue model
than eight million people used the service for Big Tech companies, especially because per
As the number of internet users in India continue to grow, India is rapidly every month.60 Google also announced plans user ad revenue in India is still quite low.63 Since
emerging as a significant market for Big Tech companies. For instance, to launch a second cloud region in India, to the launch of UPI, Google Pay has acquired
Facebook has 328 million monthly active users (MAU)55 and a user base of strengthen cloud services in India for businesses, nearly 70 million users and carried out more
270 million users in India—the highest in the world.56 WhatsApp has more hospitals and public sector organizations, than 2.5 billion transactions,64 closely followed
than more than 400 million MAU57 in India—also the highest in the world.58 amongst others.61 Similarly, many businesses by Walmart-owned PhonePe. Whatsapp Pay has
Indians account for the highest activity on the Android operating system’s and government services rely on Amazon’s been allowed a phased roll-out in India, provided
official app store, with up to 1 billion app downloads every month.59 cloud infrastructure.62 By providing such Facebook maintains compliance with RBI’s data
digital infrastructure, Big Tech companies align localization norms.65 Aside from Amazon Pay,
Big Tech companies have adopted specific strategies for India to themselves with the nation-building narrative Amazon has also launched an instant zero-
benefit from this digital demographic shift and the concomitant around technology in India. interest credit service in India, called Amazon
socio-economic transition. Pay Later.66
24A Balancing Act: The Promise and Peril of Big Tech in India | Who are the key Big Tech players in India |
iii iv v vi
Emphasis on voice and vernacular Offline and Online Filling infrastructural gaps through Investment in R&D and tech
services auxiliary business expansion entrepreneurship
Many Big Tech companies are leveraging
Several Big Tech companies in India provide offline models of service delivery to effectively Big Tech companies have added India-specific Big Tech companies seek to leverage and
services over voice-based interfaces and in reach users in smaller towns and cities in business verticals to bridge pre-existing develop India’s large demographic pool for both
regional languages to address literacy-related India. For example, Amazon has enlisted small infrastructural gaps and serve the Indian market global and India-focused R&D. In 2019, Facebook
barriers to digital services. For example, stores as package depots along its distribution better. For example, Amazon is developing supply re-hauled the structure of its operations in India75
Google’s AdSense is available in Marathi, Hindi, network.70 It is enlisting other small retailers as chain management and storage capacities,72 and decided to focus on bridging the gendered
Bengali, Tamil and Telugu.67 In 2017, Google Amazon learning centres, so that new shoppers as well as setting up a sorting, grading and digital divide, encouraging social interventions
partnered with Reliance Jio to reuse its voice can walk into these stores and shop online in packing centre for fruits and vegetables. This to boost economic growth in India.76 It has done
assistance technology to operate on feature an offline setting.71 will enable Amazon collection centres to source so by investing in startups like Meesho, aimed
phones.68 The user base of Google’s voice fruits and vegetables directly from farmers and at nurturing female entrepreneurship.77 Similarly,
search has grown exponentially, with most local markets.73 Flipkart is also building its own Google recently established the Google AI
users searching in Hindi.69 delivery network of freelancers to deliver to Lab, a global research lab that aims to provide
rural areas and has asked the government for opportunities to local Indian talent. The lab will
permission to carry out drone deliveries.74 also explore opportunities to leverage Artificial
Intelligence (AI) for social good.78
254 A Balancing Act: The Promise and Peril of Big Tech in India | How Big Tech is transforming India |
How is Big Tech
Transforming India?
Big Tech companies in India have brought particular type of complex social problem,
benefits to citizens, businesses, and the whose boundaries are hard to define, and
government alike. These benefits are which involves complex and interwoven
CHAPTER
amplified because Big Tech companies trade-offs. Addressing one part of the
fill critical gaps in state, market, and wicked problem often creates new issues
R&D capacity. Yet, certain features and to grapple with.79 Further, there is no
practices of Big Tech companies result in single solution to the problem; solutions
harms and risks, whose impact in India are neither true or false, nor right or
is also amplified because of the above- wrong. Instead, they involve complex
mentioned gaps. value trade-offs. Solutions to wicked
problems depend on how the problem is
Because Big Tech companies in India defined, which is typically a reflection of
provide both benefits and harms, they the world views of different stakeholders,
pose a wicked problem for public policy. often grounded in moral positions.
