{"id":396649,"date":"2019-02-21T07:14:59","date_gmt":"2019-02-21T06:14:59","guid":{"rendered":"http:\/\/rinf.com\/alt-news\/newswire\/when-india-tries-to-regulate-amazon-us-media-qualms-about-monopoly-disappear\/"},"modified":"2019-02-21T07:14:59","modified_gmt":"2019-02-21T06:14:59","slug":"when-india-tries-to-regulate-amazon-us-media-qualms-about-monopoly-disappear","status":"publish","type":"post","link":"http:\/\/rinf.com\/alt-news\/newswire\/when-india-tries-to-regulate-amazon-us-media-qualms-about-monopoly-disappear\/","title":{"rendered":"When India Tries to Regulate Amazon, US Media Qualms About Monopoly Disappear"},"content":{"rendered":"

\u00a0<\/b><\/p>\n

\"NYT:<\/p>\n

The “breakthrough idea” heralded by the New York Times<\/strong> (9\/7\/18<\/a>)–that antitrust should be about power, not just prices–was nowhere to be seen when US media reported on India’s attempt to regulate Amazon<\/strong>.<\/em><\/p>\n<\/div>\n

Last September, the New York Times<\/b> (9\/7\/18<\/a>) ran a remarkable profile on a law student who had, as the Times<\/b> characterized it, \u201crocked the antitrust establishment\u201d with a \u201crunaway bestseller\u201d essay in the Yale Law Journal<\/b> (1\/17<\/a>). In her manuscript, Lina Khan called into question the prevailing approach to regulating retail monopolies, focusing on a potential offender that stands heads above the rest: Amazon.com, Inc<\/b>.<\/p>\n

Khan\u2019s work and criticism of Amazon<\/b> have been covered by corporate acolytes like CNBC<\/b> (4\/3\/18<\/a>), Bloomberg<\/b> (7\/9\/18<\/a>) and Forbes<\/b> (1\/28\/19<\/a>). Now an academic fellow at Columbia Law School, she argues that the current paradigm of gauging anticompetitive practices in the retail sector according to consumer welfare is \u201cunequipped to capture the architecture of market power in the modern economy.\u201d<\/p>\n

\u201cBecause online platforms serve as critical intermediaries,\u201d she writes, \u201cintegrating across business lines positions these platforms to control the essential infrastructure on which their rivals depend.\u201d<\/p>\n

Khan\u2019s conclusion\u2014that this new kind of monopoly calls for either aggressive regulation of marketplace competition, or classifying e-commerce giants as utilities and establishing checks on their power\u2014prompted the Times<\/b>\u2019 celebrity treatment of her as a member of an emerging class of \u201cantitrust foot soldiers,\u201d fighting against a corporate titan that, in the paper\u2019s own estimation, \u201coverwhelmingly dominates online commerce.\u201d<\/p>\n

Now, as India enforces new regulations in an attempt to check the monopolistic reach of Amazon<\/b> and other foreign online merchants there, the New York Times<\/b>, along with most corporate media voices, sings a different tune. Having forgotten Khan\u2019s argument that consumer welfare is a poor rubric for modern anticompetitive practices in an online marketplace, the Times<\/b> (1\/30\/19<\/a>) baldly stated that \u201cAmazon<\/b> Users in India Will Get Less Choice and Pay More Under New Selling Rules.\u201d<\/p>\n

Other media rang similar alarm bells. The Wall Street Journal<\/b> (2\/1\/19<\/a>) reported that products have been \u201cyanked\u201d from Amazon<\/b> in India, which has plunged the market \u201cinto chaos,\u201d according to Bloomberg<\/b> (2\/1\/19<\/a>). CNN<\/b> (2\/1\/19<\/a>) and CNBC<\/b> (2\/1\/19<\/a>) described the \u201chuge threat\u201d India now poses to Amazon<\/b> and its rivals like Walmart<\/b>, while The Verge<\/b> (2\/1\/19<\/a>) told readers that these corporate victims have already been \u201chit hard\u201d by the new restrictions. Reuters<\/b> (1\/31\/19<\/a>) went so far as to portray India as a kind of giant spider that has \u201ccaught\u201d unsuspecting flies like Amazon<\/b> and Walmart<\/b> in its vicious \u201cweb.\u201d<\/p>\n

