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Lex Witness in association with The Trade & Regulatory Compliance Practice Desk at Saikrishna & Associates brings to you a detailed analysis on select updates and notifications.
MEITY HAS PROPOSED AMENDMENTS, IN RELATION TO ‘ONLINE GAMES’ AND ‘ONLINE GAMING INTERMEDIARIES’, TO THE INFORMATION TECHNOLOGY (INTERMEDIARY GUIDELINES AND DIGITAL MEDIA ETHICS CODE) RULES, 2021
The Ministry of Electronics and Information Technology (“MeitY”), on 2nd January 2023, invited public feedback on the proposed draft amendments, in relation to ‘online games’ and ‘online gaming intermediaries’ (“Draft Rules”), to the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 (“IT Rules”). The Draft Rules were proposed right after the notification of the Government of India (Allocation of Business) (Three Hundred and Seventieth Amendment) Rules, 2022 as per which MeitY has been made the nodal ministry for “matters relating to online gaming”.
Some of the key draft amendments proposed by the MeitY to the IT Rules are as follows:
Further, as per the explanation, ‘winnings’ would mean a prize (in cash/kind) distributed/intended to be distributed to a user of an online game based on their performance and in accordance with the rules of the online game, and, the term ‘Internet’ would mean a “combination of computer facilities and electromagnetic transmission media, and related equipment and software, comprising the interconnected worldwide network of computer networks that transmits information based on a protocol for controlling such transmission”
There are certain concerns regarding the Draft Rules that need to be addressed by the MeitY. Firstly, there is no central legislation on online gaming. The Draft Rules seek to regulate online gaming in the absence of a legislative enactment for regulating online gaming. This is a concern since the existing law would in any case prohibit gambling applications/ games of chance. Glaring lack of legislative enactment for regulating online games which are games of skill (both paid/unpaid models) is of significant concern.
Secondly, publishers of games cannot possibly be classified as intermediaries because they curate and publish their own content and do not fall within the legislative definition of what constitutes an intermediary. In the true sense, the term ‘online gaming intermediaries’ would include game stores, such as the Xbox Games Store or the PlayStation Store, and other online mobile app stores. To expect these intermediaries to verify and authenticate users and to undertake due diligence steps, which should ideally be borne by the publishers of online games, will not only be impractical but perhaps unachievable.
Moreover, to expect online intermediaries, such as app stores and game stores, to individually register online games published by third party publishers is not only unrealistic but also goes against the way gaming businesses are structured. The Draft Rules also present the possibility of complicating the relationship between users/subscribers and publishers of online games since the Draft Rules, in their current form, require intermediaries to virtually bypass the gaming publishers while engaging with the users/subscriber of individual online games to comply with the additional due diligence requirements.
The Ministry would also have broad powers to declare any game which is made available on the Internet and accessible by a user through a computer resource, without making any deposit, as an online game which goes beyond the scope of what the Draft Rules seek to regulate.
While the intention behind introducing the Draft Rules is vested in the interest of the end user of an online game, the above noted concerns need further consideration by the MeitY. There is a need for a robust uniform regulatory framework for online games which is balanced and provides the much-needed assurance to the online gaming industry whose fates have mostly been decided by the States under their respective laws.
GOVERNMENT TO HOLD PUBLIC CONSULTATION ON PROPOSED AMENDMENT OF IT RULES WITH RESPECT TO FACT CHECKING MISINFORMATION BY GOVERNMENT AND DUE DILIGENCE BY INTERMEDIARY TO PREVENT SHARING OF FALSE, UNTRUE OR MISLEADING INFORMATION
The Ministry of Electronics and Information Technology (“MeitY”) has invited comments from stakeholders and the general public on an amendment proposed to Rule 3(1)(b)(v) (“proposed amendment”) of the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 (“IT Rules”) with respect to due diligence obligations of social media and other intermediaries regarding fact checking misinformation by Government to prevent sharing false, untrue or misleading information.
The MeitY on 2nd January 2023, had published draft amendments to the IT Rules in relation to online gaming. While granting an extension of time for the public consultation process, the MeitY through a press release also announced a proposed amendment relating to due diligence by an intermediary under Rule 3(1)(b)(v) of the IT Rules.
Rule 3(1)(b)(v) requires social media and other intermediaries to comply with due diligence guidelines by making reasonable efforts to cause their users not to host, display, upload, modify, publish, transmit, store, update or share information which is patently false and untrue or misleading in nature. The amendments now proposed to the Rules expand the applicability of these Rules to “online gaming intermediaries” and proposes to mandate that the due diligence requirements will include taking down information identified as fake or false by the Fact Check Unit of the Press Information Bureau (“PIB”) (https://factcheck.pib.gov.in/ and Twitter handle @PIBFactcheck) as “misinformation or information which is patently false and untrue or misleading in nature”.
