New social rules make competition harder for smaller players: experts


The new rules for social media intermediaries could increase compliance costs for gamers, making it difficult for small businesses to compete with bigger giants like Facebook, according to industry watchers.

The new rules, announced last week, distinguish between “social media intermediaries” and “major social media intermediaries” with 50 lakh of registered users as the threshold for categorization.

Major social media intermediaries will need to do additional due diligence, including appointing a compliance officer, a nodal contact person and a resident grievance officer – the three officers residing in India .

Big players like Facebook have said they are studying the rules.

While many in the industry have welcomed the new regulations, saying they are aimed at addressing issues such as redressing grievances, fake news and user online safety, part of the industry has voiced concerns. concerns about rising compliance costs that could be difficult for smaller players.

Software Freedom Law Center (SFLC) founder Mishi Choudhary said the rules call for undue burden and compliance and “ensure that only the big players with the funds and the means of big legal teams are the only ones who will be left to provide services “.

“(This could lead to) the increased barrier to entry and increased compliance costs for everyone,” she added.

India has 53 crore of WhatsApp users, 44.8 crore of YouTube users, 41 crore of Facebook users, 21 crore of Instagram users, while 1.75 crore of users are on the platform of Twitter microblogging, according to government data.

While players like Telegram and Signal do not disclose country-specific user numbers, these platforms have seen an increase in downloads in recent weeks due to concerns over the privacy policy update. of WhatsApp which aims to allow the sharing of limited user data with Facebook and its group companies.

Telegram did not respond to questions about the impact of the new rules on the platform.

Industry watchers have noted that players like Telegram and others may not have senior officials based in India and will now need to take a series of steps to ensure new standards are met as they arise. as their business grows and user base grows in India.

Under the amended IT rules, social media and streaming companies will be required to remove contentious content more quickly, appoint grievance officers and assist with investigations.

The “Intermediary Guidelines and Code of Ethics for Digital Media” designed to combat the misuse of social media platforms require actors like WhatsApp, Facebook and Twitter as well as streaming services like Netflix, YouTube and Amazon Prime Video appoint executives to coordinate with law enforcement, disclose the first creator of provocative content, and remove, within 24 hours, content depicting nudity or metamorphosed images of women.

Any contentious content reported by the government or the legal order must be removed within 36 hours.

An industry executive, who declined to be named, said some companies may choose to protect user privacy and challenge those rules in court.

Additionally, the industry believes there needs to be clarity on nuances like how long users must be active to be counted as registered users, and what if a platform goes down. below the threshold of 50 lakh of registered users.

Rameesh Kailasam, CEO of, also warned that while these rules are strong and elaborate, they can result in a certain degree of costs and operational challenges.

Nasscom noted that it is imperative that there be a balance between regulation and innovation as the world is in a phase of accelerating technological change.

The industry body also stressed that there is a need for “responsible use” and development of technology for all stakeholders – government, industry, startups and citizens.

The option of voluntary self-verification of user accounts, the right to receive explanatory notification about the removal or deactivation of access, and to seek redress against actions taken by intermediaries would be useful for end users. , Nasscom said.

The association also said the government stressed that the new rules would not hamper the creativity, or freedom of speech and expression of citizens, urging the government to ensure that this is the “principle design “monitoring during implementation.

(Only the title and image of this report may have been reworked by Business Standard staff; the rest of the content is automatically generated from a syndicated feed.)


About Marjorie C. Hudson

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