What Twitter, Facebook & social media firms could stand to lose if they miss IT Rules deadline

IT Act provides social media companies protection from liability for third party content on their websites. But companies must comply with govt's deadline for new IT rules, which ends today.

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New Delhi: The deadline for social media platforms like Twitter, Facebook and Instagram to comply with the requirements listed under the new Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules 2021 ends Tuesday. The central government has warned that it will take action against companies if they do not comply with the new guidelines, citing Rule 7 of the 2021 Rules.

Rule 7 states that if any intermediary fails to comply with the guidelines, the provisions of Section 79(1) of the Information Technology Act 2000 shall not apply to such an intermediary, making them liable for punishment under any law in India, including criminal prosecution under provisions of the IT Act and the Indian Penal Code.

Section 79 of the IT Act codifies the Indian ‘safe harbour’ regime, providing them protection against liability for content posted on their websites by third parties. The 2021 Rules impose new responsibilities on internet intermediaries seeking to enjoy the legal immunities offered by Section 79.

While it is unclear whether the rules can revoke legal protection granted to such intermediaries by the Parliament through a law, ThePrint explains what this protection is and how the new rules affect it.

Safe harbour

Section 79 is modelled on the US’ Section 230 of the Communications Decency Act, and is intended to immunise online platforms against liability arising out of third party content on their platform, in the absence of any ‘actual knowledge’ of its unlawfulness.

The current definition of intermediaries includes telecom service providers, network service providers, internet service providers, web-hosting service providers, search engines, online payment sites, online-auction sites, online-marketplaces, and platforms such as Facebook, Twitter, Blogspot and WordPress.

Section 79 says that subject to a few conditions, “an intermediary shall not be liable for any third party information, data, or communication link made available or hosted by him”. It therefore grants them protection from legal liability that could arise from any action of users that is considered illegal, according to the IT Act or any other law.

However, among other conditions, Section 79 also makes it clear that the protection will be available only if the intermediary “observes due diligence while discharging his duties under this Act and also observes such other guidelines as the Central Government may prescribe in this behalf”. The protection also doesn’t apply if the intermediary has “conspired or abetted or aided or induced, whether by threats or promise or otherwise in the commission of the unlawful act”.

The section further clarifies that once an intermediary receives “actual knowledge” or is notified by the government or its agency that any information or data transmitted by the intermediary is being used for an unlawful act, it should remove or disable access to such material.

Why a safe harbour was needed

The fact that an intermediary could be exposed to a liability became evident after the famous case involving Bazee.com in 2004.

In November 2004, an obscene MMS video was listed for sale on the website, Bazee.com, which is now a subsidiary of the e-commerce site eBay. Among others, CEO of the website Avnish Bajaj was arrested and chargesheeted in the case.

Bajaj challenged the proceedings against him, contending that he could not be personally held liable for the listing, and that the MMS was transferred directly between the seller and buyer without the intervention of the website. While Bajaj was subsequently acquitted, the case brought forth the concerns related to intermediaries, with the industry appealing to the government for changes in the law to grant them adequate protections.

In response, the Information Technology (Amendment) Act 2008 amended Section 79 of the IT Act to provide safe harbour protection to intermediaries, such as this website, from the penalties under the Act or any other law for content available on its platform by third parties.

How the new rules shake things up

The new Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules 2021 require all ‘significant social media intermediaries’, which refers to social media companies that have more than 50 lakh users in India, to comply with a host of obligations within three months.

Social media intermediaries include messaging platforms such as WhatsApp, Signal and Telegram, as well as social media platforms like Facebook, Twitter and Instagram. This three-month period ended on 25 May.

Under the 2021 Rules, the intermediaries are required to appoint a resident grievance officer, a chief compliance officer and a nodal contact person within three months. All three of these officers are legally required to reside in India.

These intermediaries are also required to publish monthly compliance reports of action taken in respect of grievances received by the grievance officer.

Furthermore, they need to have a physical contact address in India, prominently published on its website or mobile app. The rules also provide reduced timelines for takedown of content and for providing assistance to government agencies.

A more controversial rule requires significant social media intermediaries — primarily those providing messaging services — to enable tracing of the originator of information on their platform if required by a court of competent jurisdiction or a competent authority under Section 69 of the IT Act. The provision has been criticised because it holds the power to stop end-to-end encryption. End-to-end encryption is a system of communication where only the communicating users can read the messages and no one else.

Rule 4(2), which includes this requirement, does lay down several conditions on exercise of such a power. Among other things, it clarifies that such an order would be passed only on punishment of offences related to “the sovereignty and integrity of India, the security of the State, friendly relations with foreign States, or public order, or of 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”.

It also clarifies that in doing so, the intermediary would not be required to disclose the contents of any electronic message, any other information related to the first originator or any information related to its other users.

Legal challenges to new rules

The 2021 Rules face at least six legal challenges in three high courts across the country.

The first of such challenges was brought to the Delhi High Court in March this year by the Foundation for Independent Journalism, a non-profit organisation that publishes news portal The Wire; M.K. Venu, the foundation’s director and The Wire’s founding editor, and Dhanya Rajendran, Editor-in-Chief of The News Minute.

The Delhi High Court had issued notice on this petition on 9 March. A day later, the Kerala High Court issued notice on another petition challenging the rules, filed by legal news portal, LiveLaw. It also restrained the Centre from taking any coercive action against LiveLaw under the new rules.

Petitions have also been filed by Quint Digital Media Ltd.— which runs digital news website The Quint — in the Delhi High Court. The Truth Pro Foundation India (TPFI) — the non-profit company that runs independent Kannada news portal Pratidhvani — has also filed a petition in the Karnataka high court.

Another batch of petitions on the issue have been filed by Praveen Arimbrathodiyil, free-and-open-source (FOSS) programmer in the Kerala High Court and by advocate Sanjay Kumar Singh in the Delhi High Court.

(Edited by Rachel John)