Can Meta’s ‘Threads’ break Twitter’s monopoly?
Digital Marketing

Can ‘Threads’ break Twitter’s monopoly?

Dr M Rahman, Senior marketing faculty, Galgotias University

The ‘Threads’ app launched on July 5, 2023 by Meta Platforms Inc., the parent company of Facebook, Instagram, and WhatsApp has created the record of fastest growing consumer app smashing the record of AI tool ChatGPT*. It racked up over 100 million within five days. The new app is available in over 100 countries on Google Android and Apple app stores. However, it is not available in the European Union countries including Germany, Italy, France, and Belgium. (*ChatGPT app took two months to get 100 million sign-ups)

The app is fastly emerging as the first real threat to Twitter, world’s most popular microblogging site with over 400 million active users. Twitter is struggling nowadays to hold its users due to certain user unfriendly policies after being taken over by Elon Musk in Oct 2022. Now, the curiosity is emerging in tech people’s and users’ minds – Can ‘Threads’ break Twitter’s monopoly in future?

Can ‘Threads’ break Twitter’s monopoly?

In the past few years, apps like Mastodon, Koo and Bluesky were launched and positioned as Twitter alternatives. But after creating initial hype, these apps failed to maintain it. However, unlike other apps, Meta’s ‘Threads’ has some strengths that can make it a formidable competitor to Twitter. ‘Threads’ is similar to twitter in terms of general features like post a message, like, share, quote, comment etc. Because of the similarities Twitter has threatened to sue Meta Platforms.

However, there are many aspects that make it different from Twitter. First, Threads has over one billion built-in user-base from Instagram. Users need an Instagram account for Threads, and they can import bio information and followers from their existing Instagram profile. Second, Threads has some features that are better than Twitter (shown in the table). It allows users to write more number of characters (upto 500) and share more items (upto 10 images, videos etc.) and longer videos to non-verified users (upto 5 minutes) in a post.

Can Meta’s ‘Threads’ break Twitter’s monopoly?
The new app also doesn’t charge any amount for a blue tick (verified account). This is contrary to Twitter’s $7.99 a month fee considered as user-unfriendly policy and resulted in protest by many celebrities.

However, Threads currently lacks certain features that are popular and users have been used to on Twitter. The missing features include non-availability of ‘Following page’ list, no embedded codes (it limits the integration of Threads content on external websites), no ‘Hahtags’ and no provision of ‘Account deletion”. The users can deactivate ‘Threads’ account on Instagram. For deletion of the account, they have to delete their Instagram account.

Moreover, Threads app requires access to relatively more user data/information than twitter in mobile before it can be downloaded. This is the reason why Meta didn’t launch the app in the countries of European Union, where strict data protection laws exist. Meta’s other social apps Facebook and Instagram has been criticised for data privacy and security issues in the past.

So, it’s too early to say whether Meta’s Threads will be able to break Twitter’s monopoly. However, Threads has the potential to attract a large number of twitter users looking for fresh air after Elon Musk takeover. And, ultimately end Twitter dominance in the social media space.

Also read ‘Metaverse’ or ‘Metaworse’ for Facebook with over 11,000 Layoffs



Adani Bubble Burst? From Global Rank 3 to 21 in Just Ten Days
Business & Economy

Adani Bubble Burst? From Global Rank 3 to 21 in Just Ten Days

Adani Bubble Burst? From Global Rank 3 to 21 in Just Ten Days

Dr M Rahman, Senior academician, Business Management

Ever since Bloomberg Billionaires Index  declared Indian Billionaire Gautam Adani as the third  richest person in the world in Aug’ 2022, there have been a lot of  discussions among business experts and on social media on whether the billionaire’s rank would be sustainable given a lot of controversies floating around his business empire.

Business experts discussed on the government favor, huge debt of over Rs 2 trillion ($25 billion) on which Adani’s business empire was built, and group companies’ highly inflated stocks that were considered just like a bubble.

Fitch rating’s CreditSight had reported in Aug 2022 that Adani Group is “deeply over leveraged”, and may, “in the worst-case scenario”, spiral into a debt trap and possibly a default. In other words, Adani Group’s debt is unsustainably high against its equity. This report made a small dent in Adani’s stock.

Adani Bubble Burst?

But finally, within six months, the Adani bubble burst after the release of a report ‘Adani Group: How The World’s 3rd Richest Man Is Pulling The Largest Con In Corporate History’ on 24 Jan 2023 by a US based Investment research and short selling firm, Hindenburg Research. The report, prepared after two years investigation, accused the Adani Group of brazen stock manipulation and accounting fraud scheme over the course of decades.

The report brought a Tsunami in the stock market and Adani group companies’ stock price tumbled like a pack of cards wiping out around Rs 9 lakh crores ($108) billion market cap in ten days. In a day alone, shareholders saw their wealth dropped by Rs 1.3 lakh crore to Rs 10.4 lakh crore. As share prices tumbled, Adani fell from global rank 3 to 21 in just ten days as per Bloomberg.

The repercussions of the fall was visible in many areas. The bonds issued by Adani group companies as these dropped to distress levels in global trading, Citi group’s wealth unit announces that it would stop extending loans against Adani shares. S&P lowered the ratings of two Adani group companies to ‘negative’ from ‘stable’.

The Reserve Bank of India (RBI) and Securities and Exchange Board of India (SEBI)  accused of doing favour to Adani group companies have also came into action from the inactive mode. The opposition parties in India is questioning the functioning of government agencies and is demanding a thorough investigation from a Joint Parliamentary committee on Adani group’s businesses.

Looking at the above happenings, in my opinion it would be tough for Adani group to reach its previous position despite strong support from the Indian government. Moreover, it’s future also depends upon the accuracy of the Hindenburg’s report.

What’s your opinion?

External links

https://www.financialexpress.com/industry/gautam-adani-no-longer-among-worlds-top-20-richest-people-as-adani-group-sheds-108-billion-in-market-value/2970128/

https://hindenburgresearch.com/adani/

Also read Why the Retail Giant Future Group Failed


Metaverse or metaverse for Facebook
Digital Marketing

‘Metaverse’ or ‘Metaworse’ for Facebook with over 11,000 Layoffs

‘Metaverse’ or ‘Metaworse’ for Facebook with over 11,000 Layoffs

Dr M Rahman, Senior academician, Galgotias University

Recently, Meta Platforms Inc. (formerly Facebook Inc.) owning Facebook, Instagram, WhatsApp and Reality Labs fired over 11,000 employees, which is around 13 per cent of the company’s workforce on 9th November, 2022. It was the first mass layoff in 18-years history of Meta since 2004.

