At the outset, the most important thing to remember is that both India and the US have slightly different objectives. The US is more concerned with controlling and limiting the power of big tech companies—which, according to the view of some lawmakers, have become too powerful, monopolistic, and thwart innovation and competition in their sectors. As far as India is concerned, it’s less about whether Amazon is a monopoly and more about ensuring a level playing field to protect local small businesses. 

One could argue that these objectives are somewhat aligned—part of the US’ motivation is also to protect small local businesses, who are allegedly getting trampled over by Amazon. Part of India’s purpose is to also control and limit the power of Amazon. 

This is where we get into the first aspect—applicability of the law. 

Applicability: Who does this affect?

This is a fairly simple construct. A new law or a rule is written. Who is it meant for? 

This is a tricky question. The idea is that laws that are created to control or restrict something, especially in business, need to be as specific as possible, but can’t be too specific either. This is because a law or a regulation is created with an intended purpose and consequence. If it’s too broad, it not just affects the entity you are attempting to control, but also has collateral consequences and impacts others whom you had no intention of controlling. On the other hand, if it’s too specific, you end up with a situation where the regulation becomes obsolete quickly—it cannot be used in the future or it can be overruled by a legal challenge. 

The idea is to find a middle-ground.

Let’s look at what’s happening here. 

Take the United States. It created not one but five bills, all aimed at controlling Big Tech. For the purpose of simplicity, let’s examine the one that will affect Amazon. It’s a bill called the ‘Ending Platform Monopolies Act’. 

We’ll get into the details of what’s in the bill soon, but for now, let’s just focus on which entities this bill affects. The bill says that it applies to companies that meet any of three conditions: 

(I) Has at least 50 million monthly active users

(II) Has at least 100,000 monthly active business users on the platform;

(ii) Has net annual sales or a market capitalisation greater than $600 billion. 

Very, very few companies fall into this category. This law has been specifically written to target specific companies, including Amazon. 

Could one challenge this and claim that this law is too specific? 

Well, according to one person, it seems to have been done smartly.

On the other hand, India did no such thing. 

India’s new e-commerce rules apply to everyone. 

Yes. It applies to “all models of e-commerce”. Marketplace. Inventory. Single brand. Multi-Brand. One channel. Multi-channel. Everyone. If you are a tiny bakery in Bengaluru’s Indiranagar, and you have a Shopify website where someone can place an order, congratulations, India’s new e-commerce rules apply to you. Thanks to this definition, the laws even apply to companies in adjacent businesses like Swiggy and Zomato, which are involved in food delivery.  

So, while the US decided on a scalpel, India took out a hammer. 

This is not to suggest that the US approach is better than the India approach because we don’t really know. Blunt laws have advantages that sharp laws don’t, as we will soon find out. 

Fine, now we know about who these laws apply to, but what do they specifically say companies like Amazon can or cannot do? 

Restrictions: What can’t you do?

The purpose of the law is to stop someone from doing something. Here’s where things get interesting. 

India’s proposed e-commerce rules have a long list of restrictions on e-commerce entities. The rules categorically state that e-commerce companies cannot:
 

1. Adopt any unfair trade practice. 
2. Allow any display or promotion of misleading advertisement on its platform or otherwise.
3. Impose cancellation charges on consumers cancelling after confirming purchase unless similar charges are also borne by the e- commerce entity. 
4. Indulge in mis-selling of goods or services offered on its platform.
5. Organise a flash sale of goods or services offered on its platform.
6. Manipulate the price of the goods or services offered on its platform to gain unreasonable profit by imposing on consumers any unjustified price. 
7. Mislead users by manipulating search results.
8. Permit usage of the name or brand associated with that of the marketplace e-commerce entity for promotion or offer for sale of goods or services on its platform in a manner so as to suggest that such goods or services are associated with the marketplace e-commerce entity.  
9. Use information collected by marketplace e-commerce entities, for sale of goods bearing a brand or name which is common with that of the marketplace e-commerce.

There’s more. There are restrictions on marketplace e-commerce entities (companies like Amazon) from using data from sellers on its platform. There are restrictions that prohibit logistics service providers from discriminating between sellers. Above all, there are restrictions that prevent associated enterprises of companies like Amazon from being listed as sellers for sale to consumers directly. There are clauses that define in detail what qualifies as an associated enterprise and what doesn’t, either by nature of relationship or by shareholding (5% or 10% shareholding). 

That’s a lot of restrictions with a lot of details about them. 

