Four Things Ravi Shankar Prasad Must Do About Facebook And Other Tech Biggies Beyond Empty Bluster

When it comes to making empty threats, India should be world champ. Yesterday (21 March), Law Minister Ravi Shankar Prasad was all bluster about Facebook and its data leaks, some of which could have been used to influence voters.

Last week, The New York Times and The Observer reported that Cambridge Analytica, a data firm founded by Steve Bannon and Robert Mercer, may have used Facebook profiles to target voters in the Donald Trump presidential campaign. In India, Cambridge’s Indian partner, Ovelina Business Intelligence, is alleged to have helped the Bharatiya Janata Party (BJP) in the national elections and earlier in the Bihar assembly elections of 2010 – something that the party has denied vehemently.

This is where Prasad’s bluster came in. The Times of India quotes him thus: “Any attempt, covert or overt, by social media, including Facebook, of trying to influence India's electoral process through undesirable means will neither be appreciated nor be tolerated. If need be, stringent action will be taken.”

He went on with more threats: “Mr Mark Zuckerberg you better note the observation of the IT Minister of India. We welcome the FB profile in India, but if any data theft of Indians is done through the collusion of FB system, it shall not be tolerated. We have got stringent powers in the IT Act, we shall use it, including summoning you in India.”

Those who can, do; those who can’t, threaten. The real issue here is not whether India has the power to summon Zuckerberg or act against Facebook, but whether it has the gumption to take on the GAFA quadropoly – Google, Amazon, Facebook and Apple – and prevent them from owning all Indian data. We are outraging over Aadhaar and its threats to privacy, when the GAFA foursome knows the colour of our underpants.

Before threatening Facebook about action, the first thing Prasad should do is make a law forcing all global giants to hold all their Indian data in India, and subject themselves to the jurisdiction of Indian courts. Data ownership is one thing in which India has every right to assert its national rights, but right now the major US-based tech platforms – and, increasingly the Chinese platforms – all our consumer data. Most of this is accessible to the US government, and not India. Chinese smartphone and laptop companies, apart from e-commerce and payments companies in which Chinese firms have large investments (Paytm, Big Basket), probably own more Indian data than Aadhaar.

If Prasad wants to live up to his threats, he must do four things.

First, as already stated, all data collected from Indian customers and users must rest on servers located in India, and not be accessible to any outside agencies from any other country. This will force the tech giants to invest in India and create jobs. Make in India may or may not work but Serve in India from India will certainly work.

Second, once these servers and data are relocated here, these companies will need to create India-registered corporate entities, which will automatically be taxable in India on their profits here. Even if they don’t make profits, their investments will create jobs here. This would be far easier to do than to try and tax businesses with a “significant economic presence” in India (but no subsidiary), as the finance minister proposed in his last budget.

Third, the government must – either directly or in partnership with private companies – create India-specific competitors to Google, Facebook, WhatsApp and Amazon. The technology isn’t rocket science, and once created, it can be given critical mass by insisting that all government and public sector employees – at Centre, state and municipal bodies – should use them for their official and private communications. Reaching 100 million users will be a cakewalk, considering how easily Aadhaar crossed the one billion mark in less than a decade. This will force the global tech giants to invest more in India. The Aadhaar data, for example, can easily be used as a base for multi-language email, maps and other services. Instead of Gmail, an address ending with Aadhaar.com should become the norm in India. Payments can also be built into this system, just as the WhatsApp messaging system is going to become a payments platform shortly. It should be done in Indian languages, and not just English.

Fourth, India must back big India-owned e-commerce and mobility players to fight Amazon and Uber. For example, IRCTC – the railway ticketing giant – can first be merged with other e-commerce sites (MakeMyTrip, for example), with government owning 51 per cent or more by virtue of the railway ticketing monopoly it confers on it. At some point, it could decide to back a Flipkart or some other e-commerce site funded by local players – maybe an Ambani with $2 billion to invest – in which it could take up equity.

There is also no reason why mobility should not be part of an India-wide investment. If app-based taxi and auto-hailing services are going to be the norm, the government should indirectly back an Ola, or better still, create a more robust public platform where taxi- and private-car owners can buy a stake and make their vehicles available for hire. Creating such an India-wide app and making it mandatory for government servants to use only these services (instead of claiming taxi reimbursements) will make the service gain critical mass quickly. Tech is not the challenge; critical user mass is.

In giving local tech platforms a leg up, there is no better model to follow than China. Today, if the GAFA quadropoly – Google, Amazon, Facebook and Apple – have any rivals, they are all in China, and going by the acronym BAT – Baidu, Alibaba and Tencent. They dominate the e-commerce, payments and social media spaces.

Mr Ravi Shankar Prasad, if you really want to think about protecting India’s interest, it is more important to put your money where your mouth is. And it isn’t even a great deal of money. If you do this, you won’t need to summon Zuckerberg; he will be camping at your door begging for an audience.

India has the chance to create its own Zuckerberg; right now, we are all ‘Suckerbergs’.

Also Read: GAFA Monopoly: Why Google, Amazon, Facebook And Apple May Need Breaking Up