The CEO of Meta, Mark Zuckerberg took full accountability of the layoffs and said “sorry”. He justified this layoff as an inevitable action to save the company from decline. The company saw it’s revenue declining and stock price tumbling down over 70% this year, making it the worst performer of S&P 500 for 2022.

Zuckerberg mentioned multiple factors like reduced post-pandemic online commerce, macroeconomic downturn, increased competition in social media sector, and ads signal loss behind his company’s decline.

Click here to see Big Tech Companies Flourished amid COVID, Had a Blockbuster Pandemic Year

However, he failed to mention his ‘obsession and overspending in its disastrous metaverse project’ -aimed to create a virtual world in which people would live, work, shop, play and interact with others from the comfort of their home using a VR headset – behind Meta’s decline. But it has to be analyzed, whether it’s ‘metaverse’ or ‘metaworse’ for Facebook.

Metaverse or Metaworse for Facebook

Although many companies like Microsoft, Google etc. started investing in metaverse, Mark Zuckerberg has been highly obsessed with it. In October 2021, ‘Facebook Inc.’ changed its name to ‘Meta Platforms Inc.’ to chase the dream and become the leader of ‘Metaverse’ at the earliest.

Since January 2019, Meta invested a huge amount of $36 billion in its special division responsible for developing its metaverse platform.

However, due to the poor quality of its ‘metaverse’ platform, it could never able to attract enough users and suffered huge losses. Since 2019, the metaverse division incurred a loss of over $20 billion.  In 2021 year alone, this company lost more than $10 billion on it, a 54 percent increase compared to 2020.

As Meta allocated billions of dollars into the metaverse project, it’s unhappy investors sent its shares tumbling more than 70 per cent since the beginning of this year. This reduced the company’s market value by over $650 billion forcing Meta undertake cost cutting measures resulting in mass layoff of over 11,000 employees.

Metaverse or metaworse for Facebook
Living in metaverse
Office meeting in metaverse

Despite these setbacks, Meta will continue investing billions of dollars in its metaverse project. In a letter (dated November 9, 2022) to the Meta employees, Zuckerberg mentioned his commitment in ‘developing the technology to define the future of social connection’. However, many global business heads are apprehensive of the future of metaverse. According to the CEO of tech giant Apple Inc., “The metaverse isn’t the future, because people don’t understand It”.

Do you also think Meta played a gamble by focusing too much on ‘metaverse’ concept of future, rather than fixing other issues in its products? Is it ‘metaverse’ or ‘metaverse’ for Facebook?

External links

https://about.fb.com/news/2022/11/mark-zuckerberg-layoff-message-to-employees/

https://www.news18.com/news/explainers/why-zuckerbergs-meta-has-sacked-11k-employees-what-will-happen-to-indian-workers-now-explained-6346759.html

End of ipod journey
Business Updates

The end of ‘iPod’ journey after 20 years – Cannibalization in Apple Inc.

The end of ‘iPod’ journey after 20 years – Cannibalization in Apple Inc.

Dr M Rahman, Associate Professor, Galgotias University

Apple announced the end of ‘iPod’ journey on May 10, 2022, two decades after it was launched in Oct 2001. iPod, a digital music player, was a revolutionary product that not only changed the way people listened music but also the fortunes of Apple Inc itself, when its PC business was not doing well. The stunning sales of ‘iPod’ is given due credit by experts for Apple’s global success. Today, Apple is a leading global company with a strong sales revenue of 365.82 billion US dollars (in Indian currency Rs 25,607 billion) and net profit of 94.68 billion U.S. dollars (in Indian currency Rs 6,627 billion) in 2021.

However, sales declined rapidly when iPhone (with iPod within it) was introduced in 2007. The advanced features of’ iPhone’ smartphone cannibalized ‘iPod’ since its launch leading to its closure.

iPod 2001
iPod Touch


iPhone

So, rather than wait for someone else to do it, Apple cannibalized its iPod by releasing ‘iPhone’ in a planned manner.

(Note: Product cannibalization refers to a phenomenon that happens when there’s a decreased demand for a company’s existing product in favor of its new product.)

iPod Journey (2001-2022)

iPod is considered to be one of the most innovative products in music product category of 21st century. It is a pocket-sized portable digital music (mp3) playing device launched by Apple in 2001 and sold across the world.

It was an amazing device that could stock ‘1000 songs in pocket’, when other portable music players were able to hold just a few songs in the device.
Despite higher initial price @$399, iPod was highly accepted in the market and the growth was rapid due to its innovative features. Since then, Apple sold an estimated 450 million iPod products across the globe. However, sales declined of late due to the launch of ‘iPhone’ in combination with other factors.

Fig. 1. iPod sales (Source: Huffpost)

Despite higher initial price @$399, iPod was well accepted in the market and the growth was rapid due to its innovative features. Since then, Apple sold an estimated 450 million iPod products across the globe. However, sales declined of late due to the launch of ‘iPhone’ in combination with other factors.

ipod journey

Fig 2. iPod vs iPhone sales (2002-14)

Since the introduction of the iPhone in June 2007, average quarterly sales of the iPod (as shown in Fig 2) decreased dramatically from over 50 million units in 2007 to less than 15 million units in 2014, after which Apple stopped reporting sales figures for the iPod separately. In contrast, iphone sales increased dramatically to over 160 million units in 2014 and 234 million units in 2021. (Source: Statista)

The consumer appeal of ipod started declining with the launch of ‘iphone’ that was a combination of iPod+internet+phone+minicomputer. The increased functionalities on iPhone subjected the iPod to the diminishing utility principle.

In addition, the advent of fast, cheap internet, alongside music streaming services like Spotify, Prime Music, etc meant substantially narrowing use for the iPod reducing its consumer appeal.

Conclusion

Apple built its world-dominating status by being brave. Not only did it create hit products, but it never worried about “cannibalizing” existing products to make way for other products of future. So, rather than wait for someone else to do it, Apple cannibalized its iPod by releasing another product‘ iPhone’ in a planned manner.

References
Apple performance in COVID
https://www.apple.com/newsroom/2022/05/the-music-lives-on/

tata acquiring air india
Business Updates

Tata’s Acquisition of Air India – A Strategic or an Emotional Decision?