So while commentators are at least beginning to worry about Amazon<\/b>\u2019s emerging monopoly<\/a> here at home, this concern does not extend to countries like India, exposing the underlying neocolonial disposition of corporate media: Business practices that may be intolerable for the mother country should nonetheless be encouraged at the colonial periphery.<\/p>\n

India\u2019s complex investment history<\/b><\/h3>\n
\"NYT:<\/p>\n

The New York Times<\/strong> (1\/30\/19<\/a>) leaves no doubt as to how it wants you to feel about India trying to regulate Amazon<\/strong>.<\/em><\/p>\n<\/div>\n

At issue is a modification of India\u2019s Foreign Direct Investment (FDI) policy for e-commerce announced in December<\/a>, which took effect on February 1. While allowing for 100 percent FDI in the marketplace-based model of e-commerce, in which the foreign entity merely acts as a facilitator between sellers and buyers (think eBay<\/b>), India banned FDI in the inventory-based model, wherein the foreign entity sells its own products directly to consumers (think Walmart.com<\/b>).<\/p>\n

Because Amazon<\/b> uses its hegemony to manipulate the market<\/a> in favor of products in which it has a vested interest\u2014the \u201carchitecture of market power\u201d about which Khan cautioned\u2014the Indian government, in response to complaints from industry associations<\/a>, clarified its rules to prohibit the sale of products when the owner of the marketplace had \u201cequity participation\u201d or \u201ccontrol on its inventory.\u201d The updated rules also require foreign entities like Amazon<\/b> to provide their services \u201cto vendors on the platform at arm\u2019s length and in a fair and non-discriminatory manner.\u201d<\/p>\n

These events are just the latest chapter in a tumultuous history of regulating FDI since India\u2019s independence. In 1947, after wrenching itself<\/a> from nearly 200 years of British colonial subjugation, India had to balance its desperate need for capital investment in development with a well-earned skepticism about the intentions of foreign business.<\/p>\n

The new indigenous government nationalized industries deemed critical to India\u2019s strategic interests, such as the energy and military sectors. Niti Bhasin of the Delhi School of Economics wrote<\/a> that \u201cthe prevailing mood in independent India was one of preserving and consolidating freedom, and not permitting once again any sort of foreign domination, political or economic.\u201d<\/p>\n

Over subsequent decades, India\u2019s regulation of FDI in its economy fluctuated. Foreign participation was largely encouraged across economic sectors, though the government informally prodded companies to include local equity in their investments. In the late 1960s and early \u201970s, however, India codified these equity requirements and began to crack down on monopolistic behavior, leading to an exodus of large multinational corporations from the Indian marketplace\u2014including, famously, the departure of Coca-Cola in 1977<\/a>.<\/p>\n

These strict regulations on FDI were gradually relaxed over time until the Indian economy underwent a radical transformation in the 1990s, when \u201cpressure of the IMF and World Bank to liberalize the Indian economy forced the government to accelerate the pace of liberalization,\u201d according<\/a> to Amar K.J.R. Nayak of the Xavier Institute of Management, Bhubaneswar. Coca-Cola, which re-entered India in 1993, now controls the largest share<\/a> of the soft drink market there, including ownership of Thums Up<\/a>, the indigenous cola brand that took Coke\u2019s place 40 years ago when the US-based soda abandoned ship.<\/p>\n

Hardly an anti-capitalist, Narendra Modi, the current prime minister of India, could be seen as the culmination of this more recent history. After coming to power in 2014 with the promise of continued economic liberalization, the Modi government last January instituted automatic approval for 100 percent FDI in aviation and construction<\/a>, as well as single-brand retail<\/a>, and is looking to do the same for the insurance industry<\/a>.<\/p>\n