The PIB is a department falling under the Ministry of Information and Broadcasting, generally tasked with communicating government policies and news/information pertaining to the Government of India. It appears that the PIB or any other agency authorised by the Central Government will be tasked with “fact checking” or identifying misinformation in respect of any business of the Central Government. As a result of this proposed amendment, intermediaries will be required to take down any post/information identified by the agency authorised by the Central Government under the proposed Rule as constituting misinformation or information which is patently false and untrue or misleading in nature, failing which such intermediary may be unable to rely on the safe harbour defence under Section 79 of the Information Technology Act, 2000 (“IT Act”) for non-compliance of its due diligence obligations as mandated under Section 79(2)(c) of the IT Act.
Fake news has the potential to misinform the public and may even lead to incitement of communal disharmony and disturbance to peace. It is therefore highly desirable that fake news be checked, countered and taken down. However, given that the PIB is part of the Government and not an independent watchdog, concerns about censorship in the guise of fact checking are naturally bound to arise, particularly in a vibrant democracy such as India, with diverse viewpoints. Critical analysis and examination of the government’s policies and actions has been an enduring and healthy aspect of Indian democracy. Therefore, countering fake news while not stifling legitimate criticism of the government may be more effectively done by an independent body.
Previously, the Ministry of Information and Broadcasting had also issued an advisory to private news channels, noting that certain TV news channels have made false claims to incite audiences, and asking TV channels to refrain from airing such content. To that extent, the amendments proposed by MeitY are aligned with the government’s previous actions against fake news. Presently, the Indian Penal Code, 1860, Information Technology Act, 2000 and Disaster Management Act, 2005 contain provisions that criminalize actions tantamount to circulating fake news
Accordingly, while the proposal to take down content that is disproven by fact checking is a welcome one, it may be advisable to mandate an independent body with the task of fact checking, rather than government affiliated bodies as is presently envisaged.
On 9th January, 2023, the Bureau of Indian Standards (“BIS”) established and notified the Indian Standard ‘IS/ IEC 62680-1-3:2022 Universal Serial Bus Interfaces for Data and Power Part 1 Common Components Section 3 USB Type-C Cable and Connector Specification’ (“Standard”) for USB Type C receptacles, plugs and cables.
According to the press release, the Standard is an adoption of the existing International Standard, IEC 62680- 1-3:2022, and provides requirements for USB Type-C ports, plugs and cables for use in various electronic devices like mobile phones, laptops, notebooks etc. Further, the Standard has been established to assist with the Government’s mission to reduce e-waste and move towards sustainable development as it would provide common charging solutions for smartphones and other electronic devices, in turn, reducing the number of chargers per consumer.
The Standard has been established and notified under BIS’s power of establishing Indian Standards under Rule 15 (1) of the Bureau of Indian Standards Rules, 2018 (“BIS Rules”). However, as per Rule 24 (2) of the BIS Rules, the standard is voluntary and will not be binding until it is referred to in a legislation or made mandatory by a specific order of the Government (like the Electronic Goods Compulsory Registration Order).
Presently, no order/legislations have been issued mandating the Standard, however news reports suggest that the USB Type-C is likely to be adopted as the standard charging port in India by March 2025.
While from an environmental standpoint, the potential standardisation of charging ports appears to be a step in the right direction, however, there is a need to carefully assess the long-term and short-term implications of this move and the government must consider other relevant factors prior to the mandatory implementation of this Standard in India. For instance, the European Union, prior to amending its Radio Equipment Directive 2014/53/EU for standardizing chargers, conducted a detailed Impact Assessment and submitted the Impact Assessment Report which carefully investigates and analyses economic, social and environmental impacts in assessing the policy options. Other significant impacts such as impact on consumers’ perspective and convenience, effects on the industry, SMEs, innovation, competitiveness were also analyzed in the report. For example, the report notes that “the environmental impact from the fact that USB Type C cables and connectors are heavier (by 21.6% to Lightning and 237% to USB micro-B) are larger than the reduction from standalones sales of cables”. Therefore, while in the long run, the potential harmonisation of charging solutions is likely to benefit environmentally, it is important that all potential impacts due to the change in this policy are carefully analyzed by the government. A phased out implementation is ideal for the Indian context as most consumers retain their devices (and in turn, the chargers) for longer periods than average.