Tata’s Acquisition of Air India – A Strategic or an Emotional Decision?

Dr M.Rahman, Associate Professor, Galgotias University

The salt-to-software business conglomerate Tata Sons acquired ‘Air India’ 68 years after it was snatched by the Government of India during the nationalization process in 1953. On 8th Oct 2021, the Talace Private Limited, a subsidiary of Tata Sons won the bid for acquiring 100 per cent shareholding in the state-run national carrier Air India for Rs 18,000 crores. The Tata’s acquisition of Air India has given a new life to the airline struggling to survive for the last few years.

There were two bidders (qualifying the minimum criteria set by the govt) — Talace (Tata Sons) and a consortium led by SpiceJet chief Ajay Singh in the race to buy Air India. The government had set a reserve price of Rs 12,906 crore for the struggling airlines. The Tata Sons’ bid value was ₹18,000 crore, pretty higher than the reserve price as well as the second bidder’s bid value of  ₹15,100 crore.

Over the past few years, the Government of India was desperate to disinvest its stake in the struggling national airlines with a huge debt of Rs 61,562 crores as of Aug 31, 2021 and a loss of Rs 20 crores per day. The airline has been going through losses every year since its merger with Indian Airlines on 24th Aug 2007. Both the public sector airlines were merged to facilitate better synergies of their resources i.e. aircraft, men, material and machine. However, it failed poorly in creating synergies.

Now, a logical question comes in minds of many persons – Whether Tata’s acquision of loss making Air India is a strategic or an emotional decision? The following paragraphs attempt to answer the above key question.

Tata’s acquisition of Air India – Is the decision Strategic?

The Tata group has already been present in airlines business with two brands- Air Asia (a low cost carrier) and Vistara (a full service carrier). Tata Sons owns 84% share in Air Asia which has a market share of 5.2%, and 51% stake in Vistara which has a market share of 8.3%.  At present, all airlines in Indian sky are incurring losses as shown in the pic (below).

With Air India (market share of 13.2%) in its bag, the combined market share of Tata controlled airlines comes at 26.7 per cent. It will emerge as a challenging second-largest domestic airline after IndiGo, if Tata group consolidate the operations of all three airlines successfully. According to some news channels, Tata group is already planning of a consolidation of the airlines so as to achieve operationally profitable.

tata aquiring air india

Post the acquisition, Tatas will own 100 per cent stake in Air India as also 100 per cent in its subsidiary Air India Express (low cost carrier) and 50 per cent 50 per cent stake in ground handling company AISATS.

In terms of fleet, Tata will get Air India’s 117 wide-body and narrow body aircrafts and Air India Express’s 24. A significant number of these aircrafts are owned by Air India. It will also get to operate these aircraft on over 4,000 domestic and 1,800 international routes.Moreover, Air India’s frequent flyer programme has more than three million members.

Air India will provide Tata a unique and attractive international footprint with lucrative slots. More than 2/3rd of Air India’s consolidated revenues comes from international market. Air India  is the number one player from India in the international market having a strong footprint across geographies like North America, Europe and Middle East with attractive slots and bilateral rights.

Besides the above, the conglomerate will get a total talent pool of Air India and Air India Express which stands at 13,500 including both permanent and contractual employees. The only challenge for Tata is to maximize their use.

So, in my opinion, Tata’s acquisition of Air India is a strategic decision as this would help Tata group in gaining competitive advantage in the airlines business and may rule the market in future.

Tata’s acquisition of Air India – Is the decision Emotional?

The Tata’s acquisition of Air India is an emotional moment for the Tata group because this airline was launched by JRD Tata as Tata Air Services in 1932 and JRD himself flew its first single-engine carrying air mail from Karachi to Bombay. Later, the airline launched its first domestic flight from Bombay to Trivandrum with a six-seater plane. Thereafter, it started international air services and JRD had dream of making it much bigger, better.

But, things changed after independence when the Indian government started nationalisation process and went ahead with its plans to nationalise many companies, which incidentally involved Tata Airlines, too. In 1953, the government acquired 100% stake in Air India and took it out of Tata’s control. JRD expressed his anguish that it was a planned conspiracy to suppress private civil aviation, particularly the Tatas’ air services. Nehru reassured him of no such intentions and offered the chairmanship of Air India and a directorship on the board of Indian Airlines. JRD accepted the offer and remained chairman of Air India till 1978.

Tata's aquisition of Air India

Now, the return of Air India to the Tata group is quite emotional as it can be reflected from the above tweet ’Welcome back, Air India’ of Ratan Tata minutes after winning the bid.

So, in my opinion the decision regarding Tata’s acquisition of Air India has an emotional element. It could be also seen in the Tata’s bid amount of Rs 18,000 cr that was much higher than the reserve price of Rs 12,906 set by the government as well as much ahead of the bid amount of the second bidder by Rs 3,000 crores. It justifies the Tata’s strong willingness to get Air India back after 68 years. It’s like winning back a precious item snatched by someone ruthlessly by paying a hefty amont.


Hence, in my opinion the Tata Son’s decision to acquire Air India has an emotional dimension, but it is more of a thoughtful, strategic decision to give a tough competition to the leader IndiGo and rule the Indian aviation sector in the long run.

References

https://timesofindia.indiatimes.com/business/india-business/indigo-lost-rs-16-crore-daily-in-covid-ravaged-fy-21-with-a-net-loss-at-rs-5806-crore/articleshow/83264066.cms

https://economictimes.indiatimes.com/markets/stocks/earnings/spicejet-fy21-loss-at-rs-998-crore-carrier-to-raise-rs-2500-crore/articleshow/83993463.cms?from=mdr

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Owned, Paid and Earned OPE Media for brand success
Digital Marketing

Owned, Paid and Earned (OPE) Media for Brand Success

Owned, Paid and Earned (OPE) Media for Brand Success

Dr M.Rahman, Senior Marketing faculty, Galgotias University

While developing digital marketing strategies, a marketer must have an insight on Owned, Paid and Earned media (OPE) media for achieving the set marketing goals and maximizing Return on Investment (ROI).  These are the broader categories of digital communication channels that must work together to reach out to target customers and drive traffic and conversions. There is also a framework called ‘POEM Framework’ to promote products and services through various media (Paid, Owned and Earned) so that digital marketing campaigns can attract more customers, gain leads and traffic.