Although understanding India\u2019s unique historical struggle to secure its political and economic sovereignty is essential to comprehending the dynamics of the present standoff, corporate media chose instead to paint a picture for readers using more familiar\u2014but fundamentally erroneous\u2014analogies to a Western context.<\/p>\n

Equivocating on \u2018brick and mortar\u2019<\/b><\/h3>\n

Whenever abuses by monopolies become so egregious as to provoke popular resistance, corporate media\u2019s shallow coverage tends to cast aside the real story in favor of a staged battle royale between moguls (FAIR.org<\/b>, 8\/18\/17<\/a>). A similar trend emerged once again as India\u2019s position on FDI in e-commerce evolved.<\/p>\n

Rather than forefront the concerns of India\u2019s myriad independent retailers about the potentially devastating effect of foreign-controlled e-commerce on their livelihoods, Reuters<\/b> (1\/24\/19<\/a>) led the story as a geopolitical \u201ctussle,\u201d \u201cthe latest in a number of US protests over Indian government policies which impact American companies.\u201d Fortune <\/b>(1\/5\/19<\/a>) spun a heartwarming tale of erstwhile rivals \u201cteaming up\u201d to fight the uppity Indian government. \u201cIt isn\u2019t all bad for Amazon<\/b> and Walmart<\/b>,\u201d they reassured readers, as there may yet be hope for finding loopholes in the new restrictions.<\/p>\n

More common was an effort to reduce the \u201ctussle\u201d to a competition between US billionaires Jeff Bezos and the Walton family, on the one hand, and Indian billionaires like Mukesh Ambani, owner of Mumbai-based Reliance Industries, on the other. Bloomberg<\/b> (7\/5\/18<\/a>), the Telegraph<\/b> (1\/18\/19<\/a>) and Quartz<\/b> (1\/29\/19<\/a>) each ran profiles on Ambani in the context of India\u2019s new FDI rules, with the latter extolling that \u201cReliance could not have found a better time to launch its e-commerce business.\u201d<\/p>\n

The New York Times<\/b> (4\/7\/16<\/a>) has explained to its readers that, \u201cas in the United States, in India brick-and-mortar retailers have expressed alarm at the growth of e-commerce.\u201d While for an American audience, this depiction may conjure up memories of Amazon<\/b> winning out<\/a> over legacy retail corporations like Barnes & Noble<\/b>, in India nothing could be further from reality.<\/p>\n

According<\/a> to the Indian government\u2019s Department of Commerce, in 2017 e-commerce represented 3 percent of India\u2019s overall retail economy, while \u201corganized retail,\u201d its term for large firms, including corporate brick-and-mortar establishments akin to Barnes and Noble<\/b>, took up another 9 percent. In other words, a whopping 88 percent of retail commerce in India is conducted in so-called \u201cmom and pop\u201d stores, the likes of which are little more than a distant memory in the United States.<\/p>\n

The \u201cunorganized\u201d or \u201ctraditional\u201d retail sector in India is defined<\/a> as \u201cunincorporated private enterprises owned by individuals or households…with less than ten total workers.\u201d By comparison, according to the latest available US Census data<\/a>, American firms with fewer than ten workers amount to just 10 percent of total retail receipts, almost the exact opposite of India.<\/p>\n

While Mukesh Ambani certainly has a large stake in the future of Indian e-commerce, his business dwells in that meager 12 percent slice of India\u2019s overall retail marketplace. Meanwhile, tens of millions of working Indians see their livelihoods hanging in the balance.<\/p>\n

Recalling the decimation<\/a> of American mom-and-pop shops would arouse sympathy among a US audience but, sadly, erasing the plight of ordinary Indians isn\u2019t the only diversionary tactic that corporate media have employed to spin this story.<\/p>\n

Universalizing Trumpism<\/b><\/h3>\n
\"Narendra<\/p>\n

Narendra Modi (cc photo: World Economic Forum\/Norbert Schiller)<\/em><\/p>\n<\/div>\n

