LEGAL AND REGULATORY DEVELOPMENTS

Government of India (“GoI”) amended the IT (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 (“Intermediary Guidelines”), adding following new provisions:

As per the amendment to the Intermediary Guidelines, the ‘online games’ are defined as games offered on internet and accessible by a user through a computer resource or an intermediary. Similarly, an ‘online gaming intermediary’ is an intermediary that enables the users of its computer resource to access one or more online games.

Further, the amendment to the Intermediary Guidelines also includes definition of ‘online real money games’ to mean online games where a user makes a deposit in cash or kind with the expectation of earning winnings on that deposit.

The amendment to the Intermediary Guidelines requires that the online gaming intermediary must ensure that no advertisement or surrogate advertisement or promotion of an online game, that is not a permissible online game, is hosted on its platform.

‘Permissible online games’ are permissible online real money game or any other online game that is not an online real money game, and ‘permissible online real money games’ are online real money game verified by an online gaming self-regulatory body.

The amendment to Intermediary Guidelines also provide for additional obligations on online gaming intermediary that enables the users to access any permissible online real money game.

In addition to obligations prescribed for significant social media intermediary, an online gaming intermediary that enables the users to access any permissible online real money game must –

Further, for verification of permissible online real money games, the GoI may notify multiple self-regulatory bodies, which shall be representative of online gaming industry. The online gaming self-regulatory body may declare online real money game as a permissible online real money game if it is satisfied that the online real money game does not involve wagering on any outcome and the online gaming intermediary is in compliance with the provisions of Intermediary Guidelines.

This amendment was brought after GoI amended the Government of India (Allocation of Business) Rules in 2022, and the matters relating to online gaming and e-Sports were assigned to Ministry of Electronics and Information Technology and the Ministry of Youth Affairs and Sports, respectively.

The GoI amended the Central Goods and Services Taxes Act, 2017 (“CGST Act”) and Integrated Goods and Services Act, 2017 (“IGST Act”), vide Central Goods and Services Tax (Amendment) Act, 2023 (“CGST Amendment Act”) and the Integrated Goods and Services Tax (Amendment) Act, 2023 (“IGST Amendment Act”) on 18 August 2023, effectively from 01 October 2023, to provide clarity on the taxation of supplies in casinos, horse racing and online gaming.

Under the CGST Amendment Act, ‘online gaming’ is defined as

“offering of a game on the internet or an electronic network and includes online money gaming”; and ‘online money gaming’ is “online gaming in which players pay or deposit money or money's worth, including virtual digital assets, in the expectation of winning money or money's worth, including virtual digital assets, in any event including game, scheme, competition or any other activity or process, whether or not its outcome or performance is based on skill, chance or both and whether the same is permissible or otherwise under any other law for the time being in force”.

Further, the CGST Amendment Act has added betting, casinos, gambling, horse racing, lottery and online money gaming under the definition of ‘specified actionable claim’ under Section 102A of the CGST Act and created a separate class.

In Section 24 of the CGST Act dealing with “Compulsory registration in certain cases”, an additional clause for “supply of online money game from a place outside India to a person inside India” has been added. Effectively, registration has also been made mandatory for every person supplying online money gaming from a place outside India to a person in India.

The CGST Amendment Act further states that “the amendments made under this Act shall be without prejudice to provisions of any other law for the time being in force, providing for prohibiting, restricting or regulating betting, casino, gambling, horse-racing, lottery or online gaming.” 

Under the IGST Act, an amendment to the definition of “online information and database access or retrieval services” has been brought wherein the sub-clause (vii) dealing with online gaming, has been substituted which “online gaming, excluding the online money gaming as defined in CGST Act”.

Further, the IGST Amendment Act inserted Section 14A dealing with “Special provisions for specified actionable claims supplied by a person located outside taxable territory”. Section 14A deals with supplier of online money games, and adopts the definition of ‘supplier of online money games’ from the CGST Act. It, further, requires that the supplier of online money gaming must obtain a single registration under the Simplified Registration Scheme under the IGST Act.