These terms Owned, Paid and Earned media were first used by the globally renowned mobile phone manufacturer Nokia in 2008 in connection with their media planning. Nokia categorized all of their digital media as earned, owned or paid media and later on it became very popular in the digital marketing space with the increase in use of digital technologies and internet as a marketing channel and realization that a high-quality digital corporate presence is critical to success in the online environment.

To be successful, businesses must have optimal presence/visibility in all these media channels. However, to get the most out of the marketing budget, one needs to understand different  channels that are likely to work best for a particular type of business to reach out to the target customers or users and selecting the right media-mix within the budget.

This article will help you understand owned, paid, and earned media, their benefits to businesses, metrics to measure their performance and how to optimally use these media.

Owned Media

Owned media refers to communication channels that is owned, controlled and maintained by the brand itself. These media/channels are used to communicate the brand message to target customers under the brand’s own terms, as well as to market specific products or services.

All in-house company channels are described as owned media, which of course includes any corporate media channels such as:

  • Company or brand website
  • Blog
  • Social media pages in Twitter, Facebook,  Instagram, Linkedin etc.
  • You tube channel
  • Online brand Community site
  • Company/brand ‘s mobile app
  • E-mail


Benefits of Owned Media

Having owned media channels provides multiple benefits to a firm as mentioned below:

  • Brands have full control on it: The most notable benefit of owned media is the brand’s ability to control it. When the brand owns the media channel, it decides what type of content to publish, how often it will be updated and how users can interact with it. Owned media channels also allow brands to control incoming and outgoing connections, as well as the visual appearance and structure of the pages consumers view.
  • Improve customer service by providing information at length through websites and handling customer queries or complaints quickly.
  • Helps in build long-term customer relationships: If approached professionally, owned media channels can be successfully used to build long-term customer relationship. You can improve customer experience through personalized content.
  • Helps brand in engaging consumers with positive brand content.
  • Cost effective:  These owned media channels are more cost effective than paid advertising.
  • Helps in extending brand presence online: The more owned media channels you have, there are more chances of extending your brand presence online.

How to leverage owned media for brand success?

  • Connect all channels to one another – When visiting a brand’s website, consumers should be able to find a link to the brand’s social media profiles and blog. Likewise, blogs and social media profiles should always point consumers to the brand’s official website.
  • Offer useful, interesting information. For example, Nestle (www.nestle.in), a global firm producing and marketing popular food brands including Cerelac and Nangrow brands (for infants and children) provides information on energy requirements of infants, children as well as pregnant and lactating mother.
  • Make frequent updates. Every time a brand updates its blog or social media profile, it is reminding consumers of its presence.
  • Quick response to consumers requests or complaints. Two-way communication is key to building relationships and increasing consumer loyalty. When a consumer reaches out to a brand, the brand should respond quickly and positively.

    Owned paid and earned OPE media for brand success

Metrics to measure Owned Media Performance

Metrics are measures of quantitative assessment commonly used for assessing, comparing, and tracking performance. More simply, Metrics are numbers that give you important information how the process is functioning and provide base for you to suggest improvements. Generally a single metric is not good for measuring performance of anything. Rather, a combination of metrics is used to measure the performance of the owned media.

For owned media, some of the appropriate metrics are:

1. Website traffic/No. of visitors
2. No. of web pages viewed
3. Number of content downloads (PDF, Videos etc.)
4. Number of app downloads, updates and actions.
5. Length of time watching/listening.
6. Communication opt-in from content participants
7. Number of email messages read or forwarded to a friend.
8. Social engagement related metrics like likes, shares, comments, retweets etc.

Paid media Click here

Earned media Click here

Digital Marketing

Google fined $1 bn (over Rs 7,000 cr) in France within a year – Why?

Google fined $1 bn (over Rs 7,000 cr) in France within a year

Dr M.Rahman, Management faculty Dr M.Rahman, Associate Professor, Galgotias University

 In less than a year, Google has been fined thrice with a total amount close to $1 bn (Rs 7260 cr) in France. The fine imposed on Google is nothing new as there are a series of fines imposed on Google by competition watchdogs of European Union and various other nations including India, USA, Italy etc. for adopting unfair business practices. Was Google fined in France thrice for political reasons or for adopting unfair business practices or something else? This article will let you know the reasons behind the penalties imposed on Google in France.
Google fined in France

Hey guys! What is the right answer to the question:

Can the tech giant ‘Google’ adopt unfair, biased online business practices?

Most of you might say ‘No’ as you love using Google products like gmail, Google search, Google play store, Google map, Youtube etc. on daily basis. And, I am damn sure Google too love you as a ‘user’ because you provide the tech giant with valuable data on your online behavior, that’s useful for its businesses.

But, the competition regulators/anti-trust agencies of France and many other nations do not agree with your opinion. If it’s ‘NO’

Google fined over $1 bn for unfair business practices

The regulators/agencies of multiple nations including France, India, Italy, USA etc. after thorough investigations found that Google was indulged in unfair online business practices for which it has already been fined over $10 bn (over Rs 70,000 cr). Moreover, the anti-trust regulators of many countries including Australia, Germany etc. have been investigating Google’s business practices further, especially online search and advertising practices. If found guilty, massive penalties could be imposed on Google in future.

Reasons behind $1 bn fine imposed on Google in France

Google has been fined thrice with a total amount close to $1 bn (Rs 7,260 cr) in less than a year time period for unfair business practices, as shown in Table 1 (all calculations are based on exchange rate at the particular time), by French competition regulators. Many persons may not be aware of this fact that a tech giant like Google earning huge annual profit of $40 bn, and whose services are used and loved by billions on daily basis across the globe can adopt such practices.

Google fined $1 bn (over Rs 7,000 cr)

Recently on July 13, 2021, France’s competition regulator fined Google $592 million(Rs 4,410 cr) over a dispute with French publishers who wanted the company to pay for the use of their news content. Not paying publishers or new agencies amounts to unfair business practice on part of Google. The regulator had issued orders to Google earlier this year to hold talks within three months with news publishers and finalize the deal. But, Google failed to do so and hence fined for breaching those orders. The agency threatened fines of another $1 million (around Rs 75 cr) per day if Google doesn’t come up with proposals within two months on how it will compensate publishers and news agencies for their news content.

