Policy Wrap: EU regulatory action likely on Bigtechs for false promotion of crypto assets, UPI accounts for 40% of real-time payments, India’s Internet economy to reach $1 trillion by 2030, and more
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ANTITRUST
EU regulatory action likely on Instagram, YouTube, TikTok, Twitter for encouraging false promotion of crypto assets
Alphabet's YouTube, Meta Platforms' Instagram, TikTok, and Twitter could face regulatory action after the European Consumer Group BEUC put forward a complaint to the European Commission and consumer authorities that the internet platforms allegedly encourage the false promotion of crypto assets.
Concerns about consumer protection in relation to digital assets like bitcoin and ether have been raised due to US regulators' lawsuits against Coinbase and Binance as well as by FTX's collapse last year.
The world's first complete set of regulations for cryptoasset regulation (MiCa) was adopted by the European Union last month.
The BEUC claimed in its complaint that the prevalence of false marketing for crypto assets on social media platforms constitutes an unfair business practise because it puts customers at risk of substantial harm, including the loss of sizable sums of money.
It requested the Consumer Protection Cooperation Network to mandate that the internet platforms establish tougher crypto advertising regulations and take actions to stop influencers from deceiving customers.
Consumer groups in Denmark, France, Greece, Italy, Lithuania, Portugal, Slovakia and Spain also signed up to the complaint.
PAYMENTS & ECONOMY
UPI accounts for 40% of all global real-time payments
According to Ritesh Shukla, CEO of NPCI International Payments Ltd (NIPL), the Unified Payments Interface (UPI), a digital payments railroad operated by the National Payments Corporation of India (NPCI), processes 40% of all real-time payments made worldwide.
He mentioned that 9.4 billion financial transactions were conducted in just the past month. Other objectives that NIPL is pursuing include helping other nations create platforms that promote financial inclusion, citizen welfare, and fintech incubation. NIPL is in charge of developing business strategy, leading business development, and maximising profitability by introducing NPCI's technology and solutions to global markets.
Countries are very interested in developing sovereign platforms employing technology under their control where data is processed locally, especially as an aftereffect to the Russia-Ukraine crisis.
There is an ongoing effort to assist other nations in developing infrastructure for advancing their own national agendas, fostering interoperability, supporting merchant payments when Indians travel abroad, and improving the experiences people have when receiving both incoming and outbound remittances.
The development of interoperability, he added, is another facet of UPI's global outreach. About 30 million Indians reside outside of their country. Every year, they send close to $100 billion to India. According to a World Bank estimate, the cost of cross-border remittances is 6% worldwide.
One of the important partnerships currently is that with PayNow in Singapore and UPI in India, which began in February. Whether the recipient is in Singapore or India, real-time money transfers are possible thanks to this technology, which has a transaction time of about 17-18 seconds.
India’s Internet economy to reach $1 trillion by 2030, MSME’s & startups to play a key role
According to a collaborative analysis by Google, Temasek, and Bain & Company titled "The e-Conomy of a Billion Connected Indians," India's internet economy is expected to rise from $175 billion in 2022 to $1 trillion by 2030.
The study, which is based on investor and consumer surveys, demonstrates that the expansion of important internet economy sectors including e-commerce, online travel, food delivery, and ride hailing is being driven by digital consumption.
The share of the internet economy in India's technology industry will increase from 48% in 2022 to 62% in 2030. According to the estimate, it will also make up 12–13% of India's GDP, up from 4-5% in 2022. It links the expansion of the Internet economy to India Stack's success, an increase in digital demand in tier 2+ cities, and the digitization of existing enterprises.
B2C e-commerce accounts for 40% of the digital GMV in India's Internet economy, which is projected to increase at a 6x rate over the next ten years, followed by B2B industries and SaaS.
India will become a more alluring place to invest as the digital economy continues to grow. According to the study, three out of five investors anticipate an increase in deal activity in India over the next two to three years. The majority of investors also stated that they intend to devote more than 75% of their capital to digital investments over the course of the following five to seven years.
Online payments, lending, and investing will continue to be a pillar of the internet economy, serving the credit and capital needs of both Tier 2+ consumers and MSMEs thanks to the strong foundation of both adoption and innovation in digital financial services.
As established companies and MSMEs invest more in digitization and startups continue to play a significant role in advancing the internet economy, the pace of digital disruption is anticipated to only go up.
ONDC
ONDC makes its debut in the B2B ecommerce space with the help of startups
Startups SignCatch and Rapidor are powering the buyer side and seller side platforms, respectively, for the government-backed Open Network for Digital Commerce (ONDC)'s debut of business-to-business (B2B) e-commerce.
In a closed network player group, the two retail tech companies completed their first B2B transaction last month. Micro, small, and medium-sized businesses will be able to use the network thanks to ONDC's new venture to perform B2B transactions.
By encouraging seamless connectivity and digital transformation, ONDC equips firms to get over these obstacles—such as difficult access to funding and expensive logistics—and embrace the benefits of B2B trade. Businesses may broaden their reach, create new alliances, and enter unexplored areas by utilising the open network, according to a statement from ONDC.
This change also enables them to leave behind their primarily offline operations and open up new prospects for development and achievement.