The IGST Amendment Act also requires suppliers of online money gaming outside India to comply with the provisions of IGST Act, failing which the information generated, transmitted, received or hosted in any computer resource used for supply of online money gaming by such supplier shall be liable to be blocked for access by the public.

The Cinematograph (Amendment) Act, 2023 (“Cinematograph Amendment Act“) was introduced with following amendments: (a) prohibition of unauthorized recording and prohibition of unauthorised exhibition of films; and (b) to improve procedure for certification of films for public exhibition by the Central Board of Film Certification (“CBFC”), and improve categorisations of the certifications of the films.

The Cinematograph Amendment Act also introduced age-based categories of certification by further sub-dividing the existing UA category into three age-based categories, viz. seven years (UA 7+), thirteen years (UA 13+), and sixteen years (UA 16+), instead of twelve years. The Cinematograph Amendment Act replaced the 10 (ten) year validity of certificates issued by the CBFC for movies, to be valid perpetually.

The Cinematograph Amendment Act restricted GoI’s scope in interfering with the CBFC by omitting Section 6(1) of the Cinematograph Act, 1952, dealing with ‘Revisional power of the Central Government’. Finally, new provisions, under Section 6AA and Section 6AB of the Cinematograph Act, 1952 have been introduced with violation to be punished with strict penal provisions. Section 6AB of the Cinematograph Amendment Act prohibits the use and/ or facilitation of infringing copies for public exhibition for profit at unlicensed venues.  Section 7(1B)(ii) empowers the GoI to take action against exhibition or hosting of infringing copies. GoI has also appointed nodal officers to tackle online piracy. The original copyright holder may make a request before the nodal officer to take-down the infringing content and the platform is required to take-down/ remove the content within 36 hours of the receipt of the directions of the nodal officer.

The Cinematograph Amendment Act also provides for stricter penalties for piracy – with imprisonment between three months to three years along with a penalty of INR 300,000 and which could extend up to 5% of audited gross production cost.

Ministry of Information and Broadcasting (“MIB”) issued a notification introducing key amendments to the Cable Television Network Rules, 1994 (“Cable TV Rules”) in September 2023. The amendment to the Cable TV Rules introduced a procedure for the renewal of Multi-System Operator (“MSO”) Registrations.

Under the amendment to the Cable TV Rules, MSOs may apply for the registration or renewal of registration online at the Broadcast Seva Portal of MIB. MSO Registrations may also be granted or renewed for a period of ten years. Under the amendment to the Cable TV Rules, an enabling provision has been inserted for cable operators allowing sharing of infrastructure with broadband service providers.

MIB, vide notification 05 October 2023, also amended Cable TV Rules vide the Jan Vishwas (Amendment of Provisions) Act, 2023 providing the operational mechanism for implementation of the decriminalized provisions of the Cable Television Networks (Regulation) Act, 1995 (“Cable TV Act”).

Section 16 of the Cable TV Act dealt with the punishment for contraventions under any of its provisions, providing for imprisonment which might extend up to 2 years, in case of first instance and 5 years for every subsequent offence. The imprisonment provisions have been now replaced with the substituted Section 16 of the Cable TV Act, wherein now monetary penalty and other non-monetary measures like Advisory, Warning and Censure will be levied in case of contravention of the Cable TV Act.

These measures will be enforced through the “designated officer” which was added vide the Cable Television Networks (Second Amendment) Rules, 2023.

MIB issued an advisory directing all private satellite television channels broadcasting programmes to adhere to the Programme Code prescribed under the Cable TV Act on 08 June 2023. This was pursuant to a concern raised by the National Commission for Minorities about wrongful portrayal of an incident by media which took place in Dharamshala on 28 February 2023 involving His Holiness Dalai Lama and a child.

MIB also issued an advisory on 21 September 2023 directing all private satellite television channels broadcasting programmes to adhere to Section 20 of the Cable TV Act, which lays down the circumstances and conditions under which the GoI may, by order, regulate or prohibit transmission/retransmission of any television channel or programme in public interest, or when it is considered necessary and expedient to issue such orders in the interest of the sovereignty and integrity of India, security of state, friendly relations of India with any foreign state, or public order or decency or morality.

