Here's Why Social Media Platforms In India Might Have To Comply With The IT Rules

Here's Why Social Media Platforms In India Might Have To Comply With The IT Rules
Research Live

It has not been a good few years for social media in India. Being the country with one of the highest number of internet shutdowns, Indian authorities have made its stance with social media platforms quite evident –– to regulate its content in a way that ticks all the boxes that benefit and aid the government.

What has been happening?

As of 25 May, 2021, there is another threat that stands against ‘significant’ (more than 50 lakh users in India) social media companies. In February of this year, the Ministry of Electronics and Information Technology (MeITY) announced guidelines that required them to appoint the following:

  • Chief Compliance Officer
  • Nodal Contact Person
  • Resident Grievance Officer

Why is it a problem?

Instagram and Twitter have not appointed officials for any of these positions, just a day away from the deadline. Closer to the deadline, Facebook announced that it aims to comply with the IT rules put in place by the Indian government.

Whatsapp, a Facebook unit, has brought to light a separate IT rule that they believe tarnishes some of their fundamental policies. The platform has filed a lawsuit in Delhi against the Indian government, stating that the expected IT rule of ‘identifying the first originator of information when authorities demand it’ violates the privacy of the users. This comes as a slight surprise considering Facebook has been under the radar for privacy concerns for quite some time now, but its subsidiary Whatsapp is going to battle for the same.

What is supposed to happen if they do not comply in time?

The platforms may lose their protection granted to them under Section 79 of the Information Technology Act –– they will no longer have immunity from legal prosecutions based on the content on their platform.

A source from the IT Ministry told The Indian Express, “They will then be criminally liable if any untoward incident happens or some unlawful and illegal content is shared over their platform.”

What happens now?

Two things that must be kept in mind here are: (A) the Indian government’s stubborn nature to get what they want, and (B) the fact that these platforms need the Indian market to stay significantly profitable, maybe even afloat.

Hootsuite reported that between October 2019 and 2020, Instagram in India saw a 20 per cent growth in its ad audience size –– this is an increase from the existing ~120 million users. A growth of this pace, one that may overtake the US, is undoubtedly an aspect big enough to comply with the IT rules. Facebook, too, has a lot at stake here –– back in October 2020, it invested upwards of INR 40,000 Crores in Mukesh Ambani’s Jio and holds the largest minority share of 9.99 per cent. If Facebook does not comply and opens itself up to vulnerabilities, these deals will possibly tank, and surely, it would make for a great loss for owner Mark Zuckerberg.

An increase in user engagement and revenue avenues must be looked at, when it comes to these platforms. India is the perfect growth market for this, as it has been for the past few years, which is what led to an increased interest in these companies setting up shop here.

It is important to remember that not complying with these guidelines does not mean that the social media platforms will be shut down –– they will simply lose their IT protection. However, from a business point of view, it is likely that the companies will eventually comply with the guidelines, so as to not risk losing a large chunk of their market share. Given how large and fast-growing the Indian user market is, no company is likely place all its eggs in one basket and answer a solid ‘no’ to the government.

Given the government’s track record, it is safe to assume that the loss that will be experienced by these companies if they eventually do not comply sits at a magnitude large enough to potentially hurt their business –– quite significantly.

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