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"Analyzing the Impact of Big Tech Dominance on Critical Digital Public Services Infrastructure in India"

Updated: Jun 11


Global Governance Initiative (Whitepaper)
Review of Critical Digital Public Services Infrastructure in India: Addressing vulnerabilities & Big Tech Dominance

If you are interested in applying to GGI's Impact Fellowship program, you can access our application link here.


 

Summary


India's public services infrastructure is undergoing a rapid digital transformation. Digital Public Infrastructure (DPI) is more than a tech buzzword; it’s a transformative concept that India has championed on the global stage. The nation’s unique DPI initiatives, such as digital ID (Aadhaar) and payment infrastructure (UPI), have been highlighted by the Digital Economy Working Group (DEWG) under the G20 umbrella(1).  The “Digital India” initiative was launched by the government of India to make India a knowledge-based economy and society that is empowered by new-age emerging technologies. The three main pillars upon which the “Digital India” initiative is based are as follows :




A large and vibrant digital economy is opening up in India due to the proliferation of mobile phones, spread of internet services, a rising youth population and growing adoption of digital services. Currently, there are over 692 million internet users in India, making India the second largest internet user base in the world. By 2017, the number of Indian-language internet users (234 million) had already surpassed that of English users (175 million). Concurrently, the economies of mid-sized towns and cities are growing and the spread of e-commerce is driving digital initiatives aimed at ‘building for Bharat’ i.e. the mobile-first, non-English speaking, non-urban internet users in India. As the number of internet users in India continue to grow, India is rapidly emerging as a significant market for Big Tech companies. For instance, Facebook has 328 million monthly active users (MAU)  and a user base of 367 million users in India—the highest in the world. WhatsApp has more than more than 400 million MAU in India—also the highest in the world. Indians account for the highest activity on the Android operating system’s official app store, with up to 1 billion app downloads every month.


In short, digitisation will be the key to citizen empowerment. Under the right conditions of interoperability and incentives for innovation, Digital public infrastructure (DPI) could offer a level playing field for small businesses, where they can innovate and compete with larger firms. In this regard, governments and regulators can play a critical role in ensuring fair competition and encouraging private sector participation in DPI. For larger, established businesses, integrating DPI can involve costs and operational changes. This may entail complex interactions between the government, industry, and consumers, which can be resolved by focusing on practical use cases. Some countries, such as India, Brazil, Singapore, and Estonia, have already successfully adopted DPIs. Beyond payment, identity, and data-sharing systems, multiple use cases of DPI can also be found for improving logistics and delivery systems and building inclusive social protection systems. For example, fast payment systems such as India’s Unified Payments Interface (UPI) and Singapore’s PayNow enable faster domestic as well as international transactions, allowing users to pay merchants in various countries. The UPI ecosystem also triggered the development of creative products in the financial sector, covering services like P2P transactions and investments. 


While big tech companies offer opportunities for efficiency and access, their dominance is creating vulnerabilities and hindering domestic innovation. Most of this can be attributed to the dominance of big tech players, whose data storage and data sharing practices have resulted in accusations of “Digital Imperialism”. The cloud that powers much of the world’s tech industry is grounded in vast data centres located mainly around northern Europe and the US coasts. Yet, at the same time, US Big Tech companies are increasingly turning to markets in the global south for expansion as enormous numbers of young tech savvy populations come online. Take, for example, the case of Facebook. While India is the country with the biggest amount of Facebook users, when you look at the location of Facebook’s 15 data centres, ten are in North America, four in Europe and one in Asia – in Singapore. Hence, as international negotiations over data flows intensify, in the interest of security it is only natural for India to stress for “data localisation” – the bid to keep citizens’ data within their own country.




One of the most notable examples of tech dominance hindering domestic innovation is that of Europe as it grapples with the risks posed by Chinese technology, particularly in the realm of 5G networks. This has prompted a necessary reassessment of technological independence across sectors crucial for national security and privacy protection. Yet, the pervasive dominance of Chinese tech presents deeper challenges for Europe. European awareness of the perils associated with Chinese technology, notably in the context of 5G, was heightened amidst the COVID-19 crisis. This cautious approach stems from concerns over the authoritarian nature of the Chinese regime, underscoring the imperative to protect national security and personal data. While some European countries have taken decisive steps to limit Chinese involvement in their telecommunications infrastructure, others remain uncertain. Germany, in particular, is a focal point due to ongoing debates surrounding Huawei's role, influenced by economic interests and concerns about out-phasing costs. Nonetheless, Europe's collective stance against high-risk suppliers in critical network components is pivotal for ensuring security.


