Context

In 1890, Senator John Sherman asserted that just as society rejects political monarchy, it must also reject monopolistic control over essential goods and services. This statement led to the creation of the Sherman Antitrust Act, which became the cornerstone of competition law in the United States and influenced similar laws worldwide, including in India.

Though the definition of what constitutes a "necessity" has evolved, Sherman''s warning about concentrated market power remains highly relevant—especially in today’s digital economy. As India aspires to become a global technology leader, it now faces growing concerns about monopolistic practices by global digital corporations, particularly in relation to access, discovery, and monetization avenues for domestic start-ups.

India’s Digital Economy and Its Strategic Vision

• In 2022–23, India’s digital economy accounted for 74% of its GDP, underscoring its centrality to national progress.
• The number of start-ups surged from 2,000 in 2014 to over 31,000 in 2023, reflecting an expanding entrepreneurial ecosystem.
• These start-ups are key to achieving the government’s $35 trillion ‘Viksit Bharat’ vision by 2047.

Despite advancements in infrastructure, the commercial and discovery platforms essential for digital innovation are largely controlled by foreign tech giants, creating market asymmetries that hinder the growth of Indian innovators.

Digital Gatekeeping and Market Concentration

A prime example of digital gatekeeping is Google’s dominance in India’s mobile digital ecosystem:

• With Android holding around 95% of the mobile OS market, Google exercises significant control over how Indian users access and interact with digital services.
• Indian developers are often forced to comply with high commission fees and unfavourable terms, giving undue advantage to select players.

A recent complaint to the Competition Commission of India (CCI) by a prominent Indian gaming company highlights this issue:

• The case targets Google’s Real Money Gaming (RMG) Pilot Program, which allowed only two gaming formats—Daily Fantasy Sports (DFS) and rummy—on its Play Store.
• This exclusionary policy restricted other legitimate gaming types from being listed.
• One DFS company reportedly gained 55 million users in a single year via the program.
• Simultaneously, changes to Google’s advertising policies eliminated a key promotional channel for many start-ups, which previously relied on its ad services for over two-thirds of app downloads.

Economic Consequences of Market Distortion

Such preferential practices have broader economic repercussions:

• Reduced competition leads to diminished innovation, limited consumer choice, and compromised product quality.
• Overdependence on a few digital intermediaries reduces the resilience of the ecosystem.
• For a developing economy like India, where inclusive growth depends on start-up-led innovation, this poses a major risk.

The United States offers a cautionary precedent: the unchecked dominance of monopolies has led to fewer Initial Public Offerings (IPOs) and rising entry barriers for new businesses. If similar patterns take hold in India, the resulting loss will affect start-ups, consumers, and the economy at large.

Policy Imperatives: Building a Fair Digital Marketplace

While global technology firms like Google are foundational to the digital economy, they must be held accountable to the power they wield. To ensure fair competition:

• The Indian government and institutions like the CCI must enforce equitable market regulations.
• The ongoing CCI case is not merely a private business dispute; it reflects a broader demand for transparent and non-discriminatory digital platforms.
• It revives Sherman’s vision of preventing economic monopolies and underscores the need for a democratized digital economy.

Conclusion

Senator Sherman’s 19th-century warning against monopolies resonates with remarkable clarity in 21st-century India. As India advances in its digital transformation, it must remain alert to monopolistic forces that threaten to undermine its development goals.

Effective antitrust regulation, strong institutional oversight, and a commitment to fair competition will be essential to sustaining a vibrant, inclusive, and innovation-driven start-up ecosystem, aligning with India’s long-term vision for Viksit Bharat and ensuring Sherman’s principles are upheld in the digital era.