Policy Wrap: Google not giving users enough options over its data processing, Startup funding in India drops by 33% from last year to $24 billion in 2022, and more

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Google not giving users enough options over its data processing, says German antitrust watchdog

The German antitrust watchdog, the Bundeskartellamt, or Federal Cartel Office (FCO), has issued a preliminary statement of objections to the tech giant's data processing conditions and stated that it is currently preparing to demand that it give customers more control over what it does with their information. A new German digital-competition law passed in 2021 was determined to be violated by Google, the nation's Federal Cartel Office stated on Wednesday.

The question is whether Google gives users enough control over its profiling of them for ad targeting, as well as how it collects and links user data from numerous services. Since a lack of consumer choice might harm competition, the antitrust agency has taken notice of this.

According to the early findings of the Bundeskartellamt, users are not given enough options as to whether, and how much they accept to this extensive processing of their data across services under the current agreements. The options presented thus far, if any, are particularly vague and insufficiently transparent. Users must be able to distinguish between the different reasons for which the data are handled.

Google utilised the information it acquired to "build very complete user profiles that it may then use for advertising and other purposes."

Germany’s antitrust body tightens grip on Google, states that its operations fit requirements for special abuse control

The German antitrust authority has determined that Google's operations fit the requirements for special abuse control, which was formed under an amendment to competition legislation introduced at the beginning of last year that was aimed at tech giants.

The German Federal Cartel Office, also known as the Bundeskartellamt, determined that Google has "paramount significance across markets." This decision, which stands for five years, is the first of its kind and opens the door for antitrust interventions that could foreshadow upcoming pan-EU ex ante rules that also target the dominant market power of tech giants.

The corporation has an economic advantage that leads to market-wide activity that is not appropriately restrained by competition, according to a news release from the FCO today.

Google's dominance in general search (80%+ in Germany), its market dominance in online advertising, its gatekeeping function as a gatekeeper of important services like YouTube and the Play Store on Android (which the FCO likens to "infrastructure"), its access to data as a result of holding so much market power — allowing it to further fuel competitive advantage via ad targeting and product development, and its market capitalization, according to the regulator, were all taken into account in its assessment.

The competitive advantage brought on by this access to data and other resources, like the "Google" brand, may be applied in a variety of ways across markets, it was emphasised. This makes it simpler to run, develop, and expand current services as well as to create brand-new ones.

Startup funding in India drops by 33% from last year to $24 billion in 2022

According to a PwC India research released on Wednesday, funding for Indian startups fell by 33% to $24 billion in 2022 compared to the previous year, despite being almost twice the amount seen in 2019 or 2020. According to the "Startup Tracker-CY 22" study, despite the general downturn, international investors remain optimistic about the Indian startup ecosystem.

According to the report, "Funding for Indian startups in CY22 was close to $24 billion, a decrease of 33% from CY21 but still more than twice the sums raised in CY20 and CY19 apiece." $13.2 billion was invested in startups globally in 2019, $10.9 billion in 2020, and $35.2 billion in 2021.

Amit Nawka, Partner – Deals & India Startups Leader, PwC India, stated that despite the slowdown in investment, some industries have remained optimistic, including SaaS (Software as a Service) and early-stage funding. It appears likely that the funding situation will start to normalise after 2-3 quarters because there is a sizable amount of dry powder ready to be invested.

He also noted that many firms were postponing discretionary purchases and expenditures in order to tighten operational models and maximise cash runway.

ADIF welcomes NCLAT’s decision on not granting stay to CCI directions on Google Play Billing Case

CCI in its order related to the Google play billing case, directed Google to allow app developers from using any third-party billing/ payment processing services, either for in-app purchases or for purchasing apps; not to impose any Anti-steering Provisions on app developers; and not to impose any condition (including price related condition) on app developers, which is unfair, unreasonable, discriminatory or disproportionate to the services provided to the app developers, including not to discriminate against other apps facilitating payment through UPI in India vis-à-vis its own UPI app, in any manner.

Google had applied for the appeal against the CCI order dated 25.10.2022 on Google Play Billing System (charging excessive commission) case. The matter was listed for admission before the NCLAT on 11.01.2023 along with Google’s interim application seeking a stay on the operation of the impugned order, along with stay on the penalty.

ADIF requested NLACT for not allowing the stay, as these Google practices are hampering the Indian startup ecosystem. NCLAT ordered that Google needs to pre-deposit 10% of the total penalty amount. However, no stay was granted on the directions.

DPIIT to conduct third party assessment of Startup India Seed Fund Scheme

A senior government official stated on Friday that the Department for Promotion of Industry and Internal Trade (DPIIT) is now conducting a third-party assessment of the Startup India Seed Fund Scheme to determine its impact on the ground.

In 2021, the Rs 945 crore initiative was introduced to offer funding to entrepreneurs for market entry, product testing, prototype creation, proof of concept, and commercialization. For the purpose of giving qualifying firms seed money through approved incubators located around India, the fund was divided into four years.

Shruti Singh, joint secretary for DPIIT, stated that despite the "excellent" feedback the incubators and entrepreneurs have provided regarding the programme, currently third-party reviews are being conducted so that someone on the ground has visibility.

She added that as of right now, the Alternate Investment Funds had received roughly Rs 7,900 crore under the Rs 10,000 crore Fund of Funds scheme.

When the scheme runs out of money by 2025, the department would want to ask the finance ministry for further funding, she continued.

Similar to this, out of the Rs 945 crore Startup India Seed Fund Scheme, Rs 455.25 crore have been authorised to 126 incubators, of which Rs 186.15 crore have been disbursed as of November 30.

New industrial policy aims to achieve One Nation-One Standard

The proposed new industrial policy, which would replace the industrial policy of 1991, aims to achieve One Nation-One Standard, encourage new businesses in every district, establish startup innovation zones at the level of urban local governments, and reward Indian speciality products by establishing high-end international brands.

To reinforce their credit rating system and MSME cluster financing models and to promote India as an appealing investment destination, the Department for Promotion of Industry and Internal Trade's (DPIIT) draft policy for MSMEs also suggests the creation of a Universal Enterprise ID.

The Statement on Industrial Policy 2022 also aimed to develop a strategy to raise the standard of made-in-India products through the establishment of a trade monitoring system, the branding of such items, and the comparison of the national metrology system with international systems.

NRE/NRO account holders with international mobile numbers can now transact through UPI

The Unified Payments Interface (UPI) ecosystem's participants have been ordered by the National Payments Corporation of India (NPCI) to permit non-resident account types, such as non-resident external (NRE) and non-resident ordinary (NRO) accounts with international mobile numbers, to sign up and conduct transactions through UPI.

This is contingent upon the member banks' obligation to guarantee that these sorts of accounts are only permitted in accordance with current Foreign Exchange Management Act (FEMA) regulations and adherence to the rules periodically issued by the relevant regulatory departments of the RBI.

By April 30, 2023, the UPI ecosystem's members must follow NPCI's instructions.

The remitter and beneficiary banks must also ensure that the relevant anti-money laundering/countering the financing of terrorism checks and compliance validation according to the requirements are made.

Along with the present domestic country code, NPCI will initially permit transactions from mobile phones with the following country codes: Singapore, Australia, Canada, Hong Kong, Oman, Qatar, USA, Saudi Arabia, United Arab Emirates, and United Kingdom.