Fair-trade regulator fines Google Rs 936 crore for Play Store billing practices
The Competition Commission of India has fined Google for the second time in a week for abusing its dominant market position. The antitrust regulator has imposed a penalty of Rs 936.44 crore on Google for its app store billing policies. The commission had fined the internet giant Rs 1,337.76 crore last week for abuse of its dominant position in multiple markets of the Android ecosystem. The company must modify its behaviour within three months, the regulator said.
Why it’s important: The fair-trade regulator has asked Google to follow a non-discriminatory policy against other apps that allow payments via UPI. Both the orders are sure to be challenged in court and could determine what constitutes abuse of dominant position in the digital space.
Need to balance innovation and fair play, says CCI chairman
Ashok Kumar Gupta, outgoing chairman of the Competition Commission of India, said that the regulator wants to ensure every player gets an equal and fair chance to succeed in its market segment while ensuring that it doesn’t use the network effect to push smaller players out of markets. The new draft competition legislation, being reviewed by a parliamentary panel, will provide greater certainty to new-age businesses, he said in an interview.
Why it’s important: The antitrust regulator seems determined to stop tech giants from using their ecosystem to stifle competition through a network effect. The proposed new law could give it more teeth to do that.
Walmart looks to raise $ 3 billion in funding for Flipkart to expand business
Flipkart, the e-commerce platform controlled by Walmart, is considering raising $ 2-3 billion at a valuation of more than $ 40 billion to expand its product range in India and challenge rivals. Flipkart last raised around $ 3.6 billion in July last year. Most of this capital has been deployed, and about $ 700-800 million is left. Flipkart is currently valued at over $ 40 billion and may dilute around 7 percent stake to raise as much as $ 3 billion.
Why it’s important: The competition among digital marketplaces is heating up in India. The new funding will help Flipkart o have a war chest to take on rivals such as Amazon India, Jio Mart and Tata Neu.
Reserve Bank infuses massive liquidity into banking system, largest since April 2019
The Reserve Bank of India on October 21 injected the largest amount of funds into the banking system in three and a half years. The central bank has injected liquidity worth Rs 72,860.70 crore, the highest since April 30, 2019. Three days later, on October 24, the central bank injected Rs 62,835.70 crore, RBI data showed. The abrupt tightening of liquidity conditions is attributed to outflows due to GST payments and higher currency in circulation during the festive season.
Why it’s important: The Reserve Bank’s move indicates surplus cash with banks is drying up at a faster pace. An injection of funds implies tight liquidity in the banking system.
Rishi Sunak may consider ironing out kinks in proposed trade deal with India
Rishi Sunak’s appointment as the Prime Minister of the UK may help smooth irritants in the proposed India-UK trade pact that was earlier expected to be signed during Diwali in the presence of Prime Minister Narendra Modi in London. Sunak’s elevation has rekindled hopes of signing the trade deal in the near future.
Why it’s important: Unlike some of his colleagues in the British cabinet, Sunak is known to have a pragmatic approach to pushing the UK economy, which is facing significant headwinds. A trade deal with India is expected to help both nations.
DTH TV service providers face government audit over license fee dispute
The central government has asked for a special audit of direct-to-home TV service providers on the long-running dispute over license fees. The ministry of information and broadcasting has written to the Comptroller and Auditor General of India for an intensive audit of all DTH service providers going back to their year of inception or grant of license. The move is over suspected discrepancies in revenue calculation by these firms.
Why it’s important: The issue over license fees has been simmering over the years. If the audit finds large discrepancies and suggests penalties, DTH firms could see a significant squeeze on margins.
Government plans incentive scheme for India’s power transmission sector
The central government is considering introducing a production-linked incentive scheme for power transmission and distribution equipment. The development comes against the backdrop of India trying to curb the use of Chinese power equipment, given the cyberattacks on its grid, including from Red Echo, a Chinese state-sponsored group.
Why it’s important: The incentives would form another part of India’s push for greater self-reliance in manufacturing in strategic sectors.
Demand for temporary works jump as orders surge during festive season shopping
Companies hired a record 400,000 gig and temporary workers to serve festival shopping demand, a staffing industry body said, as consumers enjoying the first Diwali without pandemic curbs in three years increased spending Hiring for last-mile deliveries was led by logistics, e-commerce, and food tech platforms, including last-minute hirings.
Why it’s important: the increase in hiring will taper once the festive season demand gets over. Gig workers will have to find ways to live with the surge and ebb in demand for their services.
CAG to start comprehensive audit of the country’s health sector
The Comptroller and Auditor General of India (CAG) is in the process of conducting a comprehensive audit of the country’s health sector. It is adopting an approach different from its earlier exercises, whose remit was relatively narrow. Earlier, state-level auditors general would choose a subject such as health management, procurement, or vacancies, and audit specific aspects of that. That is set to change.
Why it’s important: The covid pandemic has underlined the importance of robust health care facilities across the country. An audit of government facilities will help in addressing the shortcoming in the public healthcare system.
Banks to find it tougher to use regulatory arbitrage as RBI sharpens scrutiny
Commercial banks will soon find it a lot tougher to take advantage of differences in laws and rules to make money from businesses they cannot do directly, a practice that is known as regulatory arbitrage. After audits and inspections for 2021-22, the Reserve Bank has questioned several private banks on the use of their non-bank arms to fund promoters, finance land purchase, lend against stocks, and give loans without end-use specification, transactions they could not have carried out on the books due to current rules.
Why it’s important: Banks have been asked to scale down such exposures. The central bank is concerned if a non-banking exposure comes under pressure, the shock could be transmitted to the parent bank. It would like to prevent such situations.