Just a month ago, in the first week of June, 2021, France’s competition regulator had fined Google $267 million (approx Rs 2,000 crores) after it found that Google had abused its dominant market position for placing online ads. The penalty is part of a settlement reached after three large media groups ( publishers) — US based News Corp, French daily Le Figaro, and Belgium’s Groupe Rossel — had complained in 2019 that Google was promoting and giving preferences to its own services at the expense of their ad revenues of their websites and apps.
Google fined for unfair advertising practice

These large media groups/publishers including News Corp alleged that Google preferred its own ad exchange, Google Adx as compared to other non-Google Ad exchanges from where these publishers could have earned more money in the programmatic advertising process as mentioned in the above figure.
(Note: Programmatic advertising is an online form of advertising for automated buying and selling of online advertising space in real time through an ad exchange, a software-based automated marketplace that allows publishers to sell their ad inventory and advertisers to bid on and purchase the inventory in real time)

The regulator’s investigation confirmed that Google had developed its complex algorithm in such an unfair manner that it gave preferential treatment to its own services (Google AdX and ad networks) as compared to other’s services in the advertising process.

Google has already accepted to pay the fine of $267 mn (approx Rs 2,000 cr) and announced that it would make changes to its advertising practices. It indicates everything was not fair behind the complex algorithm in the world of Google’s digital advertising.

In Dec 2020 too, Google was fined in France. The French data regulatory body CNIL, had fined Google $121 million (approx Rs 900 cr) for breaching the country’s rules on advertising cookies. The regulatory body CNIL found that Google did not request prior consent from internet users about trackers, or cookies, that were automatically saved on computers for advertising purposes. Moreover, Google also failed to provide clear information to users about the purposes of these cookies and how they might refuse them. These were gross unfair business practices on the part of Google.

Conclusion

Based on the above facts and findings, it can be concluded that Google was penalized for unfair business practices in all the three instances. The tech giant need to adopt fair practices proactively and take care of the interests of all stakeholders for maintaining its growth and reputation in the rapidly growing digital world.

References

  1. https://www.npr.org/2021/07/13/1015596060/france-fines-google-592m-in-a-dispute-over-paying-news-publishers-for-content
  2. https://www.trtworld.com/europe/france-watchdog-fines-google-267m-for-favouring-own-ads-over-rivals-47314

Also see Big Tech Companies Flourished amid COVID, Had a Blockbuster Pandemic Year

Business & Economy

Big Tech Companies Flourished amid COVID, Had a Blockbuster Pandemic Year

Big Tech Companies Flourished amid COVID, had a Blockbuster Pandemic Year

When the coronavirus led pandemic brutally destroyed the world economy and companies across the globe, the big tech companies flourished amid COVID that started in early months of 2020.  The global shift in habits helped the big tech companies Google Apple, Facebook, Amazon and Microsoft (GAFAM), earned unexpected revenues in the pandemic year, better than normal years. The Tech giants – Amazon and Apple posted record revenues with both companies topping $100 billion in quarterly revenue for the first time in the final quarter of 2020. These companies earned over $200K (Rs 1.5 crores)  to 800K (Rs 6 crores) per minute with a year-on-year profit growth in the range of 44% to 220% in Q1 of 2021.

Big tech companies flourished amid COVID in 2020

The COVID 19 pandemic started in early 2020 spread like wildfire infecting millions of humans across the globe and bringing the economic activities to a standstill as countries imposed tight restrictions to halt the movement of public to control the spread of the virus. It made a dent in the world economy with almost all of the major economies including India in negative growth zone.  Barring China, all major economies felt the massive negative impact of coronavirus pandemic. The first major impact was felt in the April-June quarter of 2020, except Chinese economy that grew by 3.2 per cent, all other major economies contracted as shown in figure 1.

Fig 1: COVID and Major Economies Growth Rate in April-June 2020.

By September 2020, every advanced economy had fallen to recession or depression, and all emerging economies were in recession. The world GDP contracted by 3.27% with almost all major economies standing in the red zone. And the future too seems to be gloomy with the World Bank suggesting that in some regions a full recovery won’t be achieved until 2025 or beyond.

But, when many companies collapsed partially or completely, the big technology companies flourished amid COVID and had a blockbuster pandemic year. These companies including GAFAM companies were able to generate huge revenues and profits in this pandemic. GAFAM is the abbreviation of Google, Amazon, Facebook, Apple and Microsoft. These Big Tech companies had a big year in 2020, as the coronavirus pandemic did not stop these companies from growing year on year basis as shown in figure 2.

Fig 2: Big Tech (GAFAM) growing in COVID

The Tech giants Amazon and Apple posted record revenues with both companies topping $100 billion in quarterly revenue for the first time in the final quarter of 2020. Apple revenue crossed $100 billion for the first time in its history during the last quarter of 2020, up 21 percent year over year. iPhone sales reached ‘record’ $65.6 billion—the previous best was $61.58 billion, which Apple achieved in fiscal Q1, 2018.1

After Apple, Amazon became the second big tech company to post its largest quarterly revenue of all time at $125.56 billion in October-December quater of 2020, as online shopping broke all records in this period amid the Covid-19 pandemic. Amazon’s full-year 2020 net sales were up 38 per cent, to $386.1 billion.2

Big tech companies flourished amid COVID in Q1 2021

The big tech companies continued growing more with an excellent start in 2021 with sound revenues and profits. CNBC, the US based news channel looked at the most recent quarterly earnings reports that five of the biggest brands in tech (Amazon, Apple, Alphabet, Microsoft, and Facebook) in recent weeks, and broke down how much revenue they each made for every minute of the first three months of 2021. (There were 90 days, and 129,600 minutes, in the first quarter of 2021). The big tech companies earned over $200,000 (Rs 1.5 cr) per minute to over $800,000 (Rs 6 cr) per minute in the first quarter of year 2021 as shown in Fig 3..

Fig 3: Big Tech Companies Revenue Per Minute in Q1 2021

Amazon with a revenue of Rs 6 cr per minute was the leader in revenue generation per minute followed by Apple, Alphabet (Google), Microsoft and Facebook (Rs 1.5 cr per minute revenue).

  1. Amazon: $837,330.25 revenue per minute ($109 bn revenue in first three months of 2021)
  2. Apple: $691,234.57 per minute  ($90 bn revenue in first three months of 2021)      
  3. Alphabet: $426,805.56 per minute ($55 bn revenue in first three months of 2021)
  4. Microsoft: $321,805.56 per minute ($42 bn revenue in first three months of 2021)  
  5. Facebook: $201,936.73 per minute  ($26 bn revenue in first three months of 2021)

In 2021′s first quarter, Amazon led the pack by pulling in $108.6 billion in revenue 220% jump in profit over previous Q1 of  year 2020. That breaks down to $837,330 per minute during that three-month period. Amazon topped $100 billion in revenue for the second quarter in a row as the pandemic forced people to do even more of their shopping online.