The term ‘wicked problem’ refers to a
26A Balancing Act: The Promise and Peril of Big Tech in India | How Big Tech is transforming India |
Problems
Can take a are never
completely No clear
long time
solved problem
to evaluate
definition
solutions
Solutions are Multi-casual,
not right or multi-scalar
wrong but & inter-
better or worse connected
Wicked
Problems
Every Multiple
solution stakeholders
ramifies with
throughout conflicting
the system agendas
Every wicked Straddle
problem is organizational
connected to & disciplinary
others boundaries
Source: Wahl, D. C. (2017, April 24). Facing Complexity:
Wicked Design Problems. 27A Balancing Act: The Promise and Peril of Big Tech in India | How Big Tech is transforming India |
4.1
Market Power
Big Tech companies have significant market For example, many start-ups in India benefit
power because of their scale, financial resources, from the deep learning tools and software
and interconnectedness with the rest of the development capacities developed by Big Tech
ecosystem. They often leverage this market players.84
power in a way that brings benefits to the market
as a whole. Big Tech companies have created Big Tech companies’ investments in public
many layers of digital infrastructure for other policy help voice issues and concerns faced
businesses and have fuelled new business by other tech-based businesses. However, this
models and innovation. For example, our representation at times can be skewed toward
interviews with technology policy experts and interests of Big Tech or foreign companies.
start-ups suggest that many Indian start-ups rely Insights from interviews conducted suggest that
heavily on products and services such as search Big Tech companies also have cultural power
engine optimization and advertising platforms
provided by foreign technology companies,
including Big Tech.80 Similarly, many start-ups rely
within the start-up community, as an aspirational
model for new businesses or even as a source of
potential exit.85
Several stakeholders,
on backend infrastructural support like AWS and
Microsoft Azure for their software products and
services.81
While Big Tech companies clearly create market
value as infrastructure providers, investors, and
including regulatory and
Many global Big Tech companies fund research
and provide business support to start-ups.
market representatives, the exercise of market
power creates an uneasy tradeoff between
market dominance and market support. In
industry bodies, have
WhatsApp, for example, has partnered with
Invest India for the Startup India-WhatsApp Grand
Challenge to address local problems.82 Both
particular, the actions of Big Tech companies in
India lead to three sets of concerns. raised concerns around
Google and Facebook run accelerator programs
for start-ups in India.83 Apart from generating
employment opportunities, such initiatives also
First, several stakeholders, including regulatory
and industry bodies, have raised concerns
around anti-competitive behaviour of global Big
anti-competitive behaviour
help Big Tech firms recruit talent locally and build
collaborative relationships within the industry.
Tech companies. For example, the CCI, in early
2019 ordered a full probe into the alleged anti-
competitive actions of Google in India, particularly
of global Big Tech
Big Tech companies’ R&D initiatives are often an
important source of technological breakthroughs.
in relation to its dominant market position in the
Android market.86 In the e-commerce sector, both companies.