This white paper explores these challenges and proposes recommendations to strengthen India's critical public services infrastructure by:


Enhancing Openness and Interoperability: Promote open standards and data portability to ensure public services are not locked into proprietary systems. The GPS system serves as an example of a public good that was turned into a platform for private innovation—in this case, the lowest level of a public good (mapping data) was made available to the private sector to build a service. This data “club” model, where a government-owned, non-competing good is made available at low costs, provides a parallel to DPIs. Applications of DPI can be replicated using this model, where companies create derivative products from the data made available through a public good.


Investing in Domestic Innovation: Support research and development (R&D) in critical technology sectors to foster homegrown solutions.


Strengthening Regulatory Frameworks: Develop regulations that address data privacy, security, and competition concerns in the digital public services landscape. The government can build a clear regulatory framework around DPIs and data that gives firms predictability and trust. Further, the network effects of DPIs tend to create monopolization. It can be mitigated by levelling the playing field to allow all private players to build DPIs, by ensuring open access to DPIs, and by implementing competition regulation. In this regard, promoting and preserving competition in the DPI space is crucial. A competitive environment ensures that the benefits of DPI are widely distributed, encourages innovation, leads to better services, and sidesteps monopolistic tendencies. Creating a business ecosystem that balances the powers of the government and the private sector is also vital. This requires inclusive governance and efficient regulatory roles that are focused on balancing interests, all while placing customers at the centre.




1.Introduction


India's public services sector is embracing digital technologies to improve service delivery, transparency, and citizen engagement. However, it is grappling with aging systems, population growth, and urbanization. Funding shortages and implementation bottlenecks hinder progress in crucial sectors such as transportation, healthcare, education, and utilities. In addition to this, excessive reliance on foreign hardware and software in India can pose several threats to the country's social infrastructure such as :


1.Dependency: Excessive dependence on foreign hardware and software can make India vulnerable to supply chain disruptions, trade tensions, and geopolitical conflicts. Any disruption in the supply of critical components or software updates could disrupt essential services such as healthcare, education, transportation, and communication, undermining the resilience of India's social infrastructure. Some examples include:


Fintech : Google Pay has acquired nearly 70 million users and carried out more than 2.5 billion transactions, closely followed by Walmart-owned PhonePe. Aside from Amazon Pay, Amazon has also launched an instant zero interest credit service in India, called Amazon Pay Later.


Cloud : Google announced plans to launch a second cloud region in India, to strengthen cloud services in India for businesses, hospitals and public sector organizations, amongst others. Similarly, many businesses and government services rely on Amazon’s cloud infrastructure. By providing such digital infrastructure, Big Tech companies align themselves with the nation-building narrative around technology in India.


2.Data Security and Privacy: Foreign hardware and software may pose risks to data security and privacy, as they could be subject to surveillance or cyberattacks by foreign governments or malicious actors. Unauthorized access to sensitive personal information could compromise the integrity of India's social infrastructure, including government databases, financial systems, and healthcare records, leading to identity theft, fraud, and other forms of cybercrime. For eg : Whatsapp Pay has been allowed a phased roll-out in India, provided Facebook maintains compliance with RBI’s data localization norms.


3.Technological Sovereignty: Excessive reliance on foreign hardware and software may erode India's technological sovereignty, as it could limit the country's ability to develop and deploy indigenous technologies that are tailored to its specific needs and priorities. This could hinder innovation, economic development, and strategic autonomy, undermining the long-term sustainability of India's social infrastructure.


For example, many Indian start-ups rely heavily on products and services such as search engine optimization and advertising platforms provided by foreign technology companies, including Big Tech. Similarly, many start-ups rely on backend infrastructural support like AWS and Microsoft Azure for their software products and services. WhatsApp has partnered with Invest India for the Startup India-WhatsApp Grand Challenge to address local problems. Both Google and Facebook run accelerator programs for start-ups in India.


4.Economic Implications: Overreliance on foreign technology could result in substantial outflows of capital as India pays for licenses, subscriptions, and maintenance services. This could impact India's economy, leading to a drain on resources and hindering the development of indigenous technology capabilities.


5.Regulatory Challenges: Regulating the activities of foreign hardware and software companies operating in India can be challenging due to jurisdictional issues, differences in legal frameworks, and the complexity of emerging technologies. Weak regulatory oversight could lead to abuses of market power, anticompetitive practices, and violations of consumer rights, compromising the integrity and inclusivity of India's social infrastructure.