The Central Consumer Protection Authority (“CCPA”) notified the Guidelines for Prevention and Regulation of Dark Patterns, 2023 (“Dark Pattern Guidelines”). The Dark Pattern Guidelines define “dark patterns” under Regulation 2(e) as ““practices or deceptive design pattern using user interface or user experience interactions on any platform that is designed to mislead or trick users to do something they originally did not intend or want to do, by subverting or impairing the consumer autonomy, decision making or choice, amounting to misleading advertisement or unfair trade practice or violation of consumer rights.”

The Dark Pattern Guidelines provides under Regulation 3 that it shall apply to all platforms, systematically offering goods and services in India; advertisers; and sellers. The Dark Pattern Guidelines prohibits any person, including any platform, to engage in any dark pattern practice. The dark pattern Guidelines, further, provides that any person, including any platform, shall be considered to be engaging in a dark pattern practice if it engages in any practice specified in Annexure 1 of Dark Pattern Guidelines. Annexures 1 under the Dark Pattern Guidelines provides the following categories:

MIB appointed two Self-Regulatory Body under the Intermediary Guidelines: Journalists and Media Association Grievance Council (“JMAGC”) for publishers of news and current affairs; and Digital Media Content Regulatory Council (“DMCRC”) for publisher of online curated content.

There are five members in JMAGC, viz. former judicial member from District Court, Kerala; senior journalist, advocate at Kerala High Court; and two members from Journalists & Media Association. In the DMRC, there are a total of nine members, viz. Disney+Hotstar, SonyLiv, Voot, Zee5, Discovery+, Manorma Max, SunNXT, YuppTv, and Neestream.

MIB issued a clarification letter to the publishers of OTT platforms discussing the applicability of Foreign Direct Investment (“FDI”) Policy of GoI for OTT platforms. MIB received several representations from Chambers of Commerce and OTT platforms seeking clarification if Department for Promotion of Industry and Internal Trade’s Press Note 4 of 2019 dated 18 September 2019 (“Press Note 04 of 2019”), providing for FDI up to 26% under Government approval route for entities involved in uploading/streaming of news and current affairs through digital media would apply to OTT platforms which are hosting digital feed of the news channels.

In the representations, OTT platforms stated that they only provide a platform for carriage of third-party news and current affairs content of news channels on ‘as is basis’ without any editorial intervention. Further, OTT platforms are not involved in any aggregation or curation of the news and current affairs content provided by such channels, but are only hosting the news feed provided by such entities.

MIB clarified that OTT platforms are not subject to Press Note No. 04 of 2019, as OTT platforms are hosting digital feed of a television news channel only as a medium, making it available to its subscribers and users.

Ministry of Health and Family Welfare has notified Cigarettes and other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Amendment Rules, 2023 (“Cigarettes and Tobacco Amendment Rules”) on 31 May 2023. The Cigarettes and Tobacco Amendment Rules requires the publishers of OTT platforms to comply with specific guidelines relating to display of health sports, message and disclaimer in content on OTT platforms displaying tobacco products or their use.

The Cigarettes and Tobacco Amendment Rules have inserted Section 11 to the Cigarettes and Other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Rules, 2004, which provides for “Health spots, message and disclaimer in online curated contents of tobacco products by the publisher”.

As per the Cigarettes and Tobacco Amendment Rules, every publisher of online curated contents displaying tobacco products or their use shall display anti-tobacco health spots, of minimum thirty seconds duration, anti-tobacco health warning as a prominent static message at the bottom of the screen during the period of display of the tobacco products, and an audio-visual disclaimer on the ill-effects of tobacco use, of minimum twenty seconds.

