Context

• In the digital age, data has become a powerful tool for market dominance, leading to concerns over monopolistic practices by technology giants.
• The recent order by the Competition Commission of India (CCI) against Meta underscores the increasing scrutiny over data exploitation and anti-competitive behaviour in digital markets.
• Now it becomes imperative to explore the significance of the CCI’s decision, its broader implications in the global regulatory landscape, and the need for India to update its competition laws to address data-driven monopolies effectively.

An Overview of The CCI’s Order Against Meta

• On November 18, 2024, the CCI imposed a fine of ₹213.14 crore on Meta and introduced a five-year ban on sharing WhatsApp user data with other Meta-owned platforms such as Facebook and Instagram for advertising purposes.
• The order was based on the finding that WhatsApp’s 2021 privacy policy update constituted an abuse of its dominant position in the markets for Over-The-Top (OTT) messaging services and online display advertising.
• The policy mandated users to consent to data-sharing on a “take-it-or-leave-it” basis, reinforcing Meta’s market power and limiting competition.
• Meta appealed the decision to the National Company Law Appellate Tribunal (NCLAT), which granted a stay on the ban and the penalty on January 23, 2025, provided Meta deposited 50% of the penalty.
• This legal battle highlights the growing challenge of regulating tech giants that leverage data to consolidate their market dominance.

The Role of Data in Digital Market Dominance

• Data has become the backbone of the modern digital economy, often likened to oil but with an even greater utility.
• Unlike finite resources, data can be collected, analysed, and reused indefinitely, providing immense competitive advantages.
• Meta, for instance, leverages its vast user data to refine algorithms, enable hyper-targeted advertising, and create personalized experiences.
• This data-driven dominance fosters network effects, where more users generate more data, further strengthening a platform’s market position and deterring new competitors.
• Google’s case in India further illustrates this trend. In 2022, the CCI fined Google ₹1,337.76 crore for abusing its dominance in multiple markets, including mobile operating systems and app stores.
• Google was penalised for mandating the pre-installation of its apps on Android devices, a practice that was upheld by the NCLAT in 2023.
• These cases highlight how dominant players use their control over digital infrastructure to entrench their positions, making regulatory intervention crucial.

Global Regulatory Efforts to Curb Tech Monopolies

• United States: Antitrust Investigations and Lawsuits
  • Meta (Facebook, Instagram, and WhatsApp)
    • In 2020, the U.S. Federal Trade Commission (FTC) filed an antitrust lawsuit against Meta, accusing it of engaging in anti-competitive practices by acquiring Instagram (2012) and WhatsApp (2014) to eliminate competition.
    • The lawsuit argues that Meta’s acquisitions were not aimed at enhancing its services but rather at stifling emerging competitors in the social media and messaging markets.
    • The FTC has sought a breakup of Meta’s business to restore competitive conditions.
  • Google's Legal Challenges
    • In 2024, the U.S. District Court for the District of Columbia found Google guilty of violating the Sherman Act, the key U.S. antitrust law, due to its exclusive agreements in the search and online advertising markets.
    • Google has been sued for monopolising the digital advertising market by acquiring competitors, forcing advertisers to use its ad services, and limiting the interoperability of rival advertising platforms.
    • U.S. government has sought structural remedies, including breaking up parts of Google’s ad business to restore fair competition.
  • These legal actions represent a shift in the U.S. regulatory stance, which for years had been lenient toward digital monopolies.
  • With bipartisan support, there is a growing push for stricter oversight and legislative reforms to update antitrust laws for the digital age.
• European Union: A Pioneering Approach to Digital Regulation
  • Digital Markets Act (DMA) and General Data Protection Regulation (GDPR)
    • The Digital Markets Act (DMA), which came into effect in 2023, identifies ‘gatekeepers’, large digital platforms like Meta, Google, and Amazon, that must comply with specific rules to prevent anti-competitive behaviour.
    • The General Data Protection Regulation (GDPR), introduced in 2018, has set a global precedent for data protection by enforcing strict consent requirements and penalising unauthorised data usage.
    • The DMA mandates interoperability between messaging apps, prohibits self-preferencing (such as Google favouring its own search results over competitors), and requires companies to provide users with more control over their data.
  • Meta’s Facebook-Germany Case
    • In 2019, Germany’s Bundeskartellamt (Federal Cartel Office) found Meta guilty of abusing its dominant position by combining user data from various platforms (Facebook, Instagram, and WhatsApp) without explicit user consent.
    • The decision forced Meta to allow users to opt out of data merging across its platforms, setting a precedent for regulating data monopolization as an anti-competitive practice.
  • Google’s €8 Billion Antitrust Penalties
    • Over the past decade, Google has faced multiple fines in the EU for anti-competitive practices, totalling over €8 billion.
    • The European Commission imposed three major fines on Google.
    • €2.42 billion (2017) for manipulating search results to favour its shopping service.
    • €4.34 billion (2018) for forcing smartphone manufacturers to pre-install Google apps on Android devices.
    • €1.49 billion (2019) for anti-competitive advertising practices in online search advertising.
  • The EU’s approach to regulating digital monopolies is considered one of the most comprehensive in the world, balancing consumer protection, data privacy, and market competition.