For example, the CCI, in early 2019 ordered a full probe into the alleged anti- competitive actions of Google in India, particularly in relation to its dominant market position in the Android market. In the e-commerce sector, both the All India Online Vendors Association (AIOVA) and Confederation of All India Traders (CAIT) have filed cases against Flipkart and Amazon, accusing them of abusing their dominant market position, favouring ‘preferred sellers’ on the platform, and hurting small sellers through discriminatory pricing techniques.  Further, sellers add that Amazon is able to leverage access to vast amounts of purchase data to introduce private labels or made-for-Amazon only brands.


6.Freedom of Expression: Big Tech's control over online platforms and content moderation practices can influence freedom of expression. Decisions on what content is allowed or removed may shape public discourse and limit diverse viewpoints.


For example : A recent study conducted by the Reuters Institute and University of Oxford shows that people in India increasingly rely on digital platforms—search (32%) or social media (24%)—as their main way of accessing news online(17). Only 18% access news directly from traditional media companies or news channels. Media outlets heavily use social media platforms such as Facebook and WhatsApp to distribute news and information.


In India, these issues are amplified as they intersect with prevailing socio-economic and cultural factors, including low levels of literacy, a burgeoning youth population and social heterogeneity.


7.Democracy and Governance: The influence of Big Tech in public domains like healthcare, education, and public administration can impact democratic processes and governance. Their involvement in critical services may raise questions about accountability, transparency, and the democratic control of essential functions.


Google’s AdSense is available in Marathi, Hindi, Bengali, Tamil and Telugu. In 2017, Google partnered with Reliance Jio to reuse its voice assistance technology to operate on feature phones.


The 2014 Lok Sabha elections came to be known as ‘India’s social media election. Since then, platforms like WhatsApp, Twitter and Facebook are ‘the preferred medium’ of political messaging across political lines. Many political parties have adopted social media campaign strategies and have set up social media or IT cells devoted to the task. Political parties, candidates and other stakeholders spent $7.74 million to enlist the services of companies such as Google and Facebook in the run up to the 2019 Lok Sabha elections.


8.Justice and Equity: The expansion of Big Tech into various sectors can exacerbate inequalities and injustices. Issues such as digital divide, algorithmic bias, and discriminatory practices in technology deployment can undermine efforts towards justice and equity in society. For example : Google, with 95% of India’s desktop search enquiries, is a gateway to the internet for a vast majority of Indians and has considerable influence over people’s beliefs and preferences. Google’s search algorithms can be tweaked to alter what users see first, an important consideration since users tend to choose higher-ranked results more than lower-ranked results.







2.Addressing Big Tech Dominance





Tech giants like Google, Meta Platforms (formerly Facebook), and Amazon exert significant influence in India's digital ecosystem:


1.Google Android is a market leader in the mobile operating system market, with 94.45% market share. Google Pay has also clocked more than 300 million transactions in India as of June 2019.


2.India constitutes Facebook’s largest market, with more than 270 million total users and 400 million monthly average users for whatsapp.


3.Amazon also has a large presence, with at least 30% market share in e-commerce and more than 5.5 lakh sellers on its platform.


4.Walmart is a leader in the e-commerce space, with reportedly 60% market share through its subsidiary Flipkart.


5.Chinese counterparts such as TenCent, Alibaba and Baidu have also invested in India, funding some of the biggest unicorn start-ups such as Paytm and Ola Cabs.


Big Tech has expanded its reach into public domains such as healthcare, education, and public administration. For example, in Slovenia, small-scale issues like rat infestations and rubbish disposal have been offered up for private involvement via "Smart Tech". Additionally, technology companies have provided infrastructure to public institutions, often at little or no cost, or funded by research and innovation projects like the EUs Horizon 2020. This expansion has also extended into areas such as security, policing, and migration, with potential for human rights breaches and discrimination.


The conflicts that arise between individual rights and Big Tech's dominance in public domains are multifaceted. Big Tech's expansion into public domains, such as healthcare, education, and public administration, has significant implications for individual rights and the concept of what is "public" in society. This expansion has shifted the reach of technology companies deeper into public domains, fundamentally altering the landscape.


One conflict arises from the shift in power dynamics, as Big Tech's dominance was traditionally maintained through data extraction from its user base on large platforms. However, this dominance has now extended into public domains, raising concerns about the potential impact on individual rights and public spaces.


Furthermore, the involvement of technology companies in "Smart Cities" and their role in shaping the infrastructure of public spaces raises questions about the balance between individual rights and corporate influence. This raises concerns about the potential for private companies to wield significant influence over public infrastructure and services, potentially at the expense of individual rights and public interests.