Narendra Modi, who is pushing forward with regulations on foreign e-commerce, has been the subject of serious criticism, both within his country and abroad. Many hold him at least indirectly responsible for pogroms that killed upwards of 2,000 people<\/a> while he was chief minister of the Indian state of Gujarat, and his tenure as PM has also seen considerable controversy.<\/p>\n

Despite hailing from western India, Modi symbolically contested for his seat<\/a> in parliament from the ancient holy city of Varanasi, sweeping his Bharatiya Janata Party (Indian People\u2019s Party) into control on a platform of Hindutva nationalism, atop what the local press coined as a \u201cModi wave.\u201d<\/a> Since the 2014 national election, lynchings by right-wing \u201ccow vigilantes\u201d have increased<\/a>, while some journalists and scholars have warned of new threats<\/a> to freedom of speech there.<\/p>\n

At the time of his ascension, Modi was described<\/a> as \u201ca corporate candidate\u201d by Arundhati Roy, who saw the election as a contest deciding \u201cwhich corporation will come to power.\u201d Vijay Prashad, a historian at American University of Beirut, called Modi\u2019s candidacy the \u201cworst of all worlds\u201d for exploiting sectarianism and anti-incumbency to advance a neoliberal economic agenda that would make even the Clintons blush (Common Dreams, <\/b>5\/16\/14<\/a>).<\/p>\n

Grasping as usual for the simplest possible narrative, however, Western corporate media have been content to style Modi as the Indian counterpart to a more fashionable villain, US President Donald Trump. The New York Times <\/b>(10\/16\/16<\/a>), New Yorker<\/b> (1\/18\/17<\/a>) and Atlantic<\/b> (12\/26\/18<\/a>), for example, have linked Modi and Trump as fellow \u201cstrong men\u201d who employ \u201canti-bureaucracy and country-first language\u201d to rile up their constituencies.<\/p>\n

Albeit accurate with regard to certain rhetorical strategies, it is hard to see what relevance Trump\u2019s political likeness to Modi bears on the Indian president\u2019s position toward Amazon<\/b>\u2019s potential takeover of his country\u2019s online marketplace. After all, as Reuters<\/b> reported, Trump\u2019s State Department and Office of the United States Trade Representative coordinated a lobbying effort against<\/i> the new rules.<\/p>\n

In other words, Modi\u2019s decision to restrict FDI in inventory-based e-commerce, despite his more general openness to economic liberalization, and Trump\u2019s support of US firms, despite his earlier threats to trust-bust Amazon<\/b><\/a>, together represent a break from the very narratives corporate media are nevertheless injecting into the story.<\/p>\n

That conceptual incongruity did not stop Bloomberg <\/b>(2\/4\/19<\/a>) from analyzing the matter in terms of Trumpism. \u201cIn India, populist fervor and fear is also working against Amazon<\/b>,\u201d they wrote, as Modi-qua-Trump \u201cseems bent on appeasing millions of mom-and-pop store owners who make up a powerful voting block.\u201d Euronews<\/b> (1\/25\/19<\/a>) similarly used Modi\u2019s association with right-wing groups in a veiled attempt to discredit India\u2019s resistance to Western economic imperialism.<\/p>\n

With Amazon<\/b> haunted by the threat of a leader \u201cbent on appeasing\u201d the vast majority of his country\u2019s retail businesses in the face of potential corporate annihilation, it is little surprise that Jeff Bezos\u2019 personal newspaper syndicated Bloomberg<\/b>\u2019s story (Washington Post<\/b>, 2\/4\/19<\/a>). As Adam Johnson documented, more broadly, US outlets lap up opportunities to render Bezos and his company in a flattering light (FAIR.org<\/b>, 7\/28\/17<\/a>). In this case, the alignment of Modi with Trump is the spoonful of sugar that helps corporate media\u2019s Amazon<\/b> apologetics go down.<\/p>\n

