Flipkart, India's homegrown e-commerce giant, took an incredibly bold stance on Tuesday. It walked away from negotiations with Airtel, one of India's biggest telecom companies, where it could have been one of the first partners in a new program to offer certain internet services to customers for free. Flipkart's decision came after hundreds of thousands of people online rallied behind the idea of net neutrality and carried out a campaign against the e-tailer for its stance that was seen to violate the principles of an open, free internet.

Net neutrality is the idea that all traffic on the internet should be treated equally, with internet service provides not being allowed to decide if some data gets to be faster or cheaper than others. "We at Flipkart have always strongly believed in the concept of net neutrality, for we exist because of the Internet," Flipkart said in a statement. "We will be committing ourselves to the larger cause of Net Neutrality in India."

This is bold for two reasons. It is the first instance of a major Indian company actually changing tack because of internet pressure and calls for net neutrality to be enforced. And, while Flipkart might insist that it "exists because of the internet," it also exists because of service providers like Airtel, so walking away from negotiations with the company could not have been an easy decision.

Flipkart's Hero Rating

By taking this stance, Flipkart has made it harder for any other major company to work with Airtel, or any other Internet Service Provider, on any version of what is known in the net neutrality debate as "zero rating." This is the idea that service providers, like Airtel or MTNL, will offer certain digital services for free, with the general presumption being that the data use will be subsidised by those companies.

Take Internet.org, an initiative by Facebook founder Mark Zuckerberg. Working with Reliance in India, Facebook wants to bring a number of websites to Internet.org users for free. There are similar plans involving WhatsApp, Google and Twitter on various ISPs, essentially allowing the service to pay for data costs which would then let customers access those websites for free.

The idea sounds great, and in theory could expand access to the web in a country where internet usage is still very limited. But it also violates net neutrality, a principle that Indian activists are desperately seeking to preserve, as the telecom regulator begins to consider how it should oversee the relationship between service providers and internet companies like Flipkart.

Not so neutral

How does it violate neutrality? By allowing the ISP, like Airtel or Reliance, to choose which services can come to you for free and which ones need to be paid. This would effectively balkanise the internet, splitting a once fairly open world into free zones and paid ones, and naturally tipping the balance in favour of any service that is offered for free.

Another simple way to look at it is to think from the point of view of a website creator. Until now, just buying a domain or building an app meant that anyone on the internet has as much access to your product as they have to Facebook or WhatsApp. If zero rating were permitted, however, building your app or website wouldn't be enough. You'd have to pay more money to the ISPs to get into the free section of the internet world, or else risk being stuck behind a paywall that, in a price sensitive country like India, could be the death knell for a small business.

Think of how often you have paid for an article, even if it's from a reputed news outlet like the New York Times, when you've hit a paywall? Giving something away for free has massive anti-competitive repercussions, because, unless the bar to get into the free zone is transparent and low, it gives the ISP the power to decide what websites get a traffic advantage.

Not Zero Sum

But the issue isn't one that's entirely settled, with lots of people believing that zero rating doesn't exactly violate net neutrality since someone, in this case mostly the services like Flipkart, is paying for the data usage. It's also hard to argue against any concept that seems to give things away for free, especially to a low income audience for whom data costs could be a deal-breaker when it comes to deciding whether to use the internet.

Many believe that certain approaches to zero rating can be truly radical and expand access to the internet for those who wouldn't or couldn't otherwise use it. Wikipedia, for example, operates a zero rating program that lays down certain requisites – not paying for data, no exclusive agreements, no bundling – but still actively lobbies ISPs to provide the online encyclopedia for free.

Others have argued that zero rating should be free for certain services that are non-commercial, like Income Tax websites or Aadhar services. A counsel for Wikipedia argues that this is exactly why it should be allowed for the encyclopaedia as well, because it is a service that aims to spread information without trying to earn profit. But violating neutrality in any way gives ISPs space to crack open that door even further, with arguments following soon after that even a for-profit company like Facebook can make life better for people and so should be free.


For now Flipkart's decision, coming on the back of an active online campaign, and the way it has been covered – amazingly being featured across all the news channels with hashtags like #SavetheInternet – means that zero rating has earned a truly bad name, and will be placed alongside other anti-competitive anti-net neutrality policies.

The United States' telecom regulator chose to stay away from zero rating even as it laid down net neutrality as a principle this year. With India's own telecom regulator excepted to file its own report on the matter this month, we'll soon know if Indian law will be following Flipkart's lead.