Another international media organisation operating in India bit the dust on August 26 as Yahoo India shut down its news section, according to a spokesperson, due to Foreign Direct Investment regulations. An FAQ section on its website says that the Verizon-owned site has shut down its content verticals of Yahoo News, Yahoo Cricket, Finance, Entertainment, and MAKERS India.
This marks the second shutdown of a major international news organisation in India due to FDI regulations after BuzzFeed-owned HuffPost India stopped publishing in November last year. The FDI regulations which impose a 26 percent cap on foreign investment in digital media companies, also require foreign investors to obtain government approval to purchase a stake in digital media companies. Thus, the regulations have been criticised for stifling media freedom and increasing government control over digital media companies.
Lack of government approvals led to closure: Yahoo spokesperson
A company spokesperson told MediaNama that its news and current affairs content is being shut down after an evaluation of ‘the operational and economic challenges in restructuring’ and an ‘absence of requisite Government approvals to operate our news and current affairs content business in India’.
On its FAQs section, however, the company says that it is open to opportunities that would allow it to resume operations in India. Meanwhile, the company’s search engine and email services will remain operational.
MediaNama has reached out to Yahoo executives, including former Editor-in-Chief Shishir Bhate, for comment on the fate of Yahoo employees and will update the story when we receive new information.
What are the 2020 FDI regulations?
In August 2019 the Department for Promotion of Industry and Internal Trade (DPIIT) had announced a 26% FDI limit for digital media.
In October 2020, the DPIIT issued a ‘clarification‘ on this policy defining what ‘digital media’ means and asking that all applicable entities align their FDI to the prescribed limit within a year thereafter.
The entities are defined as:
- Digital media entity streaming/uploading news and current affairs on websites, apps, or other platforms
- News agency which gathers, writes, and distributes/transmits news, directly or indirectly, to digital media entities and/or news aggregators
- News aggregator, being an entity which, using software or web application, aggregates news content from various sources, such as news websites, blogs, podcasts, video blogs, user-submitted links, etc in one location.”
The DPIIT clarification also asked that the majority of directors on the board of digital media companies have to be Indian citizens and the CEO should be Indian. Further, any foreign national who is expected to be working at the company for more than sixty days is required to get security clearance from the government, failing which the company will be forced to terminate their employment.
- Watch: Why new FDI rules for digital media companies are regressive for the internet space in India
- Govt publishes ‘clarification’ on 26% FDI in digital news media
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