Neocolonial legacies<\/b><\/h3>\n

As novel as Lina Khan\u2019s approach to e-commerce monopolies may be, the phenomenon of US corporations taking control of \u201cthe essential infrastructure on which their rivals depend\u201d is certainly not new, and it is a story with which India is all too familiar.<\/p>\n

Throughout the 1950s and \u201960s, Indian agriculture underwent a radical transformation as part of what is popularly called \u201cThe Green Revolution<\/a>,\u201d led by the US government, the World Bank, and the Ford and Rockefeller foundations. While the figurehead of the project, Norman Borlaug, was eventually awarded the Nobel Peace Prize<\/a> for his \u201cmiracle seeds\u201d in 1970, not everyone views the aftermath of revolutionizing India\u2019s largest economic sector as a miracle.<\/p>\n

The environmentalist and scholar Vandana Shiva argues<\/a> that the program hoisted onto India shifted its agricultural system from \u201can indigenous and ecological model to an exogenous and high-input one,\u201d by introducing crop varieties and methods developed in partnership with US corporations that relied on pesticides and fertilizers produced by those same corporations to thrive. In Shiva\u2019s view, this new dynamic \u201cbrought violence instead of peace, dependence instead of self-reliance and autonomy.\u201d<\/p>\n

Writing in 1991, at the dawn of India\u2019s rapid economic liberalization, Shiva warned of further corporate encroachment into its indigenous industries. \u201cWe can draw some lessons from history about how technological change initiated by a special interest brings development to that interest group while creating underdevelopment for others,\u201d she reflected.<\/p>\n

Modi likely has history on his mind as he assesses another potential foreign-sponsored revolution of his country\u2019s economy. As Shiva foretold, India\u2019s agricultural industry is still plagued by political and economic strife and, notwithstanding his \u201cpopulism,\u201d ongoing discontent among farmers may well be Modi\u2019s political undoing<\/a> in the upcoming national election this year.<\/p>\n

United with Trump against sovereignty
\n<\/b><\/p>\n

Khan, acting in the \u201cantitrust foot soldier\u201d capacity acclaimed by the New York Times<\/b>, weighed in on their coverage of the new e-commerce FDI rules taking force in India. \u201cInterestingly, @nytimes<\/b> describes India\u2019s rule as \u2018protectionism,\u2019\u201d she wrote on Twitter<\/b><\/a>, highlighting corporate media\u2019s tendency to lump Modi in with universal Trumpism. \u201cBut this sort of structural separation has been a key principle in US competition policy. For example, Congress in 1906 passed a law prohibiting railroads from transporting goods they owned,\u201d she noted.<\/p>\n

Despite their openness to a new conceptualization of antitrust that is responsive to the dynamics of modern industry in the United States, corporate media are aghast at the implementation of such an approach to forestall US monopolies in another country like India. And despite adopting a banner of vanguard resistance against Trumpism, corporate media position themselves alongside Trump in his effort to undermine India\u2019s economic sovereignty.<\/p>\n

The only way to explain these inconsistencies is to acknowledge the latent neocolonial attitude that governs corporate media\u2019s treatment of familiar issues whenever they cross the US border. The potential consumers in corporate media understand the damage already wrought by retail monopolies here, as well as the risks posed by Amazon<\/b>\u2019s dominance of the online market. Nevertheless, as potential shareholders, they are eager to see Amazon<\/b> tap that heretofore unexploited 88 percent of India\u2019s retail economy (CNBC<\/b>, 1\/31\/19<\/a>).<\/p>\n

What corporate media find at least questionable for the homeland, they nonetheless encourage in the colonial periphery, because Indian wealth is meant to be extracted by the West.<\/p>\n

No one yet knows what the future will hold for India\u2019s online retail economy, or the US corporations salivating at the chance to take a bite out of it, but it should go without saying that this future is India\u2019s to decide for itself. US media need to quit the role of corporate cheerleader for once and leave Indians to it.<\/p>\n

 <\/p>\n