(Vikram Jeet Singh, Kalindhi Bhatia & Prashant Daga)
The year 2022 was an eventful year for tech businesses. Indian tech companies geared up for increased regulations, at the same time being faced with a reality check on their growth aspirations. But while there are earning pressures on tech business models, rapid digitization continues across all industries. With efficiency once again the byword, tech businesses in India and across with world will need to ‘crystal gaze’ effectively to ensure they spend their time and resources wisely.
With the 2024 national elections looming large, the new calendar year is likely to see a number of the Government’s regulatory measures pushed through. Reforms in regulation to adapt to the needs of dynamic business models and address gaps in existing archaic laws, is a theme you will likely see throughout this year in India. Particularly in the Digital Business space, new laws will arguably impact every business that handles data, Internet intermediaries, telecom services providers, SaaS/CaaS, content broadcasting, online gaming, and online advertising.
After a refreshing start to the year (we hope!), we shuffle through the key developments and trends that will shape 2023.
Data Protection: The draft Digital Personal Data Protection Bill, 2022 (“2022 Bill”) has now been in the public domain since November 2022. Taking note of industry feedback, the Ministry of Electronics and Information Technology ("MEITY") extended the deadline to submit comments on the draft law up to January 02, 2023. Statements from the Ministry indicate that the 2022 Bill may be tabled before the Parliament for consideration during mid-2023 (i.e., June-July). BTG's chapter-wise analysis can be viewed here, and comments submitted to the 2022 Bill incorporating the views of our clients can be accessed here.
Telecom: The draft Telecommunications Bill, 2022 was released for public consultation last year. It met with substantial pushback, particularly on the inclusion of OTT services under the definition of a telecom service. Recent news reports suggest that the Department of Telecommunications has a revised draft in the pipeline, with defined categories of OTT sought to be regulated, clarifying that broadcasting content OTT platforms will not be included under this law. This bill may be tabled before the Indian Parliament sometime soon, again during mid 2023. Read more about this draft law here, and comments submitted to the draft law incorporating the views of our clients can be accessed here.
Online gaming and E-sports: The purview of a Ministry's law-making authority is prescribed as per the President's discretion under the Indian Constitution. For some time now, the online gaming industry has been advocating for uniformity of regulations across the nation. In parallel, the nascent e-sports industry got its day in the sun when Indian Olympics team earned the bronze medal for e-sports. Accordingly, on December 23, 2022, the authority to formulate regulations for 'online gaming' was accorded to MEITY and 'e-sports as part of multi sporting events' to the Ministry of Youth Affairs and Sports.
In quick succession, on January 03, 2022, MEITY proposed amendments to the 2021 Intermediary Rules for online gaming intermediaries, their due diligences, registration mechanism for online games, and more. This draft amendment is open for stakeholder comments up to January 17, 2023. You can read more about what this draft amendment entails here.
Internet Intermediaries’ ‘Safe Harbor’: To avail the safe harbor protection, Indian intermediaries observe certain due diligences prescribed under the 2021 Intermediary Rules. Mid 2022, the central government notified an amendment to these rules to enhance due diligence measures for intermediaries and setting up a grievance redressal body to hear user appeals against decisions of an intermediary. Our full update can be accessed here.
Additionally, the proposed amendment to the 2021 Intermediary Rules on online gaming also includes certain additional due diligences for all internet intermediaries relating to online gaming content. These follow developments in Indian courts striking down overreaching Indian laws relating to online gaming, that you can read about here.
Fintech: The Reserve Bank of India's Guidelines on Digital Lending ("Guidelines") came into effect on November 30, 2022. You can view the Guidelines here. These Guidelines set out the regulatory framework for digital lending activities undertaken through websites and mobile applications. It stipulates roles and responsibilities of entities involved in this ecosystem i.e., lenders (viz., entities regulated by the RBI) and lending services providers (viz., agents engaged by regulated entities to carry out any of their functions related to lending). Clarifying rules around these activities may prove a shot in the arm, that adds transparency and efficiencies to the Indian fintech lending sector.
Consumer Protection: On June 9, 2022, the Central Consumer Protection Authority ("CCPA") issued the Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022 (“AD Guidelines”) which prohibit ‘misleading advertisements'. The AD Guidelines detail (inter alia) elements of mis-leading advertisements, bait advertisements, ban surrogate advertisements and regulate free-claim advertisements, children-targeted advertisements, including specifying conditions to be fulfilled for circulating bait advertisements, disclaimer requirements, etc. Going forward, advertisements will have to be closely monitored and tested against these guidelines. As per public information, CCPA has commenced enforcing these guidelines. Our full update can be accessed here.
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