The Way Ahead for India: Need for Reform in India’s Competition Law

• Despite CCI’s proactive stance, India’s current competition law—the Competition Act, 2002, lacks explicit provisions to tackle data-centric monopolies.
• Traditional antitrust frameworks focus primarily on price-based dominance, whereas digital markets function on the principles of data aggregation and network effects.
• Therefore, legal reforms must introduce ‘data monopolization’ as a key parameter for assessing market dominance.
• This would require redefining terms such as ‘market power’ and “dominant position” to align with the realities of digital competition.
• One potential solution could be mandating interoperability and data-sharing agreements to prevent monopolistic control over user information.
• Additionally, India could benefit from integrating its competition law with the Digital Personal Data Protection Act, 2023, to ensure a coordinated approach between data protection and market regulation.
• Drawing inspiration from the EU’s combination of the DMA and GDPR, India could create a more holistic framework to tackle the challenges of data exploitation and anti-competitive practices.

Conclusion

• The CCI’s action against Meta is a significant step in regulating the digital economy, but it also underscores the urgent need for legal reforms.
• As data-driven monopolies continue to shape market dynamics, India must modernise its competition laws to effectively address these emerging challenges.
• By learning from global regulatory efforts and implementing forward-looking policies, India can develop a competitive and fair digital marketplace while ensuring consumer privacy and innovation.
• The Meta case is not just a legal battle; it is a pivotal moment in the broader discourse on digital market regulation, shaping the future of India’s digital economy.

Q1. What was the main reason for the CCI’s fine on Meta in 2024?
Ans. Meta was fined for abusing its dominant position by enforcing a data-sharing policy on WhatsApp users, strengthening its market power unfairly.

Q2. How has the European Union tackled digital monopolies?
Ans. The EU introduced the Digital Markets Act (DMA) and General Data Protection Regulation (GDPR) to regulate tech giants and protect consumer data.

Q3. What action did the U.S. take against Google for monopolistic practices?
Ans. The U.S. District Court found Google in violation of the Sherman Act due to its exclusive agreements in search and advertising markets.

Q4. How did Australia regulate tech companies like Google and Meta?
Ans. Australia introduced the News Media Bargaining Code, requiring tech platforms to pay news publishers for using their content.

Q5 What lesson can India learn from global regulatory efforts?
Ans. India should integrate competition law with data protection policies, enforce interoperability, and strengthen penalties for monopolistic practices. 

Source:The Hindu

Context

• Despite criticisms regarding its effectiveness and bureaucratic inefficiencies, the UN remains the most significant global organisation dedicated to multilateral diplomacy.
• However, the introduction of the Disengaging Entirely from the United Nations Debacle (DEFUND) Act by U.S. Senator Mike Lee threatens to undermine the UN’s legitimacy and functionality by proposing a complete U.S. withdrawal.
• Such a move would have far-reaching consequences, not only for the UN but also for global governance as a whole.

The Threat to the United Nations

• Legal and Institutional Implications of the DEFUND Act
  • If passed, the DEFUND Act would sever the U.S.'s relationship with the UN by repealing fundamental legislation, including the United Nations Participation Act of 1945 and the United Nations Headquarters Agreement of 1947.
  • These laws are crucial because they legally formalise U.S. participation in the UN and establish its obligations, including financial contributions and diplomatic support.
  • Their repeal would mean the U.S. would no longer be bound by its commitments to the UN, effectively nullifying its role within the organization.
  • Furthermore, the DEFUND Act seeks to halt all financial contributions to the UN.
  • The U.S. is historically the largest contributor to the UN’s budget, providing approximately 22% of the UN’s core funding and 28% of the peacekeeping budget.
  • Cutting this funding would significantly impact UN programs related to peacekeeping, humanitarian aid, development, and health initiatives.
  • U.S. withdrawal could lead to funding shortages, weakening the UN’s ability to respond to global crises.
• Diplomatic and Geopolitical Consequences
  • Beyond financial concerns, the DEFUND Act would have profound diplomatic and geopolitical implications.
  • The U.S. has historically played a leading role in shaping UN policies, influencing major international decisions, and using its permanent seat on the UN Security Council (UNSC) to assert its foreign policy interests.
  • A withdrawal would mean relinquishing this influence, creating a power vacuum that could be filled by rival nations, particularly China and Russia.
  • These countries have already been expanding their influence within UN agencies, and a diminished U.S. presence could further tilt the balance of power in their favour.
  • Additionally, withdrawing from the UN could isolate the U.S. diplomatically.
  • While other global powers continue to engage in multilateral discussions on issues such as climate change, nuclear non-proliferation, and human rights, the U.S. would be left without a seat at the table.
  • This could weaken its ability to negotiate international agreements and influence global policies, ultimately reducing its strategic leverage on the world stage.
• Impact on UN Operations and Peacekeeping Missions
  • One of the most critical areas that would suffer from a U.S. withdrawal is UN peacekeeping operations.
  • The U.S. has been a key supporter of peacekeeping missions, providing funding, logistical support, and personnel training.
  • If the DEFUND Act passes, it would prohibit U.S. participation in these operations, leading to operational difficulties for UN missions in conflict zones such as South Sudan, the Central African Republic, and Mali.