The Cigarettes and Tobacco Amendment Rules also define “online curated content” to mean “any curated catalogue of audio-visual content, other than news and current affairs content, which is owned by, licensed to, or contracted to be transmitted by a publisher of online curated content, and made available on demand, including but not limited through subscription, over the internet or computer networks, and includes films, audio visual programmes, documentaries, television programmes, serials, series, podcasts and other such content”; and “publisher of online curated content” to mean “a publisher who, performing a significant role in determining the online curated content being made available, makes available to users a computer resource that enables such users to access online curated content over the internet or computer networks, and such other entity called by whatever name, which is functionally similar to publishers of online curated content but does not include any individual or user who is not transmitting online curated content in the course of systematic business, professional or commercial activity.”

The Cigarettes and Tobacco Amendment Rules have also constituted an inter-ministerial committee consisting of representatives from the Ministry of Health and Family Welfare, MIB and Ministry of Electronics and Technology (“MeitY”), to take action against publishers of online curated content in case of failure to comply with the Rules.

MIB issued an advisory dated 09 November 2023 notifying the Digital Advertisement Policy, 2023 (“Digital Advertisement Policy”). The Digital Advertisement Policy enables the Central Bureau of Communications (“CBC”), which is the advertising wing of the GoI, to expand the digital outreach of GoI and improve information dissemination and feedback pathways between GoI and its citizens.

The Digital Advertisement Policy recognizes that digital modes of communication are becoming more important compared to traditional modes of communication, and allows to target advertisements at their potential audience pool with greater precision and at any time of day and allows more interactive and engaging content dissemination compared to the traditional vehicles.

The Digital Advertisement Policy enables CBC to expand the digital outreach of GoI and improve information dissemination and feedback pathways between the Government and Citizens. CBC is also empowered to on board innovative and futuristic platforms in the digital space with the approval of a duly constituted committee.

The Digital Advertisement Policy introduces competitive bidding for rate discovery, ensuring transparency and efficiency. Rates discovered through this process will remain valid for three years and will be applicable to all eligible agencies.

GoI issued an advisory dated 07 November 2023 to significant social media intermediaries to ensure that due diligence is exercised and reasonable efforts are made to identify misinformation and deepfakes, and in particular, information that violates the provisions of rules and regulations and/or user agreements.

The advisory is also focused to ensure that such cases are expeditiously actioned against, well within the timeframes stipulated under the Intermediary Guidelines. Further, the aim is also to remove any such content when reported within 36 hours of such reporting and ensure expeditious action, and disable access to the content / information.

Further, MIB has addressed the suggestions made by the Parliamentary Standing Committee on Communication in its report on “Ethical Standards in Media Coverage”. While one of the suggestions by the Parliamentary Standing Committee was the creation of a unified media council to govern all media, including electronic and digital media, MIB responded by stating that adequate mechanisms for regulating all media currently exists under the Press Council Act, 1978, the Cable TV Act and the Information Technology Act, 2000 (“IT Act”). However, a unified council is not desirable due to the unique characteristics of each form of media.

TRAI notified the Telecommunication (Broadcasting and Cable) Services Interconnection (Addressable Systems) (Fifth Amendment) Regulations, 2023 vide notification 14 September 2023 (“Interconnection Amendment”). The Interconnection Amendment seeks to create an enabling, technology neutral, light-touch regulatory regime, which facilitates growth and technological developments while protecting the consumer’s interest is promoted to foster overall growth.

A new schedule (Schedule X) has also been added to the Regulations which establishes Digital Rights Management (DRM) System Requirements in so far as they relate to subscriber management systems (“SMS”) for Internet Protocol Television (“IPTV”) services, for conditional access by subscribers and encryption for IPTV services, fingerprinting for IPTV services, and unique consumer subscription.

The Advertising Standards Council of India (“ASCI”), which is a self-regulation council for advertisers, media, advertising agencies and other professional/ ancillary services connected with advertising practices , has introduced numerous guidelines relating to content broadcasted/ displayed during an advertisement.

It has introduced the following guidelines:

Guidelines for qualification of brand extension – product or service: These guidelines are introduced to evaluate the genuineness of an unrestricted product, or service brand extension of a product (e.g., liquor and tobacco) whose advertising is prohibited by law.

