You Say ‘Coup,’ I Say ‘Koo’
India is a warning about unintended consequences for those looking to regulate Big Tech in the United States.
One can’t quite call it a coup, but U.S. policymakers are settling in for a long siege of the Big Tech citadel.
In late March, digital CEOs were digitally hauled to Capitol Hill to answer questions about their failure to preempt the very real attempted coup that happened on the same hill in January. The hearings were part of a push to reconsider a law that shields tech companies from responsibility for the messages carried on their platforms.
At the same time, a bill in Congress is poised to overhaul U.S. antitrust laws with profound implications for the industry. Prominent critics of Big Tech in the White House and Federal Trade Commission are poised to come aboard. Meanwhile, no less than 10 legislative initiatives targeting Big Tech lie in wait in the House of Representatives. Even critics on the Supreme Court are weighing in. And all this doesn’t even count antitrust lawsuits still pending from the previous administration.
What is striking about these proposed actions is they are far-reaching in their scope but narrow in their consideration of the markets these companies serve. That is, these efforts mostly focus on U.S. consumers. That is too narrow a frame for an industry with products that are borderless (except in the few countries that block them).
As of 2020, 55 percent of Facebook’s revenues came from outside the United States and Canada, while 53 percent of Alphabet’s revenues, Google’s parent company, are from non-U.S. markets. The share of overseas revenue is increasing as emerging markets grow faster than wealthier ones. The effects of U.S. policy and regulatory actions ripple everywhere; conversely, developments abroad have feedback effects back home in the United States.
On the rare occasion when U.S. tech policymakers do look overseas, they focus on two markets: China, as the alternate reality and closest Big Tech rival, and the European Union, as the world leader in holding Big Tech accountable. Influential writers on tech’s global impact reinforce the narrow outlook by focusing on lessons to be learned from Europe or on how to compete with China. That’s a mistake. Such an outlook compounds the U.S.-centricity of lawmakers and comes at a cost to U.S. consumers and public policy.
Developments in other, more fluid, markets can offer essential insights for U.S. policy, given the United States’ own dynamic market and evolving public policy. Australia is a case in point: Starting this year, it is requiring social media companies to pay news corporations and reporters for news the platforms host. Australia’s move is forcing the issue elsewhere, including in the United States.
Australia may have provided a spark on one critical issue but with concerns about content, misinformation, data protection, and antitrust increasing, there is so much else at stake. To explore a fuller range of issues while taking a tech policy tour overseas, a visit to an international market is among the wildest of tech wild cards. This market is India.
India may not really register among U.S. digital policymakers, but it is far from ignored by the digital industry. Google’s largest market share—above 95 percent—is in India. India is Facebook’s largest market by number of users, while Twitter is experiencing more growth there than anywhere else. The country could contribute 15 percent to 20 percent of Amazon’s growth in the next five years. All these companies have made substantial investments in India, even as the government of Prime Minister Narendra Modi is increasingly heavy-handed and interventionist in the tech industry.
Developments in India will have a global impact on the three most crucial tech policy questions: content, data, and competitiveness. The implications should give U.S. policymakers both a global frame of reference for the industry they now seek to rein in at home and reasons to pause and reconsider the full extent of their own policy responsibilities and impact. India is a cautionary tale of the unintended consequences of policy that fails to look ahead and anticipate its repercussions.
While U.S. policymakers have laid siege on the industry, their Indian counterparts have already staged a coup. A new proposed set of Information Technology Rules was announced in February, whereby the major social media platforms would be required to become “more responsible and more accountable” for the content they carry. A long list of criteria will be used to flag content that could be deemed offensive and asked to be taken down. In addition, content may violate the norms if it threatens “the unity, integrity, defense, security or sovereignty of India, friendly relations with foreign States, or public order, or causes incitement to the commission of any cognisable offence or prevents investigation of any offence or is insulting [another] nation.”
In other words, the criteria leaves plenty of room for government interpretation. To ensure the platforms comply, companies must have officials reside in India to respond to complaints. This requirement, viewed in the context of New Delhi, has threatened to arrest employees for non-compliance of earlier content takedown orders. In this way, these laws constitute one of the most aggressive actions anywhere in the world to hold platforms responsible for content.
The motivation behind this is, ostensibly, to maintain societal harmony and control misinformation, but it gives the government potentially unlimited power to squash dissenting voices and control the political narrative in India. The laws could set precedents elsewhere. In the United States, any lawsuits brought against platforms could cite takedown or blocking requests in India; this opens the door to a widening circle of restrictions on free speech, which could be detrimental to the common good.
Beyond content creation and sharing implications, proposals out of India can also change experiences worldwide. Consider, for example, that demands from Indian lawmakers would require Facebook-owned messaging tool WhatsApp to identify the originator of a message under scrutiny. The company would, in addition, have to track and store records of such messages and archive what each user shares
One of the primary benefits of WhatsApp is it assures end-to-end encryption and a very high standard of user privacy. By forcing a change in India, WhatsApp’s largest market by users, Indian regulators could fundamentally alter the way the platform works for everyone. Besides, changes in WhatsApp could affect privacy on all other Facebook-owned platforms as the company is planning to integrate the technologies.
