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IT Rules 2021: How Are Foreign News and Media Publications Impacted?

Foreign news and content publishers online could incur significant costs and may need to formally register now that they are subject to Indian law, as per the governments’ new Intermediary Liability and Digital Media Ethics Code Rules, 2021 for digital media firms and digital news platforms. Under these rules, foreign news publishers and publishers of curated content will be answerable to the Ministry of Information and Broadcasting (MIB) which has the power to reprimand them and block their content, among other actions, in cases of non-compliance.

“There will have to be some sort of registration for these activities, since the rules are applicable to publishers who operate in India or conducts systematic business activity of making content available in India,” said Chandrima Mitra, Partner, DSK Legal. She told MediaNama that it remains to be seen how the government implements these rules and how companies work around these rules and rethink their operations in India.

A bit of context: Notified last week, the rules require all digital media organisations and online news publishers, including foreign publishers, to create a grievance redressal mechanism and appoint grievance redressal officers within India. They would also have to be part of digital media self-regulatory organisation (SRO) as well as follow codes which have only been applicable to print and TV news so far. The rules also lay out specific procedures through which the government can issue orders to publishers to modify or take down content under Section 69A of the Information Technology Act, 2000 against both domestic and foreign digital media entities and publishers. A summary of the rules for digital media under the IT Act can be found here.

Why this matters: Most foreign news and content platforms are accessible in India through the internet, without any government intervention. Some platforms and news organisations like Buzzfeed (non-news content) and the Wall Street Journal for instance are registered businesses in India, with the latter also registered with the Registrar of Newspapers in India. Whereas other notable foreign publications, like the Washington Post, or the New York Times employ journalists in India without a formal business registration. While the government has said that foreign publishers do not need to register their business in India, they will have to comply with the new rules. This means that foreign news and content platforms will have to employ persons to take care of grievances and compliance with the rules.

MediaNama reached out to Buzzfeed, The Economist, the Finance Times, Al Jazeera and others for their views on the new digital media rules. The BBC, Washington Post and New York Times declined to comment.

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Business registration may be inevitable

The government has mandated that publishers of news/current affairs and curated content operating in the territory of India or conducting systematic business activity in the country will have to abide by the new rules. This means that the new rules will apply to any foreign publication, involved in news or curated content and is conducting significant operations within India to produce and make available content.

“When foreign newspapers had to come to India years ago, they had to get approval from the Foreign Investment Promotion Board and register under the Registrar of Newspaper.  Under these rules, even if you are not a registered business you need to appoint officers in India and create a grievance redressal mechanism if you are a foreign digital media company. It will be a cost for foreign companies. If you have at least three officers with an address, not an incorporated address, you may have a tax exposure. If you have employees in India and are appointing grievance officers, social media and digital media companies that fall under these rules may decide to register themselves in India”— Supratim Chakraborty, Partner, Khaitan & Co (emphasis ours)

While these rules under the IT Act mandate foreign online publishers to follow certain requirements, under a self-regulatory regime, which may nudge them towards formal business registration, under the draft Registration of Press and Periodical (RPP) Bill, 2019, released last year, digital media publishers would require a Registrar of Newspapers of India registration.

Government wants media accountability

Foreign digital media companies cannot be controlled by the Indian government under existing laws, or until these new digital media rules were issued. While newspapers have a code of ethics laid down by the Press Council of India, and TV news channels have a Programme Code under the Cable Television Networks Act, 1995 to follow, so far digital media publishers (both foerign and domestic) operated without any requirement to follow these codes.

“The Rules are an attempt to creating a level playing field where even the digital media publishers have to be held accountable. When the Press Council of India exists for newspapers and the Programme Code for television channels, the government needs an instrument to regulate online digital media companies”— Chandrima Mitra, Partner, DSK Legal.

A senior media lawyer told MediaNama that the genesis for these rules stems from the government’s thinking about independent media and digital news organisations. “When it comes to foreign media entities who do not have a presence in India, how does the government hold them accountable? When companies want to enter India, the government mandates that they form a joint-venture with an Indian partner. Under these rules, the government can directly issue an order against a foreign publisher to their point person in India and does not require to go through the formal legal channels to get a court in a foreign jurisdiction to enforce their order,” this person said on the condition of anonymity.

Price of non-compliance is very high

There are two major issues for foreign publishers beyond the incremental cost they will incur to be in compliance with the new rules. The first, is that non-compliance can lead to the government, through an Inter-Departmental Committee, blocking content through Section 69A of the IT Act. This order can be issued by the IT Ministry to internet service providers (ISP) and telcos, which would mean its entire audience or reader base in India would be cut off. The second issue, is that non-compliance can lead to the government revoking safe harbor protections under Section 79 of the IT Act. This means that foreign publishers could be criminally liable for the content they publish, if the government revokes Section 79 protections due to the publishers’ non-compliance with the rules.

According to Mathew Chacko, Partner, Spice Route Legal, under these rules the MIB has been given all the powers while the authority of state governments remains a question. “I do not think that the requirement to have foreign media companies to register in India is an issue. We are a large country and I think it is reasonable to impose compliance requirements to operate in such a large market.” he said.

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“The implications of not following the guidelines is that the you will not fall within the definition of an intermediary, which means that you could become liable for anything a third-party has done on your platform. This appears prima facie unfair and might have a chilling effect on the mushrooming small and medium sized media enterprises. This also means that foreign and local intermediaries may lose the “safe harbour” protection and be exposed to compliance and supervisory requirements that may be fairly heavy”—Mathew Chacko, Partner, Spice Route Legal

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**(Update Mach 8, 2021 10:42 am). Updated with statement from BBC, Washington Post and New York Times. Originally published March 5, 2021 12:09pm

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