Guidelines for advertising of educational institutions, programmes and platforms: The advertising of educational institutions such as universities, colleges, schools, coaching classes, Edtech platforms, etc., have an impact on the minds of growing children and vulnerable parents. Hence, additional guidelines have been issued.

Guidelines for disclaimers made in supporting, limiting, or explaining claims made in advertisements: These guidelines suggests that certain claims must be appropriately explained to ensure that consumers with average intelligence are not misled, nor deceived by means of implications or omissions. These guidelines apply to only disclaimers linked to product claims.

Guidelines for celebrities in advertising: These guidelines are developed so

that the advertiser is guided to produce and release appropriate advertisements

featuring celebrities in it. These guidelines focus on advertisements featuring celebrities or celebrity endorsements.

Guidelines for influencers advertising in digital media: The guidelines define “Influencer” to mean “An Influencer is someone who has access to an audience and the power to affect their audiences’ purchasing decisions or opinions about a product, service, brand or experience, because of the influencer’s authority, knowledge, position, or relationship with their audience” and “Virtual Influencer”) to mean “Virtual influencers, are fictional computer generated ‘people’ or avatars who have the realistic characteristics, features and personalities of humans, and behave in a similar manner as influencers”. It also defines “Digital Media” to mean “a means of communication that can be transmitted over the internet or digital networks, and includes communication received, stored, transmitted, edited or processed by a digital media platform.” The definition further states that digital media includes internet; on-demand across platforms; mobile broadcast, communication content, websites, blogs, digital tv, etc.; non-standard television; digital delivery home entertainment; digital terrestrial television.

All advertisements require disclosure if there is a – material connection between advertiser and influencer; anything of value given to mention or talk about a product; and if evaluation are unbiased or fully originated by influencer, so long as there is a material connection between the advertiser and influencer.

Guidelines for advertisements for charitable causes: Charities advertise over digital media with an intent to nudge donors to contribute, but sometimes such posts may cause undue distress to ordinary consumers who may be surfing through their news feeds. The intent of these guidelines is to prevent the same so that the charities do not overstep the mark by misleading consumers or causing unjustified distress.

New Broadcasting Services (Regulation) Bill, 2023 to be introduced replacing Cable TV Act

MIB issued the Draft Broadcasting Services (Regulation) Bill, 2023 (“Broadcasting Bill”), repealing the Cable TV Act.

The Explanatory Note to the Broadcasting Bill explains that since the present legislation, viz. the Cable TV Act only regulates the cable operators, the new broadcasting services providers like OTT, IPTV, etc., which emerged with the advent of new technologies and platforms, were majorly regulated by different guidelines and frameworks, drawing powers from the Indian Telegraph Act, 1885, the Cable TV Act and/or other relevant laws.

The Broadcasting Bill provides a legal framework for broadcasting network providers, like local cable operators, Direct-to-Home (DTH), IPTV, MSO, Headend-in-the-sky (HITS), OTT, radio broadcasting services and territorial broadcasting network operators. Under the Broadcasting Bill, no broadcasting network providers/ broadcasting service providers can provide services unless they are registered.

The Broadcasting Bill has classified the broadcasting services in four broad categories:

The Broadcasting Bill a ‘Program Code’ and ‘Advertising Code’ for broadcasting service providers and broadcasting network providers. Different advertising code shall be prescribed by the GoI through linear broadcasting services, on-demand broadcasting services, radio broadcasting services and other category of services.

To ensure that the broadcasting service providers and broadcasting network providers comply with the program code and advertisement code, the Broadcasting Bill also constituted a three-step regulatory structure. It shall consists of:

The Broadcasting Bill also requires the service providers to set up a Content Evaluation Committee (“CEC”) for self-certification of the content. The broadcasting service providers and broadcasting network providers shall only broadcast such content which is duly certified from the CEC. Further, a new mechanism for self-classification of content based on the context, theme, tone, impact and target audience, the guidelines for which will be introduced by GoI. Furthermore, for content which is classified as appropriate for restricted viewing, the operators will have to implement certain access control measures.

Author: Rahul Goel and Anu Monga