Remember that this applies to everyone and not just Amazon. Also, I’ve just covered the restrictions. There’s another list of what the rule requires e-commerce companies to do. 

In contrast, here are the restrictions that the US law proposes. It’s quite simple. All it says is that if you are a ‘covered platform’—if this law is applicable to you—it’s unlawful for you to own, control, or have a beneficial interest in a line of business that 

1. Uses the platform for sale or business
2. Offers a product or service that requires the user to access the platform as a condition for access
3. Gives rise to a conflict of interest. 

That’s it!

If this sounds brief and vague, it is! In fact, if you read the bill, the restrictions are covered in about 15 lines. 

There you go. Two bills. Two nations. Two approaches. 

So what does this tell us? 

Essentially, both the United States and India are using the law in different ways to meet their objectives. The United States is employing a targeted approach, using a clear-cut restriction—a ban of a certain type of operation. India, on the other hand, is trying a more broad-based approach, with escalating pin-point conditions that need to be met by everyone.

The United States is using a generic, blunt law applied very specifically to Amazon, and India is using specific rules and conditions applied very generically on the e-commerce sector that are intended to hurt Amazon.

Two nations. Two approaches. 

India’s draft of the new rules goes into all kinds of really specific things. It requires all e-commerce companies to appoint a Chief Compliance Officer. It also wants a nodal contact person who will be responsible for “24X7 coordination with law enforcement agencies and officers''. It also requires the installation of a Resident Grievance Officer, who is responsible to acknowledge any consumer complaint within 48 hours. 

That’s just what the law requires every single e-commerce entity to have on the personnel front. Amazon. Swiggy. That bakery in Indiranagar. 

Then the law gets into the UX design of e-commerce websites. 

If you are an e-commerce company selling goods that aren’t manufactured in India, here’s what the new rules says you need to do (emphasis mine): 

(a) Mention the name and details of any importer from whom it has purchased such goods or services, or who may be a seller on its platform;

(b) Identify goods based on their country of origin, provide a filter mechanism on their e-commerce website and display notification regarding the origin of goods at the pre-purchase stage, at the time of goods being viewed for purchase, suggestions of alternatives to ensure a fair opportunity for domestic goods;
 

(c) Provide ranking for goods and ensure that the ranking parameters do not discriminate against domestic goods and sellers.

On the other hand, the United States is making its law really broad. It’s so broad that it’s open to interpretation by a regulator like the Federal Trade Commission (FTC) and any court in the United States. 

Which brings me to the last part—what are both nations trying to do? And what will happen next? 

I think both India and the US are taking part in an extended negotiating strategy with Amazon. It’s clear that the US bill (which is so broad with so much overreach) isn’t practical enough to actually become a law in its current form. I also think it’s quite unlikely that the Indian government wants to get in the business of drawing UX wireframes for e-commerce companies on Figma. Instead, both India and the US are creating an anchoring effect by taking positions so far out that Amazon may be forced to make some kind of moderate concessions. 

India’s hand is stronger in some ways, but weaker in others. India does not face any political opposition or lobbying against making its draft into a law. In fact, if it wishes, it can bring this into effect overnight. However, the reality is that India is making a law to control the reach and actions of a foreign company, and this gives it less leverage than what the US House of Representatives has on Amazon. 

What India must do though is avoid making the mistakes it has done in the past by creating regulations that are complicated and difficult for even well-meaning actors to follow, while still retaining broad, vague, and frankly arbitrary decision-making on whether to enforce these laws or not. This is exactly what the Licence Raj did—and India needs to be really careful not to tug at that chain here. 

Also, by creating all these complicated requirements around appointment of multiple officers, India is ensuring that only companies like Amazon can comply with these onerous regulations. So, in some ways, India may be inadvertently creating the monopoly the US seeks to stop.

On the other hand, what is the US doing? 

Well, simply put, the US is trying to ensure that at least one of the five bills it has put forward attacking Big Tech companies goes into law. But it’s not the Ending Platform Monopolies Act. It’s another bill, a much tamer one that gives greater budgets to fund antitrust enforcement agencies like the FTC. It’s not a big win, but it’s a win nonetheless, and realistically, I think it’s the only one that will become a law. 

This does not mean that things are safe for Amazon. That’s because the FTC, which investigates big tech companies for antitrust, recently appointed a new Chair. 

Her name is Lina Khan. 

We wrote about her at The Ken in one of our stories. She’s smart. She’s driven. And she’s an expert about Amazon.