Google Alert on Amazon: Trai, CCI need to adopt internet regulation 3.0

There is serious thinking that giants like Google, Amazon and Facebook need anti-trust regulation because they are undermining democracy, dominating culture & poised to dominate the industry with AI

Last week Google announced it will remove its YouTube service from Amazon’s Fire TV streaming devices, as well as its Echo Show smart-home device, effective January 1, 2018. The announcement is the most recent in a months-long feud between the tech giants. Google's move is a retaliation against Amazon's refusal to carry Google's products like the Chromecast or Google Home in its online store. When big tech companies compete in almost every space, this sort of tech war is inevitable. This author discusses the need for the next phase of regulation to not just involve content but also commerce – especially in virtual goods.  

It is pretty easy to understand things in the offline world but not so in a digital labyrinth.

You walk into a private business establishment, usually a 5-star hotel, and there is a sign that proclaims: “Rights of admission reserved.” This is usually  aimed at keeping out the less genteel from the elegantly affluent, or to prevent what they call “untoward incidents.” 

But what if the place was a public establishment, like an airport or a railway station? You cannot obviously pass off your discrimination as discretion or privacy in such places.

Strangely and interestingly, the Internet is becoming a place where practices of a certain kind to keep some people out is not going to be easy – especially if they are competitors. This is because the Internet is increasingly a public good, much like railway networks in most parts of the world. This has obvious implications for regulators such as the Telecom Regulatory Authority of India (TRAI) and the Competition Commission of India (CCI). I do believe the chairpersons of these guard dogs need to meet other occasionally over some productive lunches.

Events over the past weeks suggest that telecom giants, as well as near-monopolies on the World Wide Web, are straining at the leashes of Net Neutrality – the business of keeping content and commerce separate from carriage on the Internet so that there is no discrimination between packets of data.

TRAI  has clearly underlined the public character of the Internet and decidedly batted for Net Neutrality with its ruling in  November. It is understandably getting a pat on its back from net neutrality activists who say that it is showing the way even for America’s Federal Communications Commission (FCC), whose chairman of Indian origin, Ajit Pai, is in the midst of a controversy because he is planning to allow telcos elbow room to bend the neutrality principles on the ground that they need cash to build digital infrastructure. 

India, though much poorer, after two years of wrangles involving Facebook’s Free Basics initiative, is now enjoying a breather in the regulation game. However, more work lies ahead, it seems.The next phase of regulation will involve not just content but also commerce – especially in virtual goods.  Search giant Google’s parent Alphabet is miffed that Amazon is blocking sales of devices such as Google Chromecast and is in a tit-for-tat act is planning to strip its YouTube streaming video off Amazon’s devices such as Fire TV. 

Now, there are no telcos involved here, but pure software-driven trade blockade. Unfair, no? 

Where does that leave regulation? On the face of it, Google is a search monopoly and with its Gmail clout, has the contours of a public good --- much like the Internet itself. Amazon, in turn, is an undisputed king in e-commerce, though it does have competition. 

It is now reasonable for competition regulators to step in and work with telecom competitors to understand this new phase where cloud computing can create barricades that telecom giants may not be able to. 

Now, Google is no stranger to allegations of anti-competitive behaviour, and has faced investigations and billions of dollars in fines. India’s own CCI rapped Google on its knuckles two years ago in an early ruling against abusing its search dominance.  Facebook is also no stranger to similar probes. Apart from being accused of helping Russian agents help Donald Trump’s elections through advertisements, it has also faced  allegations of filtering right-wing news. 

In a networked economy where software protocols and algorithms can act as gatekeepers, for Net Neutrality to have true meaning, monopolistic software-driven marketplaces or platforms may need to be regulated in the coming days in an alert manner – and preferably with digital era speed rather than bureaucratic hearings.
 

This is not exactly a new game. Microsoft has faced fines and action in the European Union for trying bundle its Explorer browser with its operating system, Windows, when the software platform dominated personal computers in the early  years of the Internet. Google has been in the thick of a similar probe involving its popular Android platform. Adobe had run into Apple’s digital untouchability when its Flash software was kept out of iPads. 

All these disputes show that regulators need to be network-savvy and active, not just on the simple element of keeping carriage and content separate but also in terms of knowing how winks and nudges of algorithms and software code keep competitors at bay or customers imprisoned in walls they do not quite understand.

India’s competition law that came into force in 2009 subsumed the erstwhile monopolies and restrictive trade practices law, but it seems restrictive trade practices need a fresh look. Digital age dogfights will not be simply over market-share-based dominance but over network and software-related issues. There is serious thinking  hat giants like Google, Amazon and Facebook need anti-trust regulation because they are undermining democracy, dominating culture and poised to dominate the industry with software applications and artificial intelligence.

Clearly, the chiefs of the CCI and the TRAI need to walk into a bar, have a drink and exchange notes on new-age trade tactics. You could call it Regulation 3.0.

(The author is a senior journalist and editor who has worked for Reuters, Business Standard and Hindustan Times. He is currently an independent media entrepreneur, consultant and columnist. He is listed among the top 200 Indian influencers on Twitter. He tweets as @madversity)