Fresh guidelines for the social media intermediaries and OTT platforms

Amid growing concerns around the lack of transparency, accountability and rights of users related to digital media, the Government has introduced the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules 2021 (Rules). These Rules have been framed in exercise of powers under Section 87(2) of the Information Technology Act, 2000. The Rules aim at empowering social media users and ensure that Social Media Intermediaries (Intermediaries) and Over-the-Top (OTT) platforms create a safe environment digitally.

Social Media Intermediaries will fall into two categories – an Intermediary and a Significant Social Media Intermediary. This distinction is based on the number of users on the social media platform, and the government will soon notify the threshold of the user base that will distinguish the two.

Key guidelines for Intermediaries

  • Applicabilty of 'safe harbor' provisions: Intermediaries have to follow the prescribed diligence protocols to ensure applicability of 'safe harbour' provisions. In case these are not followed, the safe harbor provisions (defined under Section 79 of the IT Act, 2000) providing immunity from legal prosecution for any content posted on their platforms, will not apply to them.
  • Mandatory grievance redressal mechanism: The Intermediaries shall appoint a Grievance Officer to deal with complaints and will share the name and contact details of such officers, who shall acknowledge the complaint within twenty four hours and resolve it within fifteen days from receipt.
  • Ensuring online safety and dignity of users: Intermediaries shall remove or disable access within 24 hours of receipt of complaints of content that exposes the private areas of individuals, show such individuals in full or partial nudity or in sexual act or is in the nature of impersonation including morphed images etc. Such a complaint can be filed either by the individual or by any other person on his/her behalf.
  • Additional Due Diligences for the Significant Social Media Intermediaries:
    • Appointments: The Significant Social Media Intermediaries need to appoint a Chief Compliance Officer, a Nodal Contact Person and a Resident Grievance Officer, all of whom should be residents of India.
    • Compliance Report: The Intermediaries need to publish a monthly compliance report mentioning the details of complaints received, action taken on the complaints as well as details of content removed proactively.
    • Enabling identity of the Originator: As per the guidelines, social media intermediaries providing services primarily in the nature of messaging shall enable identification of the first originator of the information.However, this is required only for the purposes of prevention, detection, investigation, prosecution or punishment of an offence related to sovereignty and integrity of India, the security of the State, friendly relations with foreign States, or public order as well as incitement to an offence relating to the above or in relation with rape, sexually explicit material or child sexual abuse material punishable with imprisonment for a term of not less than five years.
    • Removal of unlawful information: An Intermediary upon receiving actual knowledge in the form of an order by a court or being notified by the Government or its agencies through authorized officer should not host or publish any information which is prohibited under any law in relation to the interest of the sovereignty and integrity of India, public order, friendly relations with foreign countries etc.

Key guidelines for OTT platforms

  • Self-classification of content: The OTT platforms shall selfclassify the content into five age based categories- U (Universal), U/A 7+, U/A 13+, U/A 16+, and A (Adult)
  • Parental lock: Platforms would be required to implement parental locks for content classified as U/A 13+ or higher, and reliable age verification mechanisms for content classified as 'A'
  • Display rating: The OTTs shall prominently display the classification rating specific to each content or programme together with a content descriptor informing the user about the nature of the content, and advising on viewer description (if applicable) at the beginning of every programme enabling the user to make an informed decision, prior to watching the programme

Key guidelines for news publishers and digital media

  • News publishers will be required to observe Norms of Journalistic Conduct of the Press Council of India and the Programme Code under the Cable Television Networks Regulation Act 1995, to ensure a level playing field between offline (Print, TV) and digital media
  • Grievance Redressal Mechanism: A three-level grievance redressal mechanism has been established under the rules with different levels of self-regulation
    • Level-I: Self-regulation by the publishers;
    • Level-II: Self-regulation by the self-regulating bodies of the publishers;
    • Level-III: Oversight mechanism.
  • Self-regulation by the publisher:
    • - The publisher shall appoint a Grievance Redressal Officer based in India who shall be responsible for the redressal of grievances received within 15 days
  • Self-regulatory body: There may be one or more selfregulatory bodies of publishers, which shall be headed by a retired judge of the Supreme Court, a High Court or an independent eminent person and have not more than six members; such a body will have to register with the Ministry of Information and Broadcasting and will oversee the adherence by the publisher to the Code of Ethics and address grievances that have not been resolved by the publisher within 15 days
  • Oversight mechanism: The Ministry of Information and Broadcasting shall formulate an oversight mechanism and publish a charter for self-regulating bodies, including Codes of Practices, in addition to establish an Inter-Departmental Committee for hearing grievances

These Rules are an important step towards creating a safe space for consumers of digital media. On the flip side, there are concerns that the Rules give the Government stricter control over the content being provided online, which might lead to censorship. Additionally, it is unclear as to how OTT platforms are expected to practically redress grievances from different users perspectives – some content is perceived as offensive by a certain section of public while being popular amongst another section. Despite these concerns, it is a laudable step by the Government and will help ensure cyber safety for consumers.