28A Balancing Act: The Promise and Peril of Big Tech in India | How Big Tech is transforming India |
The activities of Big Tech the All India Online Vendors Association (AIOVA)
and Confederation of All India Traders (CAIT)
have filed cases against Flipkart and Amazon,
of its Indian subsidiaries.96 The ability of Big Tech
companies to create auxiliary industries in order
to support their operations also creates steep
companies, rather than accusing them of abusing their dominant
market position, favoring ‘preferred sellers’ on
the platform, and hurting small sellers through
competition for brick and mortar stores who are
unable to scale up.97
those of smaller players, discriminatory pricing techniques.87 Further,
sellers add that Amazon is able to leverage
access to vast amounts of purchase data to
Second, Big Tech companies affect competition
by acquiring direct competitors and nascent
companies. Columbia Law School Professor
often attract the attention introduce private labels or made-for-Amazon
only brands.88 Dana Mattioli, in the Wall Street
Journal reported that Amazon’s search algorithm
Tim Wu highlights how Big Tech companies
sometimes use mergers and acquisitions
to reduce competition, add talent through
of regulators. returns favored products and private labels, at
the expense of those listed by other vendors.89
acqui-hires, and expand into new sectors and
industries.98 This trend can now be observed in
India as well. For example, Google has absorbed
Smaller domestic firms struggle to compete promising ventures in the Artificial Intelligence-
head-to-head with Big Tech companies. The Machine Learning (AI-ML) space in India.99
latter’s size allows for greater risk-taking Facebook’s activities are also geared towards
capacity and manufacturing the same products making it a ‘trusted source of information’
at much higher margins.90 They also have through strategic partnerships with news and
control over inventory (in case of e-commerce content delivery services, especially in vernacular
platforms) and have the financial resources languages.100
to offer deep discounts or zero prices for a
sustained period.91 Since they are platforms, Big Such consolidation or vertical integration (through
Tech companies benefit from the commissions mergers and acquisitions) by Big Tech companies
as well as the data from smaller competitors on in the B2C segment has been identified as
their platforms.92 an important factor, amongst others, that has
prompted many Indian start-ups to shift to B2B
Some of the home-grown start-ups we spoke to models.101 Other factors such as low profitability,
also suggest that they struggle to compete with lack of patient capital, hefty executive salaries,
Big Tech companies because of the latter’s large and issues with business models also have a role
capital investments, data-based intelligence to play in this shift.102
and ability to set up and invest in auxiliary
industries.93 For instance, one of the key pillars Third, the activities of Big Tech companies, rather
of Amazon’s competitive advantage in India is than those of smaller players, often attract the
its network of large warehouses and ability to attention of regulators. Resulting policy directives
invest in auxiliary industries. Amazon India has are thus also based on practices of Big Tech
more than 41 warehouses, with the largest being companies, often not taking into account the
more than half a million sq. ft in size.94 Further, needs of smaller players.103 While Big Tech
data intelligence from its large user base allows companies may have the ability to comply with
Amazon to also stock warehouses according to heavy regulations and policies, many smaller
area-wise customer demands, thereby enabling players may not have the organizational or
them to compete with even neighbourhood financial resources to comply fully.104
stores in terms of speedy delivery.95 In 2019
alone, Amazon infused $631 million into several
29A Balancing Act: The Promise and Peril of Big Tech in India | How Big Tech is transforming India |
4.2 Informational
Gateway
Big Tech companies provide the informational ‘on how to better research, report, distribute,
infrastructure for India’s digital society. Most and optimize stories for the internet’.108 Google
Indian internet users rely on one or more Big Tech Trends helps journalists by providing real-time
platforms to access information, communicate updates on trending topics, arranged by region,
and participate in political and social life. A recent country, and trending terms.109 Media outlets
study conducted by the Reuters Institute and heavily use social media platforms such as
University of Oxford shows that people in India Facebook and WhatsApp to distribute news and
increasingly rely on digital platforms—search information.110
(32%) or social media (24%)—as their main way
of accessing news online. Only 18% access news In the expanding digital landscape of India,
directly from traditional media companies or news access to information is empowering individuals
channels.105 through new forms of communication, solidarity,
and agency. However, Big Tech platforms also
Big Tech platforms are thus enabling new contribute to a range of societal challenges and
forms of democratic participation and inclusion, risks. While these issues are not unique to India,
leveraging the rapid growth in mobile phone they are amplified by low levels of education
usage and internet access in both urban and and literacy, a large youth population , high
rural India.106 This is significant because large levels of societal heterogeneity and low levels of
parts of the population were hitherto excluded regulatory capacity.