 

Overall, the conflicts between individual rights and Big Tech's dominance in public domains revolve around the potential for corporate influence to reshape public spaces and services, potentially impacting individual rights and the concept of the public good.


The dominance of these platforms raises concerns regarding competition, data privacy, and equitable market access.




3.Recommendations


To create an inclusive, secure, scalable and efficient public services infrastructure, following measures can be adopted,


1. Enhancing Openness and Interoperability:


  • Open Standards and Interoperability:

  • Establish a central government body to develop and enforce open standards and data portability mandates for public service platforms.

  • Incentivize the use of open-source software solutions in government projects.


  • Data Governance:

  • Strengthen the legal framework for data privacy and security, drawing on international best practices like the General Data Protection Regulation (GDPR).

  • Explore data localization policies requiring storage of sensitive public service data within India. Secondly, we need to develop global standards through a multilateral dialogue led by India.

  • Establish a data governance body to oversee data collection, usage, and sharing practices by government agencies and service providers.

  • Competition and Anti-Trust:

  • Review existing competition laws and adapt them to address the specific challenges of the digital marketplace.

  • Empower regulatory bodies to investigate and penalize anti-competitive practices by big tech companies.

 

Possible solution: Strategic Implementation of Localized Data Storage Systems through "Databox" Technology.

 

Proposal: Introduce and promote the widespread adoption of "Databox" technology, a pioneering, localized data storage solution. Databoxes are secure, physical devices that empower individuals to store their personal and sensitive information, ranging from social media data to critical financial records. Access to the data within these Databoxes will be strictly governed by the owner, thereby substantially enhancing data privacy and security.

 

Implementation Strategy:

·Pilot Deployment: Initiate the Databox implementation in high-tech cities with higher discretionary income levels (e.g., Bangalore, Hyderabad, Pune, Mumbai, Ahmedabad, Delhi). These regions are not only technologically advanced but also house populations with a greater vulnerability to data breaches, making them ideal for early adoption.


·Regulatory Framework: Develop and enforce a comprehensive set of regulations mandating the integration of Databox technology with essential public services. These regulations should include provisions for:


·Mandatory sharing of specific categories of data with government and local municipal bodies, ensuring vital public service functionalities while respecting individual privacy.

·Rigorous security standards for Databox manufacturers and service providers to protect against unauthorized access and cyber threats.


·Public-Private Partnerships: Encourage collaborations between the government and nascent startups specializing in Databox technology. Such partnerships will facilitate innovation, reduce financial burdens on the public sector, and expedite the technology's adoption.


·Awareness and Education: Launch targeted awareness campaigns to educate the public on the benefits of Databox technology, focusing on its potential to enhance data privacy, security, and national sovereignty.


·Incentivization Programs: Implement tax incentives and subsidies for both consumers purchasing Databoxes and companies involved in the production and maintenance of this technology. This will lower barriers to entry and stimulate market growth.

 

Expected Outcomes:

·Data Sovereignty: Localized data storage will significantly reduce dependence on international tech giants, bolstering national data sovereignty.


·Enhanced Privacy and Security: By centralizing control over personal data, individuals can better protect themselves against breaches and unauthorized data exploitation.


· Economic Benefits: Stimulating the local tech ecosystem through the development and adoption of Databox technology can drive innovation, create jobs, and position India as a leader in digital infrastructure.


2. Investing in Domestic Innovation:

  • Public-Private Partnerships (PPPs):

  • Establish PPP models to leverage private sector expertise in developing innovative public service technologies.

  • Ensure data privacy and security are prioritized within PPP agreements.

  • Funding for R&D:

  • Increase public and private funding for R&D initiatives focused on critical areas like e-governance, cybersecurity, and digital identity management.

  • Offer tax breaks and other incentives to companies developing domestic public service solutions.

  • Skilling and Training:

  • Develop comprehensive training programs for government officials on digital procurement processes, data management practices, and cybersecurity protocols.

  • Bridge the digital skills gap by investing in STEM education and promoting entrepreneurship in the public services technology sector.

 

Possible solution: Establishment of a Global Regulatory Body for Big Tech Oversight.

 

Proposal: India can take the lead to form a Global Regulatory Body (GRB) similar to that of International Solar alliance which will function as a comprehensive overseer for the technology sector, focusing on promoting transparency, competition, and security in the digital landscape. This body would serve as an international forum for addressing and resolving issues related to the monopolistic practices of Big Tech firms and their impact on global cyber threats.

 

Key Functions and Structure:

·Monitoring and Enforcement: Develop a global regulatory framework that includes standards and guidelines for fair competition, data protection, and cybersecurity. The GRB will have the authority to enforce these standards, ensuring compliance through audits, sanctions, and, where necessary, litigation.


