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IT Amendment Rules, 2023: What it holds for Online Gaming and Social Media Intermediaries?




Introduction

The Ministry of Electronics and Information Technology (MeitY) announced the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Amendment Rules, 2023 (“2023 IT Rules”). 2023 IT Rules will amend the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, which previously only applied to social media intermediaries.

A primary change in the 2023 IT Rules is the replacement of the terms "social media intermediary and significant social media intermediary" with "a social media intermediary, a significant social media intermediary, and an online gaming intermediary." Resultantly, the new rules will also apply to online gaming intermediaries, which previously fell outside the scope of the earlier law.

Changes proposed by the 2023 IT Rules

The 2023 IT Rules places focus on regulating online gaming intermediaries. The amendments aim to prevent any form of wagering or betting on the outcome of online games and prohibit online gaming intermediaries from hosting non-permissible online games or promoting them through advertisements or surrogate advertisements.

The 2023 IT Rules also require online gaming intermediaries to ensure that any online game hosted on their platform is verified as permissible. Additionally, a fact-checking body established by MeitY would also soon carry out the function of verifying that intermediaries are not hosting non-permissible online real money games or misleading advertisements.

These regulations are a significant step towards ensuring the safety and protection of users engaged in online gaming activities. By preventing wagering and regulating online gaming, the government seeks to eliminate the adverse consequences of gambling, such as addiction and financial loss.


Furthermore, the fact-checking body's verification function is essential in maintaining the integrity of online gaming intermediaries and ensuring that they comply with the regulations. This move is in line with the government's broader efforts to regulate online content and protect Indian citizens from harmful or illegal activities online.


2023 IT Rules on Social Media Intermediaries

The 2023 IT Rules for social media intermediaries make them responsible for ensuring that the content posted on their platform does not violate Indian law or harm its citizens. The following are the categories of content that the intermediaries must prevent from being posted on their platforms:

  • Obscene

  • Pornographic

  • Pedophilic

  • Invasive of another's privacy

  • Hate speech

  • Promoting illegal activities

  • Threatening "the unity, integrity, defense, security or sovereignty of India"

By holding social media intermediaries accountable for the content on their platforms, the Indian government hopes to reduce the spread of harmful content and protect its citizens from online harassment and abuse.


The PIB fact-check team will verify the authenticity of news.

2023 IT Rules on Online Gaming Intermediaries

The 2023 IT Rules apply to online gaming intermediaries that offer real money games. These intermediaries must display a "demonstrable and visible mark of verification" from an online gaming self-regulatory body before accepting any deposit in cash or kind from a user. The intermediaries must also identify and verify the user's identity before accepting any deposit for a permissible online real money game.

Additionally, the intermediaries must communicate their policy related to the withdrawal or refund of a user's deposit, the manner of determination, and the distribution of winnings, fees, and other charges payable by the user. The intermediaries should also not finance or enable financing by the third party for playing their online games.

2023 IT Rules: Multiple Self-Regulatory Bodies

The 2023 IT Rules provide that the government can establish multiple self-regulatory bodies to oversee online real money games. These bodies would be authorised to approve a game as a "permissible online real money game" as long as it does not involve gambling and meets all legal requirements. The setting up of these multiple self-regulatory bodies is likely to increase transparency and accountability in the online gaming industry.


Criteria

The 2023 IT Rules outline the criteria for organizations that wish to apply for self-regulatory body status. These criteria include:

  • Registration as a company under the Companies Act of 2013

  • The membership that represents the gaming industry

  • Promotion of online games in a responsible manner

  • Board of Directors consists of reputable individuals with no conflicts of interest and relevant experience.

Responsibilities

The self-regulatory bodies are required to maintain an updated list of permissible online games, information about the process for verifying online games, and a roster of current members on their website or mobile application. Additionally, they must monitor and enforce compliance with legal requirements for online real money games.


Apart from bringing transparency in regulation of Gaming intermediaries, the setting up and functioning of the self-regulatory bodies is designed to protect users from fraud and ensure that online gaming intermediaries also operate fairly and transparently.


2023 IT Rules: Verification mark for Real Money Online Games

The 2023 IT Rules provide that the online gaming intermediaries must display a "demonstrable and visible mark of verification" of a real money online game by an online gaming self-regulatory body. Before accepting any deposit in cash or kind from any user for a permissible online real money game, such intermediary must identify the user and verify their identity. The intermediary must also clarify the policy related to the withdrawal or refund of a user's deposit, the determination and distribution of winnings, fees, and other charges payable by the user.


2023 IT Rules: the Qs that remain?

  1. Does the 2023 IT Rules have a direct impact on the fundamental right to free speech and expression of news publishers, which will also affect the right of readers to receive information and knowledge?

  2. Does the 2023 IT Rules create an entirely new procedure for internet censorship inconsistent with constitutional or democratic principles?

  3. Does the fact-check unit at the Press Information Bureau will have the power to identify anything as "fake or false" without defining what those terms mean or laying down any parameters, criteria, factors or tests that will be applied? Does hhis will increase vagueness and make the earlier 2021 IT Rules even more prone to misuse?

  4. Does the 2023 IT Rules result in over-reaching or bypassing the procedural safeguards upheld by the Supreme Court in the Shreya Singhal case, which requires a reasoned order and compliance with several procedural safeguards, including a hearing to the originator and intermediary?

  5. Are there legislative gaps such as absence of definitions of terms like "fake news" and "false information" and would this potentially result is possible misinterpretation and lack of clarity to the detriment of the rights of the users or the intermediary companies?

The 2023 IT Rules place responsibility on social media intermediaries and online gaming intermediaries to ensure that content and games offered on their platforms do not violate Indian law, harm users or threaten national security. Additionally, they are also entrusted to (i) prevent the spread of misinformation, fake news, and hate speech on social media platforms and to remove such content within 36 hours of receiving a complaint to ensure greater trust of users on the platform's integrity and (ii) to verify the authenticity and legality of real-money online games and ensure that users know the policies governing the games in order to help curb illegal gambling and ensure users are not exploited or scammed in online gaming transactions.


Pertinently, the Madras High Court (in Digital News Publishers Assn. v. Union of India -2021), had earlier questioned the strict government control over social media and digital news media by the earlier 2021 IT Rules observing that it may rob the media of its independence and the fourth pillar of democracy may not be present. Therefore, apprehensions remain on the outreach, transparency, and safeguard of interests of the stakeholders under the 2023 IT Rules too.



The above article is authored by Dr. Manoj Kumar, Founder & Managing Partner. (More about the author @ www.drmanojkumarindia.com)


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