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NPCI’s marketshare capping on UPI payment platforms is a shot across the bows of Big-Tech which has cross-subsidised and (ab)used consumer data into market dominance.
The move will create precedent that will have far-reaching global impact.
Thread. https://www.livemint.com/industry/banking/npci-to-cap-transaction-volumes-of-upi-players-11604591378727.html
The move will create precedent that will have far-reaching global impact.
Thread. https://www.livemint.com/industry/banking/npci-to-cap-transaction-volumes-of-upi-players-11604591378727.html
2/n While the merits and demerits of a 30% marketshare limit can be debated, it’s clear that Society and regulators have begun to think through the mechanics of limiting Platform Power.
Note: NPCI is not-for-profit entity run by consortium of Indian banks
Note: NPCI is not-for-profit entity run by consortium of Indian banks
3/n It is a tough task.
How do you restrain platforms that are essentially self-propagating algorithms that constantly learn new ways to exploit our biases, and create monopolies.
We idolise VCs who propound monopolies. Zero to One!
How do you restrain platforms that are essentially self-propagating algorithms that constantly learn new ways to exploit our biases, and create monopolies.
We idolise VCs who propound monopolies. Zero to One!
4/n Segment marketshare limitation is a crude but EFFECTIVE way to start.
These Big-Tech firms blur market segment boundaries and continuously redefine their markets.
Eg Google has over 95% of the search market but chooses to position itself as a minor player...
These Big-Tech firms blur market segment boundaries and continuously redefine their markets.
Eg Google has over 95% of the search market but chooses to position itself as a minor player...
5/n ....in the multi-trillion dollar media business.
The rumblings in US, Australia, Europe have begun. https://www.vox.com/recode/2020/10/6/21505027/congress-big-tech-antitrust-report-facebook-google-amazon-apple-mark-zuckerberg-jeff-bezos-tim-cook
The rumblings in US, Australia, Europe have begun. https://www.vox.com/recode/2020/10/6/21505027/congress-big-tech-antitrust-report-facebook-google-amazon-apple-mark-zuckerberg-jeff-bezos-tim-cook
6/n Even in China, where platforms thrive with blessings of the State, Alipay’s IPO imbroglio and new fintech regulation (forcing aggregators to have skin in the game) is a signal that Big Tech market power has to be restrained at any cost. https://www.bloomberg.com/news/articles/2020-11-03/ant-group-says-hong-kong-ipo-also-suspended
7/n Two challenges exist.
ONE: The straightforward and simple abuse of market power.
We’ve seen that for generations — from railroads to oil. Monopolies, cartelisation, friendly regulations. Every trick in the book being used by clever businessmen to find profits and moats.
ONE: The straightforward and simple abuse of market power.
We’ve seen that for generations — from railroads to oil. Monopolies, cartelisation, friendly regulations. Every trick in the book being used by clever businessmen to find profits and moats.
8/n Technology has just made the task difficult. Regulators have to keep a step ahead of new emergent technology and the resultant disruptive business models they spawn.
Regulation has always lagged, but the rapid scaling of these tech firms has made this lag lethal.
Regulation has always lagged, but the rapid scaling of these tech firms has made this lag lethal.
9/n At what point does a Big-tech platform crossover from bringing efficiencies to a market and starts hurting both consumers and society?
Should you split firms up, or force algorithms to be fair?
Is it really possible to deeply regulate an algorithm?
Should you split firms up, or force algorithms to be fair?
Is it really possible to deeply regulate an algorithm?
10/n TWO: This is more sinister - the abuse of social power.
The power to perpetuate ideas, to change minds, to push our minor differences in opinions to brutal and life-threatening extremes.
The power to perpetuate ideas, to change minds, to push our minor differences in opinions to brutal and life-threatening extremes.
11/n How do you limit marketshare there?
How do I limit HATE?
How do we stop turning human against human?
Where does "Freedom of Expression" crossover and become a weapon?
How do I limit HATE?
How do we stop turning human against human?
Where does "Freedom of Expression" crossover and become a weapon?
12/12 The battle between Society and the multi-trillion Big-tech firms is taking a crucial turn.
This will force many to choose sides. 2021 may well be the defining year.
A longer read here: https://www.foundingfuel.com/article/making-sense-of-the-new-capitalists/
This will force many to choose sides. 2021 may well be the defining year.
A longer read here: https://www.foundingfuel.com/article/making-sense-of-the-new-capitalists/
+ For folks keen on digging deeper (and/or argue for unbridled capitalism
) - here is the full text of the recommendations of the Antitrust committee.
Investigation of Competition in Digital Markets.
https://judiciary.house.gov/uploadedfiles/competition_in_digital_markets.pdf
) - here is the full text of the recommendations of the Antitrust committee.Investigation of Competition in Digital Markets.
https://judiciary.house.gov/uploadedfiles/competition_in_digital_markets.pdf
+ The main thrust of the report:
1. Prohibit dominant platforms from adjacent lines of business (cross subsidisation)
2. No self-preferencing or discrimination. (don't compete with your suppliers)
3. Interoperability (lower exit barriers for consumers)
4. Prevent Data abuse
1. Prohibit dominant platforms from adjacent lines of business (cross subsidisation)
2. No self-preferencing or discrimination. (don't compete with your suppliers)
3. Interoperability (lower exit barriers for consumers)
4. Prevent Data abuse