Apple followed Amazon in the breakdown of revenue-per-minute, pulling in $691,234 every minute of the first quarter of 2021. The company posted revenue of $89.6 billion for the quarter, with iPhone sales that grew by 65.5% from the same period a year earlier. The profit in this quarter was 110% over same period in previous year.

Fig 4: Big tech companies growth in Q1 2021.

Google’s parent company, Alphabet pulled in $426,805 per minute, based on its reported total revenue of $55.3 billion for the first quarter of 2021. The profit in this quarter was 162% over same period in previous year.

Microsoft, reported $41.7 billion in quarterly revenue this past week, which broke down to $321,805 in revenue per minute. The profit in this quarter was 44% over same period in previous year.

Facebook pulled in $201,936 of revenue per minute with $26.2 billion in total revenue for the first quarter of the year 2021. The profit in this quarter was 94% over same period in previous year.

So friends, the pandemic has definitely boosted sales of tech companies as the world is getting more tech oriented. These tech companies would flourish more in future in the rapidly growing, hypersensitive digital world.

What do you say? Comment.

About the author
Author
Dr. M.Rahman is a senior academician in the area of business management with an interest in digital marketing, CRM, Branding and Analytics. He has been teaching and training post graduate management graduates in various reputed management institutes in Delhi/NCR for over 15 years.

1 (https://www.financialexpress.com/industry/technology/apple-revenue-crosses-100-billion-for-first-time-as-iphone-sales-soar-globally/2180406/)

2 (https://www.thenewsminute.com/article/amazon-crosses-100b-quarterly-revenue-first-time-142701)




Business Updates

Petrol scoring century – Which factors to blame for high fuel price?

Petrol scoring century – Which factors to blame for high fuel price?

Dr M Rahman, Associate Professor, Galgotias University

And it’s a century…….???

Recently one morning, many people were discussing on a century scored by someone… I thought it might be a century by Kohli that I missed to watch due to my busy official schedule of developing future managers…… But ?

Ya, man. It was definitely a century.. but not by Kohli or Ashwin in a cricket stadium. It was a maiden century scored in the Indian oil market where the petrol price crossed Rs 100 in Sri Ganga Nagar, Rajasthan and then in Nagarabandh in Madhya Pradesh. (It is to be noted that fuel prices vary statewise due to local state taxes). Because of the increased fuel price, India got the status of a country where petrol is least affordable among the major economies of the world as well as the neighboring countries.

Affordability is a ratio of per capita daily GDP to the pump price of petrol and diesel. In large economies like USA, UK, France, China etc., a litre of petrol and diesel cost less than 5% of an average person’s daily earnings . In India, petrol and diesel cost almost 25% and 23% respectively of an average person’s daily income, that’s too high. With this high price, petrol is costlier in India than all the neighboring countries (Pakistan, Bangladesh, Bhutan, Sri Lanka  and Myanmar), except Nepal.

For sometimes there were enough jokes floating around in social media about petrol prices touching Rs 100. But now it came true to the surprise of the many people.

Now you may be think……Surprise, for what?

Many persons were surprised at the extremely high pricing of petrol as well as diesel at the time when global crude oil price was quite low as compared to the period when crude price was over Rs 100 as shown below.

https://bandmguide.com/petrol-scoring-century-who-is-to-blame-for-high-fuel-price/

In March 2012, when the price of crude was $124 per barrel, people were paying Rs 66 for a litre of petrol. But in Feb 2021, when the crude oil price was just $62 per barrel (half of 2012 crude price), petrol price touched Rs 100 per litre.  This was a big surprise to many individuals with logical brains in the country. (Note: 1 barrel = 159 litre).


Moreover, as shown in the graph (above), there has been a steep decline in crude oil prices since its peak during 2012-13. However, there was no proportionate fall in prices of petrol and diesel visible in India. Even, when there was sharp decline of crude price below $20 per barrel in April 2020 during the coronavirus related lockdown, the petrol price was around or over Rs 70 per litre across the country.

The above data surprised me too and made me think of exploring the reasons behind the steep hike in fuel prices and finding out the main culprits to blame for this.

Which factors to blame for high fuel price?

For the fuel price rise, many people including general public, experts as well as government representatives, blamed multiple factors – global crude price rise, COVID 19 and/or central as well as state taxes– depending upon their knowledge or personal biasness.

Should we blame global crude oil price factor for high fuel price?

Some people including Union petroleum and natural gas and steel minister Dharmendra Pradhan also blamed the crude oil prices at the global level and said that reduced fuel production and oil-rich nations seeking more profits were the primary reasons behind spiraling petrol and diesel prices in the country. But this blame didn’t have any substance as shown in the figure given below.

In March 2012 (as shown in the above graph taken from The Times of India), when the average crude oil price touched a record high of $123.6 per barrel, petrol and diesel prices were Rs 65.6 and Rs 40.9 respectively in Delhi. International crude prices have never been that high again, but retail prices steadily climbed in India. In Jan 2021, when the average crude oil price was much low at $54.8 per barrel (half of March 2012 price),  petrol and diesel prices were Rs 87.9 and Rs 78.1 respectively in Delhi.

So, the blame on global crude price for the increase in the fuel price is not at all justified.

Should we blame COVID 19 factor for high fuel price?

Some people attributed the high fuel price to the COVID 19 and associated lockdown by government on March 25, 2020. The prolonged lockdown put pressure on the petroleum companies due to low sale of oil, broke down the Indian economy and this dried up other revenue sources for the government. And the government was left with no option but to increase revenue from oil.

Definitely, COVID made a dent in the world economy with almost all of the major economies including India in negative growth zone.  Barring China, the world’s second-largest economy, all other major economies felt the negative impact of coronavirus pandemic. In the April-June quarter of 2020, except Chinese economy that grew by 3.2 per cent, all other major economies contracted.

The impact on India was the worst among the major world economies in the April-June quarter of 2020 as shown in the figure. The United Kingdom (UK) was the second worst sufferer with a 21.7 % GDP contraction, followed by France (-18.9 %),  Italy (-17.7%), Canada (-13%), Germany (-11.3%) and USA with 9.1%  GDP contraction.

