Chinese tech giants may move writ petition against India's ban on apps

They say that there has been no allegation of violation of any law which can attract such a grave banning order
A handful of Chinese companies whose apps have been banned by the government are considering moving court, as they believe the decision was arbitrary and discriminatory and was violative of Article 14 of the Constitution, said two people with direct knowledge of the matter.

Law firms representing these companies feel that if the government does not reconsider the move, despite these companies providing assurances over concerns such as data localisation and modification of their set up, they might move a high court.  

The Chinese app companies, though, are learnt to have begun preparing the ground to fight a legal battle against the Indian government, as they argue that they weren’t granted a hearing before the ban. “The move is extreme punishment without any offence being made out. The petition may also seek clarity on the future of the billions of foreign direct investment in infrastructure and many more sectors,” said one of the two persons cited above.

The firms say they haven’t been accused of violating any law that attracts a ban. Besides, they weren’t issued show-cause notices before the ban. The order is without any basis or reasoning, the person said.

These deliberations occurred even as Ministry of Electronics and Information Technology (MeitY) on Wednesday sent an intimation letter to the companies running the 59 apps.


It said “further action shall be initiated under the provisions including an enquiry wherein you (companies) will be furnished with details of the grounds and concerns on which the ban notice (was) being issued”. The ministry added that the firms will be given an opportunity to submit their responses.

Before the intimation letter was sent to them, the legal teams of the app firms had already prepared a representation that they were to submit to MeitY. The representation covers the general economic impact of the move and highlights their contribution towards India’s economic growth and fulfilment of consumer demand. “Suspending operations will directly impact India’s economic and commercial expansion, and will be a heavy setback towards its burgeoning entrepreneurial spirit and innovation,” said an executive of one the firms.


Revenues

The government’s move will not impact its revenues as such. According to sources in the government, the firms’ income tax is minimal as they continue to show losses. However, they pay indirect taxes on the advertisement spend.

“The government’s act comes as a possible political reaction to recent geopolitical events. Given the large amount of employment generated by some of these apps in India as well as the steps being taken to ensure data localisation, the move appears to be retrograde,” said a law firm.

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