The Shift Towards Economic Nationalism and the Consequence of Unilateralism

• The Shift Towards Economic Nationalism
  • The Trump administration’s economic policies also reflected a departure from multilateralism.
  • The implementation of aggressive tariffs under the guise of national security drew parallels to the protectionist policies of the 1930s, particularly the Smoot-Hawley Tariff Act.
  • That historical period saw a rise in trade barriers, contributing to economic instability and the onset of World War II.
  • In contrast, the post-war global economy was built on the principles of free trade, culminating in the establishment of the General Agreement on Tariffs and Trade (GATT) in 1947, which later evolved into the World Trade Organisation (WTO).
  • However, the U.S. under Trump actively undermined the WTO by blocking appointments to its Appellate Body, which resolves trade disputes.
  • This obstructionism has pushed the WTO into a state of crisis, jeopardizing the global trade system that has ensured economic stability for decades.
• The Consequences of Unilateralism
  • The broader implications of these actions are clear: the erosion of multilateral institutions threatens global governance, economic stability, and international law.
  • The Trump administration’s rejection of international cooperation in areas such as climate change, public health, and human rights has created a leadership vacuum.
  • The weakening of institutions like the UN, ICC, and WTO undermines collective efforts to address pressing global challenges, making it more difficult to coordinate responses to crises such as pandemics and climate change.
  • Furthermore, the U.S.’s retreat from multilateralism has sparked concerns about retaliation from other nations.
  • The idea of "Make America Great Again" (MAGA) is fundamentally at odds with the reality that global leadership requires cooperation, not isolation.
  • Without strong international alliances, the U.S. risks diminishing its influence and facing economic repercussions.

A New Opportunity for Global Leadership

• Amidst the U.S.'s retreat, non-Western nations, particularly India, have an opportunity to assume a greater role in global governance.
• India has consistently advocated for multilateralism and adherence to international law.
• During the G-20 Foreign Ministers’ Meeting in February 2025, India’s External Affairs Minister S. Jaishankar reaffirmed the importance of an inclusive approach to global challenges, emphasising the need for peaceful resolutions and international cooperation.
• Additionally, the current geopolitical climate presents an opportunity for India to push for long-overdue reforms in the United Nations Security Council (UNSC).
• As a rising global power, India has been advocating for a more representative and democratic UNSC structure.
• With the U.S. withdrawing from its leadership role, emerging economies like India can step up to shape the future of global governance.

Conclusion

• The ‘America First’ approach, characterized by economic nationalism and political isolationism, has significantly weakened the multilateral institutions that uphold international law and global stability.
• The potential withdrawal from the UN, sanctions on the ICC, and obstruction of the WTO signal a shift towards unilateralism that threatens the global order.
• While these actions may temporarily serve U.S. nationalist interests, they ultimately undermine long-term global cooperation and stability.

Q1. What is the primary goal of the DEFUND Act?
Ans. The DEFUND Act aims to sever the U.S.'s relationship with the UN by repealing key legislation and halting financial contributions.

Q2. How would a U.S. withdrawal impact UN peacekeeping operations?
Ans. It would disrupt funding, logistical support, and participation, weakening missions in conflict zones.

Q3. What diplomatic consequence might arise if the U.S. exits the UN?
Ans. The U.S. could lose influence in global decision-making, allowing rivals like China and Russia to expand their dominance.

Q4. How would revoking UN officials' functional immunity affect UN operations?
Ans. It could lead to legal and diplomatic conflicts, making it difficult for the UN to function effectively in the U.S.

Q5. Why is multilateralism important for addressing global challenges?
Ans. It enables collective action on issues like climate change, public health, human rights, and economic stability. 

Source:The Hindu