India’s economic growth suffered the worst fall on record in the April-June quarter, with the gross domestic product (GDP) contracting around 24%. The coronavirus-related lockdowns mainly weighed on the already-declining consumer demand and investment. The Indian economy was already in bad shape prior to the coronavirus pandemic due to certain poor government policies.

Before the pandemic year, the GDP growth rate was already declining since 2017-18 and was just 4.5% in 2019-20.  Further with the entry of the pandemic in the Indian territory, the condition worsened. It’s just like attack of corona-virus on a weak person fighting with many diseases. That exactly happened with the country’s economy.

Considering the above facts and figures, COVID can’t be held totally responsible for high fuel price. Rather, government’s poor policies and poor performances over previous years should also be equally blamed for high petrol price.

Should we blame the central/state taxes factor for high fuel price?

If we analyse the base price of oil, associated taxes and dealer commission in Delhi, it’s shocking that over 60% of what we paid for petrol were taxes in Feb 2021, as compared to just over 30% taxes we paid for petrol in May 2014. The petrol price @ Rs 86.3 at retail outlets in Delhi at a much lower base price per litre in Feb 2021 was much higher than the petrol price @ Rs 71.4 at retail outlets in Delhi at a much higher base price in May 2014. The key reason for this unreasonable price was steep rise in the central government’s taxes from just 14% in 2014 to a huge 34% in 2021 as shown


in the table. Much of these taxes were raised last year as the pandemic dried up other revenue sources for the government. The elevated taxes kept fuel prices up in India even though crude oil prices had crashed and stayed low for much of 2020.

So, the large amount of taxes imposed by the central government must be blamed for the high fuel price in India.

Experts are of the opinion that the government must stop depending on taxes on fuel especially petrol and diesel to bridge its fiscal deficit as it hurts consumers pockets and feed into higher inflation. The rise in diesel price by over 6% (around ₹5 a litre) in the State since the beginning of the New Year has already begun to have a cascading effect. The transport cost of essential commodities such as foodgrains and vegetables has already shot up, and the general public (customers) will have to bear it.

Moreover, some people including opposition party members were of the opinion that rather than imposing higher burden on public in the form of taxes on fuel, the government should restrain from spending a huge Rs 20,000-crore on the central vista project when the entire nation is reeling under the coronavirus crisis. The government should also expedite recovery of the massive written-off bad corporate loans of Rs 5,85,473 crore on priority basis.

Conclusion

It is to be concluded that the global crude oil prices can’t be blamed for the higher petrol and diesel prices. Rather the poor economic performance of the government in the past and abnormal taxes on petrol and diesel imposed by the government of India are to be blamed for high fuel prices and for making the country least affordable on petrol and diesel among major economies. The corona virus related pandemic is also to some extent responsible for the fuel price rise. It is also concluded that the government must stop depending on petrol, diesel taxes to bridge its fiscal deficit as it hurts consumers pockets and feed into higher inflation. The government must also restrain from big ticket expenditures in the present time when the nation is in economic crisis and must focus on other revenue sources, other than fuel taxes.

What’s your opinion? Who should be blamed for the higher petrol price in the country? Write in the comment box.

Business Updates

Farms laws 2020 – More benefits or Drawbacks in these laws?

Farms laws 2020 – More Benefits or Drawbacks in these laws?

Dr. M.Rahman, Associate Professor, Galgotias University

The three farm laws that were passed, with an aim to improve the country’s agriculture sector, by both houses of the parliament and received presidential assent in September 2020 received widespread protest from farmers across the nation. These laws – The Farmers Produce Trade and Commerce (Promotion and Facilitation) Act, 2020; The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Act, 2020; and The Essential Commodities (Amendment) Act, 2020 – collectively seek to provide farmers with multiple marketing channels and provide a legal framework for farmers to enter into pre-arranged contracts among other things. The PM and many ministers in the central government claimed that enactment of these laws is historic and these would drastically improve farmers’ lives by increasing their income by selling their agricultural products anywhere in the country. However, these claims didn’t run well among the farmers and nationwide protests erupted. The farmer union’s claim that these laws would make the APMC (Mandi) system redundant, finish the minimum support price (MSP), leave the farmers at the cruel market forces and business houses and eventually ruin the farmers life. The farmer group’s mistrust on these laws resulted in thousands of farmers in Punjab, Haryana and several other states coming on the roads to protest against three farm laws since these were presented in the parliament.



Over the past one month, farmers started the fiercest protest and have laid siege to the national capital by blocking the highways to Delhi. The Modi government scrambled to find an amicable solution, but the multiple rounds of meetings between protesting farmer groups and the central government failed to reach any solid conclusion. The farmers are so angry with these newly formed laws that they are demanding nothing less than total scrapping of the laws.

Now the big questions come – Why the farmers are so angry with these laws? Why this mistrust between the farmers and the central government? Why don’t the farmers trust the words or intentions of PM Modi and its ministers who claimed passing of these laws by the parliament as the watershed/historic moment in the life of Indian farmers?

 Now there are two extreme opinions that have emerged on these farm laws. While one extreme opinion is ‘it’s a death sentence to the farmers’, other extreme opinion is ‘it will drastically improve the lives of the farmers’. Now, Let us try to understand the farm laws and the key provisions in these laws, and analyse the benefits from these laws as well as drawbacks in these laws.

About the enactment of the farm laws 2020

On June 5, 2020, with an aim to improve the agriculture sector and farmers’ lives, three farm related ordinances – 1. Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020, 2. Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020, and 3. Essential Commodities (Amendment) Ordinance, 2020 were promulgated by the union government. Since then there have been protests against these bills from the opposition members as well as farmer groups. But, rather than responding to the protests and considering the concerns of the protestors, the govt went on to pass the bill in Lok Sabha first and then in Rajya Sabha on on 17th Sep and 20th Sep respectively with severe resistance by opposition parties. These ordinances were finally converted into acts after presidential assent on 27th September 2020. Since then, there have been widespread and fierce protests of farmers across the nation. The three acts that have become contentious are:
1. Farmers Produce Trade and Commerce (Production and Facilitation) Act, 2020         
2. Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020
3. Essential Commodities (Amendment) Act, 2020



Now, let us try to understand the provisions made by these three laws one by one starting with Farmers Produce Trade and Commerce (Production and Facilitation) Act, 2020. The key provisions this act and its benefits as well as drawbacks associated with it without any any personal or political biasness.

Provisions in Farmers Produce Trade and Commerce (Production and Facilitation) Act, 2020.