·International Collaboration: Act as a platform for cooperation among national regulatory agencies, facilitating the sharing of information, best practices, and strategies for managing digital threats. This collaborative approach will enhance the global community's capacity to respond to and mitigate cyber risks.


.Dispute Resolution: Provide a neutral and effective mechanism for resolving disputes between nations and Big Tech companies, ensuring that the interests of all parties are fairly represented and protected.


·Research and Development: Spearhead international research initiatives aimed at understanding the evolving digital landscape and its implications for global security, economy, and society. This will inform the GRB's policies and recommendations, ensuring they remain relevant and effective.


·Public Awareness and Education: Engage in global outreach efforts to educate the public and stakeholders about the challenges and opportunities presented by Big Tech dominance, promoting a more informed and proactive approach to digital citizenship.

 

Implementation Strategy:

 

·International Agreement: Secure the commitment of nations through diplomatic channels, leading to the formal establishment of the GRB under an international treaty.


·Inclusive Governance: Ensure the governance structure of the GRB reflects the diversity of its member states, incorporating representatives from governments, the private sector, academia, and civil society.


·Funding Mechanism: Establish a sustainable funding model through contributions from member states, grants, and potentially a levy on the revenues of major tech companies, subject to international agreement.

 

Expected Outcomes:

·Enhanced Global Security: A coordinated approach to managing cyber threats and ensuring the responsible use of technology by Big Tech firms.


·Fair and Competitive Marketplaces: The prevention of monopolistic practices, fostering innovation, and enabling the growth of new entrants in the digital economy.


·Protection of Individual Rights: Strengthened safeguards for consumer data and privacy on a global scale.


3. Strengthening Regulatory Frameworks:


  • Phased Approach: Implement these recommendations in a phased manner, prioritizing critical areas like data privacy and interoperability.


  • Stakeholder Engagement: Actively engage with all stakeholders, including government agencies, private sector companies, civil society organizations, and citizens, to ensure inclusive policy development and implementation.


  • Performance Monitoring: Establish clear metrics and performance indicators to track progress towards a robust and innovative public services infrastructure.




4.Conclusion


India's innovation ecosystem shows promise, evidenced by its 40th rank in the Global Innovation Index (GII) 2023. However, challenges persist, including limited access to capital, infrastructure deficits, and a shortage of skilled talent. Initiatives like the Atal Innovation Mission and Startup India aim to bolster entrepreneurship and innovation but require sustained support and enhancement. By addressing the challenges of big tech dominance and fostering domestic innovation, India can create a robust and resilient domestic public services infrastructure that empowers its citizens and fuels its digital economy. This white paper offers a roadmap for achieving this vision and ensuring India's public services infrastructure remains secure, efficient, and citizen-centric in the digital age.




Meet The Thought Leader





Ms. Laboni Singh is a mentor at GGI and is currently working at The Bridgespan Group as an Associate Consultant. She takes a keen interest in socioeconomic development issues, public policy, and equity across different vectors of gender, caste, class, and ability, which in turn fueled her transition from working at a global bank to the social sector. She is an Urban Fellow from the Indian Institute for Human Settlements, Bangalore and has a bachelors degree in Economics from St. Stephen's College, University of Delhi.




Meet The Authors (GGI Fellows)




Rishabh Srivastava is a civil engineer who worked as an executive engineer in the Central Public Works Department(CPWD), Govt of India through prestigious UPSC Indian engineering services. He graduated from IET Lucknow, U.P. with Btech. in civil engineering in 2017. Thereafter he joined CPWD in 2018. During his six year stint at CPWD he has served in various capacities in Nagpur and meghalaya looking after various infrastructure works of national importance. Currently he is pursuing Post graduate programme in management at the Indian school of business.





Being an engineer by profession and an entrepreneur at heart, Nishant Kanchan holds a B.Tech in Chemical Engineering from NIT Jalandhar. At Jindal Steel and Power, he spearheaded the launch of an eco-friendly soda ash plant, highlighting his commitment to sustainable technology. Nishant also excels in the financial sector, creating platforms that democratize education and financial knowledge. With admission secured at the Frankfurt School of Finance and Management, Germany. He is set to begin his Master’s in Management this August, ready to blend his technical expertise with strategic business insights for globally impactful, sustainable initiatives.



If you are interested in applying to GGI's Impact Fellowship program, you can access our application link here.


 

References:


2.     Mobile Operating System Market Share India. (N.d.). Retrieved From https://gs.statcounter.com/

 

Bibliography :

 





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