ONDC will now start providing services that compete with B2B businesses like Udaan, Amazon Business, IndiaMart, Dealshare, Jumbotail, and others as a result of its entry into the new market. On its new product, ONDC has enabled capabilities like dynamic pricing, bulk order buying, delivery planning, and embedded finance in the form of B2B credit.
According to a survey by consumer internet consultancy company RedSeer, the gross merchandise value (GMV) of the B2B ecommerce sector is anticipated to reach $90-100 billion by 2030. The survey mentions that the B2B general commerce market is anticipated to grow to a value of $1.2 trillion by 2030.
SIDBI plans to onboard 30 to 40 lakh small businesses on the ONDC platform within the next 6 months
In the upcoming three to six months, the Small Industries Development Bank of India (SIDBI) would add more than 30 to 40 lakh small enterprises to the government-backed Open Network for Digital Commerce (ONDC). Throughout the nation, SIDBI will collaborate with 500–600 local and large industrial associations.
On the business-to-consumer side, ONDC Chief Executive T Koshy stated that the grocery and food and beverage sectors experience roughly 15,000 retail orders daily, and the mobility sector experiences 35,000 to 40,000 rides in Kochi and Bengaluru every day.
In the past year, the network has grown to more than 200 cities and is currently in alpha and beta testing in eight categories, including home and kitchen, financial services, transportation, clothing and accessories, cosmetics and personal care, groceries, food and beverage, and electronics.
More than 160 business-to-business exchanges have already taken place on ONDC.
GAMING
Gaming startups team up to propose two self-regulatory bodies (SRBs)
Together, gaming startups and businesses have proposed at least two self-regulatory bodies (SRB), the specifics of which will be provided to the Centre soon.
One SRB of the two is being proposed by members of the All India Gaming Federation (AIGF), while the second SRB is anticipated to be founded in collaboration by businesses that are members of the EGF and the Federation of Indian Fantasy Sports, according to sources.
The Ministry of Electronics and Information Technology (MeitY), however, has the final say about the composition of the board of directors and the number of SRBs.
The members of EGF-FIFS SRB have suggested creating a "testing framework" to categorise and characterise games of skill and chance in an objective manner.
AI
Dutch privacy watchdog seeks additional information from OpenAI, expressing concerns regarding use of personal data
The Dutch privacy watchdog DPA stated on Wednesday that it is "concerned" about the use of personal data by software developers creating artificial intelligence (AI) and that it has written to OpenAI, which is supported by Microsoft, to request additional information.
Governments, particularly those in the European Union, are debating how to govern the technology after OpenAI's ChatGPT became the consumer application with the fastest-growing user base ever.
The organisation will be taking various actions in the future and have written to OpenAI to request some clarification on ChatGPT as a starting step.
DPA stated that it was looking for information about the company's data collection practises and data storage practises, including information obtained from user enquiries.
Britain to host first global summit on safety and security involving artificial intelligence
This autumn, the United Kingdom will host a global summit on the security of artificial intelligence, the British government announced on Wednesday.
The meeting will talk about ways to reduce the hazards of AI through globally coordinated action, including those posed by frontier systems.
Many governments worldwide are considering ways to lessen the risks associated with the new technology, which has seen a surge in consumer interest and investment since the release of OpenAI's ChatGPT.
Global regulators have been rushing to develop regulations limiting the use of generative AI, whose impact some have compared to the dawn of the internet era.
European Union calls for labels for AI generated content as it fights disinformation
The European Union is pressuring online platforms Google, and Meta and other tech companies that have signed up to the 27-nation bloc's voluntary agreement on combating disinformation, to intensify their efforts to combat fake information by labelling text, images, and other content produced by AI.
Vera Jourova, vice president of the EU Commission, stated that the potential of a new generation of AI chatbots to produce sophisticated content and visuals in a matter of seconds presents "fresh challenges for the fight against disinformation."
Jourova stated during a briefing in Brussels that online firms that have integrated generative AI into their services, including Google's Bard chatbot and Microsoft's Bing search engine, should implement measures to stop "malicious actors" from spreading misinformation.
Companies should implement technologies to "recognise such content and clearly label this to users" if their services have the potential to disseminate AI-generated misinformation, she added.
Microsoft, Google strategy to test AI search ads triggers criticism
Alphabet's Google and Microsoft are integrating advertisements into AI studies without giving users the choice to opt out, a move that has alarmed several companies already and runs the danger of generating additional backlash from the sector.
The two digital behemoths are competing to upgrade their search engines with AI that can generate text responses to open-ended searches. As a result of that, the market for search results advertisements, which is expected to expand by 10% to $286 billion this year, will be completely altered.
Both businesses claimed they are still testing advertising with generative AI elements.
Unauthorised testing of new ad placements is a practise that advertisers are finding to be disturbing. According to ad buyers, some advertisers are hesitant to spend their marketing money on features that are only accessible to a certain group of customers. In general, advertisers are concerned about having control over where their advertising is displayed online and would want to avoid having their ads shown next to offensive or improper content.
The concerns also tie into the fact that internet platforms increasingly offer AI solutions that could provide better outcomes for advertising but necessitate a certain amount of loss in control on their part.