  1. Alternative Trading Channels: This act permits intra and inter-state trade of farmers’ produce beyond the physical premises of Agricultural Produce Market Committee (APMC) markets and other markets notified under the state APMC Acts. In simple language the farmer can sell their produce outside government regulated mandis or any outside trade area such as farm gates, factory premises, cold storages, and so on.  
  2. Registration/License: No formal registration or license is required by an individual or business to purchase agri-produce outside mandis. Any PAN card holders can buy foodgrains from the farmers.
  3. Electronic Trading: This act also facilitate direct and online buying and selling of the agricultural produce via electronic devices and the internet. 
  4. No market fee or tax on trading outside APMC trade areas: There will be no market fee or tax on farmers, traders and electronic trading platforms for trading farmers’ produce in an ‘outside trade area’. 
  5. Dispute settlement mechanism – This act provides for a three-level dispute settlement mechanism– Conciliation Board, Sub-Divisional Magistrate and Appellate Authority (normally district collector). No civil court will have the power to intervene.   

Benefits of Farmers Produce Trade and Commerce (Production and Facilitation) Act, 2020         

  1. Availability of alternative trading channels: Farmers will have alternative options and the freedom to sell their produce outside the APMC (agricultural produce market committee)/mandis legally and there will be no tax on such trade which may give a higher price to the farmers. They can also sell online and can get a chance to connect with the modern IT world. APMC is not considered to be the perfect practice and need improvements as per many experts.

    It is to be noted that, previously sale and purchase of agri-produce could only be done in the APMC yards or Mandis in the specified area where the buyers have to pay at least the minimum support price (MSP) set by the government for specified agricultural products. At present there are 23 items on which the central government fixes MSP. The sale and purchase outside these mandis were deemed illegal as there were more chances of farmers’ exploitation on price and payment). But, this act has made it legal.

The minimum support price (MSP) is an agricultural product price set by the Government of India to purchase directly from the farmer. This rate is to safeguard the farmer to a minimum profit for the harvest. The central government sets the price for 23 commodities twice a year. These commodities include cereals (paddy, wheat, maize etc.), pulses (moong, urad, tur etc.), oilseeds (peanuts, sunflower, soyabean etc.) and commercial crops (cotton, jute, sugarcane and copra).



2. Promotes Inter-state and intra-state trade: Farmers can sell their produce within the state or anywhere else in the country and there will be no restriction on this type of trade. This will benefit the farmers that they will be able to sell their produce to the merchant wherever they get a higher price.
It is to be noted that, earlier, they were not legally allowed to sell in APMC/mandis in outside the specified areas.

3. Farmers can sell to anyone with a valid document like PAN card: There will be no need for any kind of registration or license for traders to purchase agricultural produce of farmers in the trade area outside the APMC mandi. Those holding PAN card or any other document notified by the Central government can join this trade. This will facilitate trade in agricultural products and will benefit the farmers.
Note: Trading in APMC areas/mandis need proper registration and every transaction is recorded.

4. Fast dispute settlement: In case of any dispute arising in such business, the matter will be settled within 30 days by the Sub-Divisional Magistrate. This is really good for the farmers if it’s done with seriousness and honesty.

Drawbacks of Benefits of Farmers Produce Trade and Commerce (Production and Facilitation) Act, 2020         

1. No MSP and chances of exploitation on price: Outside APMC yards, MSP or minimum price is not guaranteed and there are chances farmers may be exploited on price decided by traders and the cruel market forces.

Farmer groups claim that the states where APMC/Mandi system is poor like Bihar, farmers sold their foodgrains at a price much lower than the MSP fixed by the government. The farmers in Punjab and Haryana are financially sound as compared to other states like Bihar because the former sell their products at MSP in APMC mandis thereby getting over Rs 1800 per quintal for wheat and paddy against the later getting a much lower price than the MSP.

2. Business in APMC (government mandis) may suffer – Since there will be no taxes/fees in outside trade areas, it would lead to uneven competition and trading would move from govt mandis to private trade areas and ultimately the APMC/govt mandis will be finished. This will create two types of markets – one with tax and other without tax.  This is a favour to those trading outside APMC trade areas.

As claimed by the President of the Maharashtra Rajya Bazaar Samiti Sahakari Sangh, Dilip Mohite Patil, around 100-125 market committees (mandis) in Vidarbha and Marathwada regions have reported almost no business and are on the verge of closure after the announcement of the central Ordinance in June 2020. 

4. Loss of income of those engaged in APMC: There are many traders and agents engaged in facilitating the sale and purchase of the farmers’ products. Some invested money in their shops or godowns in the APMC area.
Farmer groups claim that since there is no fee/taxes on outside trading areas, business may shift from APMC areas to outside trading areas. The loss of business in APMC areas would endanger the livelihoods of many persons working in or engaged with these areas.
It is to be noted that farmers selling in government mandis have to shell out around 10% as mandi fees and taxes.

5. No judicial support: Since there will be no intervention of court i.e. judicial support (as per this act), the farmers will be at the mercy of the government authorities (SDM, Collector) In case of dispute. People have more trust on courts than that on government babus, and so its a drawback.                                                                   

6. Poor regulation on traders outside govt mandis: As per the act, no formal registration or license is required and anyone with a PAN card can buy from farmers outside mandi areas. With this, farmers will be exposed to the risk of fraud due to the entry of people without license or registration. There could be more chances of cheating/fraud with emergence of fly-by-the night operators.

Conclusion

The Farmers Produce Trade and Commerce (Production and Facilitation) Act, 2020 has good intention but without strong safeguards to the farmers. It would have been better, if farmers concerns were taken into consideration by the government while formulating the bill. The government should remove the drawbacks associated with this law so that the farmers can realize the full benefits out of its implementation and improve the nation’s economy. The government should improve the deficiencies in APMC/mandis, assure MSP or develop some pricing mechanism so that the farmers don’t have to play in the hands of cruel market forces while selling in areas outside APMC, impose fee/taxes in outside trade areas at par with the APMC trade areas so that there is a level playing field between the two areas, provide judicial support in case of dispute not settled by SDM or collector, and provide for registration/regulation of buyers outside APMC (mandi) areas so at that farmers won’t be exposed to the risk of fraud due to the entry of people without license or registration. So, it is to conclude that this law should not be repealed, rather the government should improve/amend it so that it becomes good for the farmers and the nation.

For provisions, benefits and drawbacks of other two farm laws CLICK HERE