Startup India Seed Fund Scheme

The Startup India Seed Fund Scheme (Scheme) was announced about a month back, and is the Indian government's key initiatives to strengthen the startup eco-system at the grassroots level. It is expected to be implemented with effect from April 1, 2021. As the name itself suggests, it intends to create a growth environment at the seed funding level itself. Taking into account the country's entrepreneurial culture, this would be welcome by young companies who aspire to be future unicorns.

Key features of the Scheme

  • Intent: The Scheme intends to not only provide seed funding to start ups but also to create an environment of growth, guidance and accountability. This factors in that while startups need funding, but they also need an eco-system where they are able to best use those funds for the proof of concept that they wish to cater to. Of course, it is well acknowledged under the Scheme that not all start ups would be successful.
  • Structure: The Scheme is under the aegis of the Department for Promotion of Industry and Internal Trade (DPIIT), under the Central government's Ministry of Commerce and Industry. Instead of direct funding to start ups, it adopts an incubator model, whereby a panel of incubators receive funds and are responsible for meaningful and permitted disbursal to the selected start ups that are rostered with them. The Incubators themselves would also receive a management fee. The Scheme also intends to frame an expert advisory committee that would not only be in-charge of overall implementation and monitoring of the Scheme, but also selecting the eligible incubators for the Scheme through an open application system. This committee would have experts largely from government bodies and departments. The selected incubators would themselves form an incubator seed management committee, that would be responsible for selecting start ups from an open application system. This committee would be constituted through a mix of incubator representatives, government nominee, domain and industry experts, and successful entrepreneurs.
  • Corpus: The Scheme contains some key conditions around drawdowns and fund utilisation at both incubator and start up levels, with a view to ensuring meaningful utilisation of finances. The overall size of the corpus is intended to be close to INR 95 million.
  • Eligibility: The Scheme outlines detailed eligibility criteria for both start up applicants as well as incubator applicants. For startup applicants, special preference is intended to be given to certain sectors, such as education, agriculture, food processing, biotechnology and healthcare, among others. Among various important criteria for startups, a few that need mentioning are:
    • The startup has to not be more than 2 (two) years old at the time of application and recognised as a start up by the DPIIT
    • Indian promoter shareholding in the start up would have to be at least 51%
    • The startup has to not be more than 2 (two) years old at the time of application and recognised as a start up by the DPIIT
    • Indian promoter shareholding in the start up would have to be at least 51%
    • It would need a business idea for a product/service with market fit, viable commercialisation and scope of scaling up
    • Use of technology should be at its core
    As far as incubators are concerned, few of the notable criteria are:
    • The incubator does not have to be a company but could also be a society (registered under the Societies Registration Act), 1860; a trust (under the Indian Trusts Act, 1882) or even a statutory body created under an act of legislature, which should have been in existence for at least 2 (two) years at the time of applying
    • It should have the capacity to seat at least 25 (twenty five) people and at least 5 (five) start ups undergoing physical incubation at the time of application
    • It should have a full time chief executive officer experienced in business development and entrepreneurship with a capable team to mentor and support startups
    • It should be disbursing funds from any third party private entities.

In conclusion

On first blush, the size of the corpus and the tranches that an incubator or start up receives may not appear large. However, one must factor in that this could act as proof of concept for the DPIIT itself, allowing it to fine tune structures and models before it commits and deploys a larger corpus. On the positive side, the government committing to strengthening startups at seed level should make not just startups and incubators happy but also the private funding value chain, as it creates a wider pool of attractive startups (which have grown under mentorship and funding through a government set up) for them to invest into and take to the next level – starting at pre-series A level, right through to unicorn and decacorn stages.

The Tribunals Reforms (Rationalization and Conditions of Service) Bill, 2021

The Government of India has proposed the Tribunals Reforms (Rationalization and Conditions of Service) Bill, 2021 (Bill), to amend the Finance Act, 2017, in order to dissolve certain appellate bodies and transfer their functions (such as adjudication of appeals) to other existing judicial bodies.

In 2015, the Government started the process of streamlining existing Tribunals. Under the Finance Act, 2017, the Government merged or abolished 7 Tribunals with the existing Tribunals based on the type of the work performed by them, which led to a decrease in the number of Tribunals from 26 to 19. It also empowered the central government to notify rules on qualifications of members, terms and conditions of their service, and composition of a search-cum-selection committee for 19 Tribunals. The 2021 Bill further amends the Finance Act, 2017 to include provisions related to the composition of the search-cumselection committee, and term of office of members in the Act itself.

The following are the key takeaways from the Bill:

  • The Government proposes to abolish the following Tribunals:
    • Authority for Advance Rulings under the Customs Act, 1962
    • Intellectual Property Appellate Board (IPAB) which deals with all Intellectual Property Laws and,
    • The Film Certification Appellate Authority under the Cinematograph Act, 1952

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