A second hot-button issue out of India is the data localization requirement that dates back to April 2018—the storage of Indian user data in India. There are different flavors of this standard depending on the type of data: One requires the data be exclusively stored in India and the other requires copies of the data be available in India. Some data can be taken out of the country, but any sensitive data needs to be returned or deleted once it has been used for its given purpose. In the government’s eyes, “sensitive” data could include data involving non-Indians, thereby potentially compromising the privacy of U.S. citizens if their data is stored in India by government mandate.
Even if U.S. policymakers want to steer clear of dictating to the Indian government whether or not it can spy on its own citizens, the protection of individual rights and privacy of U.S. citizens ought to be core to their concerns and fiduciary responsibility.
India already leads the world in internet shutdowns, and with its restrictions on data access, it diverges sharply from global standards on privacy. This ought to be a crucial issue for U.S. policymakers since digital products are not only borderless, but their creation also draws on user inputs from anywhere. Restrictions on value-adding user inputs anywhere can degrade the experience for all users. For example, if a Wikipedia entry from an Indian user is blocked or interfered with, it affects the well-being of all Wikipedia users.
Government intervention in India’s digital market is tied to the all-important issue of market competition. Unquestionably, India is one of the most significant markets for Big Tech companies, but it also has an energetic domestic tech industry spurred on by the desire for homegrown tech options.
The idea of self-reliance was made famous in the 20th century by activist Mahatma Gandhi’s Swadeshi movement: a rejection of colonial exploitation and a push toward political independence through economic independence. But the most recent incarnation of self-reliance is the Atmanirbhar Bharat Abhiyan—or “Indian self-reliance”—campaign accelerated by the Modi government as part of its post-COVID-19 recovery plan. It has been warmly embraced by Indian tech start-ups, of which there are many. Consider Flipkart and Snapdeal in e-commerce; Ola Cabs in ride-hailing; Swiggy and Zomato for delivery; Paytm, PhonePe, and MobiKwik in digital payments; and a suite of services that is likely to build off of Jio Platforms, India’s largest telecom network.
Many of these start-ups have had the potential to scale up and gain experience and data in the large Indian market. They might use that experience to expand themselves in international markets as classic “disrupters,” which find a foothold in a corner of the market that is underserved by incumbent players, before making their way into the mainstream. redBus, for example, started in India and became one of the world’s largest online bus ticketing platforms. Others, such as the short video app Moj, filled the vacuum left by the banning of Chinese-owned TikTok India and could potentially take hold elsewhere, including the United States, which have lingering concerns about TikTok and data security.
Within this thicket of competitors, one tech start-up stands out: Koo, with more than 4.7 million users.
Koo is a bird’s sound in Hindi and, not entirely coincidentally, is positioned as a competitor to Twitter. It boasts features unavailable on Twitter and is tailored to the Indian market. It has multi-language capabilities already, and it plans to expand to 25 languages by the end of the year. Koo’s downloads surged by 159.9 percent on the day Piyush Goyal, India’s minister of railways, commerce, and industry, endorsed it to his 9.8 million followers on Twitter. This followed a 186.8 percent spike after Twitter defied the Indian government’s request to take down content supporting ongoing farmer protests in the country.
Koo may never displace Twitter worldwide or even in India, but it has been compared to a host of alternatives, such as Parler, that have popped up, fueled by support from the political right in the United States and elsewhere. And as the history of the digital industry shows, one ignores even tiny incursions at one’s peril. And with India’s own regulations favoring domestic firms, the thumb is on their side of the scale as they innovate and expand.
This brief tour of just one non-U.S. market leads to several conclusions.
First, policy actions overseas could set precedents in multiple markets. Of course, any action in the United States would accelerate the regulatory process as well. Policymakers in the United States must therefore be mindful of the collective impact of such actions and avoid the unintended consequence of creating conditions for a widespread squashing of free expression and civil liberties.
Second, U.S. policymakers ought to monitor demands by individual governments for changes in encryption standards on particular apps and platforms as these can harm consumer privacy more widely and can degrade the user experience for everyone. U.S. policymakers would do well to anticipate such possibilities and take the lead in international or multilateral negotiations to craft global data security and privacy standards before the issues are decided by governments acting unilaterally.
Third, although there is no doubt that U.S. Big Tech has enormous market power, there are markets where its power is challenged by homegrown competitors. The very presence of such competitive forces can change the terms of U.S. antitrust trials that are likely to last for many years. Policymakers in Washington ought to analyze the competition regardless of its country of origin and anticipate changes on the tech playing field of the future.
While U.S. policymakers are worked up about the coup on Capitol Hill, it would be wise for them to look further. Indeed, it is time to keep an ear to the ground for the Koos from far away.
Bhaskar Chakravorti is the dean of global business at Tufts University’s Fletcher School of Law and Diplomacy. He is the founding executive director of Fletcher’s Institute for Business in the Global Context, where he established and chairs the Digital Planet research program.