On 20th January 2023, the Ministry of Consumer Affairs (“Ministry”) released a guide on ‘Endorsement Know-hows!’ for celebrities, influencers, and virtual influencers on social media platforms (“Guide”). The Guide has been introduced to address the issues relating to celebrity endorsements and misleading advertisements through social media platforms. The Guide requires all influencers, celebrities (famous personalities including but not limited to the entertainment and sports industry), and virtual influencers (fictional computer-generated ‘people’ or avatars who have realistic characteristics, features, and personalities of humans, and behave in a similar manner as influencers) that have the power to influence the purchasing decisions of their audience to provide relevant disclosures while endorsing products and services.
The Ministry Press Release to the Guide states that the same are in alignment with the Consumer Protection Act, 2019 (“CPA”), and its allied rules, the Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022 (“Guidelines on Prevention of Misleading Advertisements”), and that any endorsement by influencers/celebrities will have to comply with the same. It is worth noting that this Guide has not been notified by the Ministry under the CPA and therefore does not have the force of the law. However, given the recent scrutiny of the Advertising Standards Council of India and the Ministry over celebrity endorsements we anticipate that the Guide, read with the Guidelines on Misleading Advertisements will be referenced by ASCI and the Central Authority to regulate advertisements.
The Guide has been introduced with the aim of preventing unfair trade practices and misleading advertisements on social media platforms, especially considering the large number of users on these social media platforms that may fall prey to misleading promotions by celebrities and influencers that have some influence on the purchasing decisions of their audience. The Guide, read along with the CPA and Guidelines on Prevention of Misleading Advertisements will likely provide the regulatory framework to regulate celebrity endorsements on online platforms. Further, it appears that the Guide also provides teeth to the Advertising Standards Council of India’s Guidelines for Influencer Advertising on Digital Media.
On 22nd December 2022, the Hon’ble Minister for Industry and Commerce introduced the Jan Vishwas (Amendment of Provisions) Bill, 2022 (“Bill”) which seeks to decriminalise minor offences and rationalise monetary penalties by amending 183 provisions across 42 Acts. The Bill has been referred to a Joint Parliamentary Committee which is expected to submit its report in the upcoming budget session of the Parliament.
The introduction of the Bill is laudatory measure adopted by the Government of India to reduce compliance costs for business enterprises and enhance ease of doing business in India. The process of decriminalisation of minor offences will also have a salutary effect on reduction of cases in our judicial system by establishing an alternative mechanism for expeditious enforcement of various acts by prescribing monetary penalties for such minor offences. The Bill is a recognition by the Government of India of the inherent need to reduce the regulatory and compliance burden on business enterprises by imposing criminal liability only for serious offences and decriminalising procedural lapses which otherwise would have attracted criminal liabilities under the extant law.
Ameet Datta is a Partner at Saikrishna & Associates. He is an IP litigator and TMT lawyer with over 22 years of experience and wide ranging expertise across IP Law, Technology law, privacy and data protection law, white collar crime cases around data breaches, and, media & entertainment law specifically in relation to licensing, content aggregation & acquisition, film & music production, distribution/ licensing, format rights, defamation and right of publicity. Ameet has extensive experience with the creative sector in terms of multiple litigations including licensing disputes before the Courts & the Copyright Board. Ameet is closely involved with Copyright laws, Technology regulations and policy matters. In 2010, Ameet appeared as an expert witness before the Indian Parliamentary Standing Committee overseeing amendments to the Copyright Act, 1957. Ameet has been highly ranked as a recommended lawyer for IP Litigation, and, telecoms, media & entertainment by Chambers & Partners (Asia Pacific), WTR1000; as a recommended lawyer for IP litigation by Legal 500, and recommended as an IP Star by MIP
Suvarna Mandal is a Partner at Saikrishna & Associates. She has nearly a decade of experience in providing trade & regulatory compliance advice to domestic and international clients for understanding and complying with a wide range of national, state as well as sector-specific legislations and regulations in the spheres of telecommunications, technology law, consumer law, environmental law, product compliance and safety regulations (including packaging standards, labels and safety standards), data protection and privacy, media law, advertising regulations, etc. She provides end-to-end compliance counselling to clients across various industries and sectors such as software services, consumer electronics, technology, telecom, media, intermediaries, e-commerce, online value-added services sectors, consumer goods and medical devices. Suvarna also works closely with clients’ Government Affairs team to prepare strategic policy documents, representations and formal communications towards policy development and policy reform efforts with the Government.
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