Proposed amendments to IT Rules 2021 will cause operational uncertainty for intermediaries: NASSCOM

The proposed amendments to the Information Technology Rules (IT Rules) 2021, will cause “operational uncertainty for intermediaries operating in India", industry body NASSCOM said in a written submission to the Ministry of Electronics and Information Technology.

In a letter dated July 6, NASCOMM also flagged proposed amendments to the IT Rules 2021, which they said may bring in a requirement of ‘pre-censorship’ of user generated content items. July 6 was the last date to make submissions on the draft amendments of the IT Rules.

Pre-censorship means to determine arbitrarily in advance what may or may not be permitted.

ALSO READ: Amendments to IT Rules 2021 will ensure rights of users are not contravened by Big Tech: MeitY

However, before going further, let's look at what the original IT Rules 2021 is.

Enforced in May 2021, the IT Rules brought in additional compliance requirements for significant social media intermediaries (SSMIs), which are platforms with more than 5 million users (such as Facebook, Twitter, Telegram etc.).

Apart from requiring SSMIs to make appointments such as a chief compliance officer, grievance redressal officer and so on, it also directed SSMIs to 'trace' first originator of messages and so on.

Ever since the rules were brought in, it has been criticised as being overbroad, with concerns of privacy and also of stifling freedom of expression. WhatsApp even went to the court against the traceability mandate.

Now, a year later, the Ministry of Electronics and Information Technology proposed amendments to the rules because it feels that the directions were not being complied with properly by a few SSMIs. In a press release, the ministry had said that a number of intermediaries have acted in violation of Constitutional rights of Indian citizens”.

It also said that there have been numerous instances where intermediaries did not address the grievances “satisfactorily and/or fairly”.

Simultaneously, around this time, this press release was published by the ministry, the government also sent notices to Twitter regarding non-compliance with the IT Rules 2021.

Now these proposed amendments too have not been devoid of criticism. In its submission, NASSCOM, the industry body which represents over 3000 Indian companies, especially pointed the amendments to Section 3(1)(a) and 3(1)(b) of the rules.

In these sections, the draft amendments say that all intermediaries will have to ‘ensure compliance’, and that intermediary will have to inform rules and regulations to users that ‘shall cause the user of its computer resource not to host, display, upload” any information that the goes against the IT Rules 2021.

In a open house consultation taken up by MeitY, it was pointed out that these clauses may promote pre-censorship among intermediaries.

MeitY there clarified that it was intent to “avoid introducing obligations that require pre-censorship by intermediaries.” However, NASSCOM in its submission urged MeitY to explicitly reflect the same in the proposed amendments.

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NASSCOM explained, “The proposed rules 3(1)(a) and 3(1)(b) are specifically concerning. In both, the operative phrases (“ensure compliance”, “cause the user”) are undefined.

"This makes it difficult for intermediaries to determine what these rules would materially expect of them and how they apply to their handling of any item of user-generated content (“UGC item”). It is also unclear what not ensuring compliance would look like. This creates operational uncertainty for intermediaries operating in India," the body added.

The industry body also said that the proposed amendments ignore the fact that the intermediary ecosystem is heterogeneous, and that the rules will have varied impact on the market.

"The ecosystem of intermediaries consists of a very diverse and heterogeneous set of service providers... However, the Proposed Amendments ignore the differences in their role, scale, services, and impact on the market," the submission added.

Specifically in this regard, NASSCOM said that proposed amendments urge all types of intermediaries to curb the spread of 'prohibited information'.

B2B companies: The industry body pointed out that there are many B2B service providers whose 'user' would be another business.

"It does not make sense, for the purposes of this rule, to equate business users with individual end-users. Thus, it would not be possible for such B2B service providers to apply this rule in their context," the submission said.

Telecom and internet service providers: Similarly, NASSCOM said that there are many intermediaries like telecom and internet service providers who just provide access.

"These intermediaries do not have the capacity to “cause a user” not to perform any user action and their distance from UGC items is the greatest," it added.

Online infrastructure intermediaries: NASSCOM also pointed towards cloud service providers, web hosts, content delivery networks and so on, which only provide "infrastructure for information to flow through".

"Such providers do not access either their users or retail consumers’ data, and, thus, cannot “cause” users to not engage in any user action involving prohibited information – since they have no visibility into such information," it read.

In this regard, NASSCOM requested MeitY for a graded approach for regulating intermediaries.

"Going forward, we believe that there will be a need to evolve a more nuanced and well-structured framework to distinguish between different classes of intermediaries so that due diligence obligations can be calibrated to intermediaries’ role, scale, services, and impact on the market," the industry body opined.

Not satisfied with the redressal of grievance by intermediaries, MeitY in the draft amendments to the IT Rules also proposed a body which can veto the decision of a grievance redressal officer, when it came to content removal from platforms.

In regard to the proposed grievance appellate committee (GAC), NASSCOM appreciated the proposal but said that the design envisioned in the draft does not address several concerns regarding its constitution, transparency, functioning and its legal status.

"First, an overarching concern remains that the GAC will ultimately perform a function traditionally performed by courts – of deciding upon content-related disputes," NASSCOM said.

Secondly, it said, that the GAC may out of the scope of IT Rules 2021.

"We recommend that, by amending section 46, MEITY should create scope for persons other than the State IT Secretaries to occupy these positions and serve as the appellate remedy instead of the GAC," NASSCOM requested.

It also urged the Central government to "ensure the independence and neutrality of the Grievance Appellate Committee, including by requiring that their members are not vested with any other role that may conflict with their position in the Committee".

The industry body said that despite repeated requests to MeitY to release an SOP in regards to facilitating implementation of IT Rules, the same has not materialised.

"Considering MEITY is now considering further amendments to the IT Rules 2021, we recommend that, along with the amendments or even before the same are finalised, such SOPs be issued to reduce uncertainty around existing procedures in the IT Rules 2021," it recommended.