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Appellate bodies must for India’s complex digital ecosystem. But there are many hurdles

Their capacity to handle complaints needs to be increased, and they need to have subject-area expertise to deal with nuanced issues.

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Indian digital governance recently witnessed multiple developments in its appellate mechanisms. In December 2022, Google appealed two of the most significant antitrust decisions that the Competition Commission of India, or CCI, issued on the functioning of digital markets.

In October 2022, CCI found Google anti-competitive in its Android licensing contracts and app store policies in two separate orders. The National Company Law Appellate Tribunal (NCLAT), an authority for company law, competition law, and insolvency law matters, will hear Google’s appeals from 15-17 February. Simultaneously, the Ministry of Electronics and Information Technology (MeitY) recently announced the formation of three Grievance Appellate Committees (GACs) to enforce the accountability of online intermediaries. These events offer an opportunity to examine the efficacy of such appellate mechanisms.

Importance of appellate jurisdiction

Regulatory frameworks stand on three pillars. These include a governing law, an empowered regulator and a fair appeals mechanism. An appellate mechanism is a critical part of this framework because it ensures an opportunity to remedy inappropriate application of governing laws. Therefore, if the framework is incapacitated, there will be an unfair application of law, which defeats the purpose of the legislation. This incapacity can take two forms—insufficient subject area specialisation and limited bandwidth of the appellate mechanism to carry out such a process. These are particularly problematic in the case of complex digital ecosystems.

The Competition Appellate Tribunal (COMPAT), a dedicated court for antitrust appeals, was dissolved along with eight other tribunals in a spate of judicial rationalisations in 2017. Its powers were merged with the NCLAT without a commensurate expansion in the latter’s capacity. Simultaneously, approximately 50 per cent of CCI decisions were appealed to the NCLAT over the last couple of years—a non-trivial antitrust workload! This demands specialisation, whereas the qualification criteria to become an NCLAT member does not mandate experience in competition matters.

Conversely, COMPAT had three members who exclusively dealt with competition issues. The Parliamentary Standing Committee on Finance has also recommended drafting a Digital Competition Act to curb anti-competitive behaviour, which is likely to increase digital markets-related appeals to the NCLAT. Ensuring the tribunal has the requisite capacity to dispense with such cases cannot remain an afterthought.

Appellate bodies operate under a specialised mandate, which allows them to adapt their processes to the unique facets of a case. They are an essential tool for digital markets, which tend to be more complex than first meets the eye. For instance, Google allows Android users to bypass the Play Store and directly install apps from the internet – known as sideloading. But when they do so, Google issues disclaimers about associated security risks linked to downloads from unknown sources. The CCI’s order on Android calls such disclaimers anti-competitive because they reinforce Google’s monopoly over app distribution. However, in their absence, the onus of secure downloads is on users and not the operating system, which is a lot to expect in terms of user awareness. Google has appealed the order before NCLAT, which may find it challenging to analyse such nuances without dedicated competition and digital markets expertise.

Also read: Guidelines on online gaming a self-regulation template. But iron out 5 complexities

GACs not equipped to deal with grievances

Similarly, the recently formed Grievance Appellate Committees do not seem equipped to deal with the barrage of user grievances linked to online intermediary services. In October 2022, Facebook received 703 complaints, Twitter 723 and WhatsApp 701. WhatsApp then banned 2.3 million accounts. And this does not even account for all other types of online intermediation, such as e-commerce intermediaries.

The government intends for GACs to develop and serve as online dispute resolution mechanisms for intermediaries under the Information Technology Act 2000. Online content is accessible by millions instantly, and the longer unlawful content is accessible, the greater the harm to affected parties. Accordingly, a 30-day disposal period for the appeals to the GAC has been mandated. However, any dispute resolution process involves multiple steps. This includes filing a complaint, which, in the case of GACs, consists of an appeal, notification of its acceptance, time for the opposite party to respond to it, hearing of parties’ counter-arguments, potentially hearing witnesses and expert opinions, and arriving at a decision.

The principles of natural justice also require the originator of the disputed content to be heard. Therefore, when they’re implicated along with intermediaries and complainants, it prolongs the dispute resolution process. The Centre has announced three different GACs led by the IT, Home Affairs, and Information and Broadcasting ministries. However, the sheer volume of online user content suggests that GACs may struggle to substantially resolve these grievances in time.

Effective appeals mechanisms form an integral part of the digital governance toolkit. India has a progressive adjudicatory system that recognises the need for specialised appellate mechanisms, but its potential requires actualisation. Mandating competition expertise requires an amendment to the NCLAT qualification criteria, enshrined in Section 409 of the Companies Act 2013. Legislative exercises like the proposed Digital India Act are also an opportunity to address capacity deficits in regulatory frameworks. The appellate mechanism must be strengthened for any technology policy reforms to succeed. Otherwise, regulating digital ecosystems will lack nuance and hinder robust governance.

Lalantika Arvind works at Koan Advisory Group, a technology policy consulting firm. Views are personal.

This article is part of ThePrint-Koan Advisory series that analyses emerging policies, laws and regulations in India’s technology sector. Read all the articles here.

(Edited by Zoya Bhatti)

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