When corporations act as states: Rethinking power in the Big Tech age

In February 2022, as the Russia-Ukraine war started, some of the most immediate and consequential responses did not come from governments. They came from technology companies. Platforms restricted Russian state media, payment networks suspended operations, satellite providers enabled battlefield connectivity, and cloud firms secured critical data infrastructure. Corporations were no longer just responding to events; they were shaping the environment in which the conflict unfolded.

That moment pointed to a larger shift that is now difficult to ignore. Power in the 21st century is no longer the sole preserve of nation-states. It is increasingly shared, sometimes quietly contested, by a handful of technology firms whose scale and influence cut across borders in ways states cannot easily replicate.

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At first glance, comparing corporations to countries may seem exaggerated. They have no territory, no citizens, no formal sovereignty. But if we move beyond these formal markers and look at how power actually operates, the comparison begins to hold.

In terms of economic scale, firms like Apple Inc. and Microsoft command valuations that rival the GDP of major economies. Amazon runs a cloud infrastructure that governments and financial systems depend on. Alphabet Inc. effectively mediates access to information for billions of people. These are no longer just firms competing in markets; they are platforms on which entire systems function.

But scale, by itself, is not the point. Authority is.

When a platform determines what speech is allowed, it is performing a governance function. When it controls payment ecosystems or app stores, it influences economic participation. When it manages cloud infrastructure, it becomes part of a country’s critical backbone. The difference is that these decisions are taken without the kind of accountability we expect from governments, and often beyond the reach of any one jurisdiction.

This becomes most visible in moments of crisis. During the Ukraine conflict, SpaceX’s Starlink network proved indispensable to communication on the ground. At the same time, companies like Visa Inc. and Mastercard effectively reinforced financial sanctions by cutting off access. These are functions we traditionally associate with state power, now exercised, at least in part, by private actors.

What we are witnessing is not episodic. It reflects a deeper structural change. States exercise authority within borders; technology companies operate through networks that ignore them. This creates a paradox. States remain sovereign in principle, but in practice, they are increasingly reliant on infrastructures they do not fully control.

For India, this presents both a challenge and an opportunity. With over 800 million internet users and a fast-growing digital economy, India is not just a market; it is one of the primary arenas where this new balance of power is being negotiated.

Crucially, India has not remained passive. It has begun, deliberately, to assert what might be called digital sovereignty.

Regulatory action has been one part of this. The Competition Commission of India has imposed significant penalties on Google for abuse of its Android ecosystem, while also examining the practices of Meta Platforms and Amazon. The message is straightforward: scale does not place firms above domestic law.

Even more important has been India’s investment in digital public infrastructure. Platforms like Aadhaar and Unified Payments Interface have created population-scale alternatives that reduce dependence on private intermediaries. The Open Network for Digital Commerce is an attempt to extend this logic to e-commerce, breaking platform monopolies through interoperability rather than prohibition.

These initiatives are often described as technological innovations. They are better understood as instruments of statecraft.

Yet, the underlying tensions remain. Much of the world’s cloud infrastructure is still concentrated with a few firms, primarily Amazon, Microsoft, and Google. Data flows particularly remain global even as regulation is national. And artificial intelligence is likely to deepen this concentration. At the same time, it also underscores the importance of building complementary domestic capacities and ensuring that Indian enterprises operate on a level playing field in global markets.

This suggests that India’s approach must move beyond regulation alone. It needs to become more strategic.

One way to think about this is through reciprocity. If technology firms seek access to Indian markets, they must also extend comparable protections and rights to Indian users elsewhere. This is not about protectionism; it is about parity. If global platforms benefit from access to India’s vast market, a corresponding framework could ensure that Indian companies receive comparable access, regulatory treatment, and operating conditions in international markets.

In parallel, as India continues to create enabling conditions for large technology investments, there is also an opportunity to extend similar ease-of-doing-business reforms across the broader domestic industry. A calibrated reduction in regulatory complexity, what may be termed ‘regulatory cholesterol’, can strengthen competitiveness across sectors, ensuring that the gains of digital openness are widely distributed.

Another shift lies in how we treat data. It is no longer just an input; it is an economic and strategic resource. Policies that ensure its fair use and value capture, without stifling innovation, will define the next phase of competition.

There is also a broader diplomatic opportunity. Just as India has shaped conversations around climate and digital payments, it can play a role in building coalitions, particularly across the Global South. India must stimulate the discussion to push for more open, accountable, and interoperable digital ecosystems.

At a deeper level, what is changing is our understanding of sovereignty itself. In the industrial era, sovereignty was tied to territory and military capability. In the digital era, it increasingly rests on control over data, networks, and technological infrastructure.

We are, in effect, moving towards a hybrid order, where states and corporations exist as parallel centres of power.

The real question, then, is not whether technology companies resemble countries. It is whether states are prepared to deal with them as such, not in opposition, but in a framework of parity, partnership, and mutual accountability, while safeguarding their own strategic autonomy in a world where power is no longer confined to borders.

For India, this is a moment of choice. The building blocks, that is, the regulatory capacity, digital infrastructure, and market scale, are already in place. What is required now is the clarity to use them with intent.

(Manika Malhotra Jain is Chief Coordinator at Policy Perspectives Foundation (PPF), a Delhi-based think tank. The views expressed in the above piece are personal and solely that of the author. They do not necessarily reflect Firstpost’s views.)