from mainstream political and social discourse
due to lack of access or affordability, as well as Big Tech platforms have tremendous power in
language barriers. Big Tech platforms have also shaping people’s beliefs and preferences, since
enabled new forms of two-way communication they are information gateways for much of India’s
between the Indian state and citizens, even for population. This dominance is amplified in India
citizens who are difficult to reach otherwise.107 due to the increasing reliance on social media
Activists, workers and civil society members can platforms to access print and television news
discuss issues and organize themselves through coupled with algorithms often deciding what
social media forums and groups. This creates an content people view.111 For example, Google,
opportunity for a more informed, inclusive, and with 95% of India’s desktop search enquiries,
vibrant public sphere. is a gateway to the internet for a vast majority
of Indians and has considerable influence over
Social media platforms have also impacted people’s beliefs and preferences.112 Google’s
the ways in which news and information are search algorithms can be tweaked to alter what
produced and distributed. For instance, Google users see first,113 an important consideration since
launched the News Lab initiative in 2015 to users tend to choose higher-ranked results more
work closely with the journalism industry. News than lower-ranked results.114 A study conducted
Lab covers a range of services and tutorials on in India in the run up to 2014 Lok Sabha elections,
30A Balancing Act: The Promise and Peril of Big Tech in India | How Big Tech is transforming India |
Big Tech platforms are not
simply publishers, but curators, showed that search engine manipulation
can have a large impact, especially because
elections are often won by small margins.115
social heterogeneity. Recent studies show that
those aged below 20 and above 50 are most
susceptible to fake news. Writing for The Hindu
editors and amplifiers of news Big Tech platforms can also shape public
discourse through their content moderation
BusinessLine, Shriya Mohan argues that for both
these age groups, the 'excitement of sharing
content' for free on a platform such as WhatsApp,
and information. They wield policies and practices. For example, Facebook
and Twitter are criticized for bending to political
pressure and biased moderation against certain
through their first smartphone, often 'proves
irresistible'.124 Similarly, the virality of TikTok
content is linked to the cultural context of small
immense gatekeeping powers, social groups, such as women and religious
minorities.116 A recent report by Equality
Labs, a research organization that focuses on
towns in India.125 Journalist Nilesh Christopher
observes that in these towns, consumption
and distribution of content is often driven by
especially for the millions of digital security for South Asian religious and
cultural minorities, found that Facebook did
not sufficiently enforce its own content policies
pre-existing caste politics and division along
community lines.126 Observers also link the
spread of misinformation to declining trust in
Indians coming online for the in India. The report highlighted Facebook’s
failure to permanently delete hateful content
that contain calls to violence, casteist slurs, and
established media institutions.127
Social media has also become a virtual space for
first time. sexist insults.117 Further, Facebook has reported
a spike in requests for user information and
content takedowns by the Indian government.118
political contestation and mobilization, leading to
the increasing politicization of these platforms.
Big Tech social media platforms have become
Thus, through search algorithms and content instruments and sites of mass dissemination of
moderation, private actors are shaping the political ideologies and brandishing of political
exercise of a constitutionally-guaranteed identities.128 The 2014 Lok Sabha elections came
fundamental right—free speech. to be known as ‘India’s social media election’.129
Since then, platforms like WhatsApp, Twitter and
Big Tech platforms have also facilitated the Facebook are ‘the preferred medium’ of political
risk of identity politics, leading to unfortunate messaging across political lines.130 Many political
instances of caste-based violence119 and mob parties have adopted social media campaign
lynchings.120 Globally, research has linked strategies and have set up social media or IT
such incidents to misinformation, algorithmic cells devoted to the task.131 Political parties,
amplification, and computational propaganda.121 candidates and other stakeholders spent $7.74
A recent report by the EU Disinfo Lab also draws million to enlist the services of companies such
attention to the funding and monetization of as Google and Facebook in the run up to the
disinformation. It uncovers instances in which 2019 Lok Sabha elections.132
the Amazon Associates program played a key
role in funding disinformation by providing ‘a In summary, Big Tech platforms are not simply
constant flow of monetized links usable by a publishers, but curators, editors and amplifiers
disinformation actor(s).'122 of news and information.133 They wield immense
gatekeeping powers, especially for the millions of
In India, these issues are amplified as they Indians coming online for the first time.
intersect with prevailing socio-economic
and cultural factors, including low levels of
literacy,123 a burgeoning youth population and
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