A U.S. lobby group, representing tech giants such as Google, Amazon and Apple, has appealed to India to reconsider its proposed competition law, similar to that of the European Union’s (EU), warning that it could drive up user costs.

What Happened: The US-India Business Council (USIBC), a part of the U.S. Chamber of Commerce, voiced its concerns in a letter to India’s Corporate Affairs Ministry, Reuters reported.

India’s proposed “Digital Competition Bill” is similar to the EU’s Digital Markets Act 2022 and aims to regulate large firms with a global turnover exceeding $30 billion (₹2.5 lakh crore) and at least 1 crore local digital service users.

The draft Indian law aims to prevent companies from misusing user data, favouring their own services over competitors, and lifting restrictions on downloading third-party apps. The USIBC contends that such regulations could hinder the introduction of new product features and improvements in user security.

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The lobby group cautions that the proposed law, which it considers wider in scope than the EU’s, could lead to a drop in investment in India, higher prices for digital services, and a reduction in service range.

The Indian government panel maintains that the new law is imperative to control the growing market power of a few large digital companies. The law could impose penalties of up to 10% of a company’s annual global turnover for violations like the EU’s law.

Why It Matters: This move comes amidst a global wave of increased scrutiny and regulation of big tech companies. Countries worldwide are introducing laws to regulate the digital market and protect user data.

However, the opposition from US tech giants underscores the tension between the need for regulation and the potential impact on innovation and user costs. The outcome of this debate could have significant implications for the future of the digital economy in India and beyond.

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