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Technology, telecoms and media year in review: 2023 and what to expect in new year

Ayan Sharma and Arushi Mukherji


India has had an eventful year in the technology, media and communications (TMC) field in 2023. From the much-awaited data privacy law, broadcast regulation bills, taxes on online gaming and regulation of dark patterns, to the first rumblings on the new Digital India Act, policymakers have had a busy 2023. This article discusses the key developments in the TMC field in India and foretells what to expect in 2024.


Digital Personal Data Protection Act 2023

In August 2023, the Indian Parliament in enacted the Digital Personal Data Protection Act of 2023 (DPDPA). The DPDPA is a concise and simply written 33-page document, accompanied by several useful illustrations. In its material scope, the DPDPA applies to personal data that is collected in digital form and in non-digital form but subsequently digitised. It does not apply to:

  • non-digital data;

  • data processed for personal or domestic purposes; and

  • data made available by a data principal or any other person under a legal obligation.


Interestingly, the DPDA applies to personal data outside of India only if the processing of such personal data is in connection with the offering of goods and services to data principals within India.


The act has imposed obligations on data fiduciaries concerning the processing of personal data while stressing effective and accessible grievance redressal mechanisms. Data fiduciaries are also allowed to engage data processors through valid contracts however the responsibility to set security safeguards falls only on the shoulders of data fiduciaries. Thankfully, under the DPDPA, data can be transferred to all countries except those barred by the central government. Sectoral restrictions on data transfers such as those of the Reserve Bank of India will continue to apply. The act has also set up a Data Protection Board, which shall function as an adjudicatory and enforcement body and not a regulator. The board can issue monetary penalties to data fiduciaries for non-compliance with provisions of the bill with the maximum penalty that can be issued being 250 Indian crore (approximately $30 million).


Setbacks for online gaming

On 11 July 2023, India's Goods and Services Tax Council decreed that all online gaming businesses would uniformly be subject to a 28% tax on the full-face value of services, including the value of the monied in play. While previously an 18% tax was levied on the commission earned by the gaming operators, or rake fees, the council's decision both increased the rate of tax and expanded the base on which this tax is applied. This decision came as a major setback for gaming operators in India and investors in the sector, where a booming gaming industry has a projected valuation of $3.8 billion by the year 2024. Looking forward, the gaming industry is braced for extensive and expensive litigation. Decisions such as Gameskraft Technologies [1] and Bangalore Turf Club [2] that struck down the imposition of a 28% tax on face value are expected to be appealed. While the GST Council's announcement ended a year-long deadlock on taxing online gaming, it was arguably a retrograde step. Allied to the news that a plan for regulation through "self-regulating bodies" has been put on hold, this makes for a bad turn of the year for the gaming industry in India.


Regulations of dark patterns and deep fakes

On 30 November 2023, the Central Consumer Protection Authority (CCPA) notified the Guidelines for Prevention and Regulation of Dark Patterns, 2023 (the guidelines). The guidelines were notified after conducting stakeholder consultation and seeking comments from the public on the earlier released draft guidelines. "Dark patterns" are defined to mean manipulative practices or deceptive design patterns in UI or UX on any platform that subvert or impair user autonomy, influence decision-making, and work to the detriment of users. The guidelines apply to sellers, advertisers and all platforms that systematically offer goods and services in India. If such entities are already regulated for dark patterns under any other law, the guidelines may be read as supplementary provisions and not in derogation of such other laws. The guidelines list and prohibit 13 types of dark pattern practices.


Baby steps on AI regulation

In the aftermath of the proliferation of deep fake videos of several celebrities on social media, Indian lawmakers are set to draft rules that detect the limit the spread of such content and other harmful artificial intelligence (AI) generated media online. The Union Minister for the Ministry of Electronics and Information Technology, Mr. Ashwini Vaishnaw, held consultations with leading social media platforms, artificial intelligence companies and industry bodies on this topic. The minister has stated that the government will soon release draft regulations that shall tackle this growing issue. The regulations shall be built on four key foundational pillars:

  • detecting deepfakes,

  • preventing deepfakes by removing or reducing their virality;

  • strengthening reporting mechanisms; and

  • spreading awareness about the technology.


These regulations are also looking to address the biases that can be found in generative AI, which is the first time that an Indian law will tackle AI regulation head-on.


Regulating OTT

On 10 November 2023, the Ministry of Information & Broadcasting released the Draft Broadcasting Services (Regulation) Bill 2023 (the bill) that is positioned to regulate OTT platforms and other integrated models of broadcasting. Currently, the Cable Television Networks (Regulation) Act 1995 (the Television Networks Act) serves as the primary legislation overseeing content on cable networks. The bill seeks to replace the current light-touch, coregulation model of OTT content. In addition to introducing contemporary definitions of emerging technologies, the bill proposes to bring in new elements such as "Content Evaluation Committees" and accessibility measures for the less-abled. The bill mandates for the first-time regulation of different channels of broadcasting, such as radio, satellite, internet and terrestrial networks.


What to expect in 2024

The following developments can be expected in 2024:

  • The DPDPA is yet to be brought into force, and the first set of draft rules expected to be released for public consultation at the end of January 2024. 2024, effectively, will be the year in which data protection legislation will actually take shape and impact industry.

  • Challenges to the regulations on online gaming will most likely be heard in High Courts across the country in the coming six to eight months and will light the road ahead for the entire online gaming industry.

  • India's chairing of the Global Partnership on Artificial Intelligence and its signing of the Bletchley Declaration gives hope that AI regulations or guidelines may be brought out by the central government.

  • The much-anticipated Digital India Act may see light of day after the upcoming general elections in April 2024. The DIA seeks to, among other things:

  • regulate online safe harbours, fair trade practices and tech giants;

  • safeguard innovation;

  • promote digital governance; and

  • prioritise open internet, online safety, accountability and expedited cyber offence adjudication.

The Indian TMC industry has been scrambling to make sense of these developments, while figuring out how to adapt to these upcoming changes. What can be said without a doubt is that 2024 will be a year to watch out for in the TMC sector.


 

Endnotes

(1) Gameskraft Technologies Private Limited v Directorate General of Goods Services Tax Intelligence (Writ Petition 19570 of 2022).

(2) Bangalore Turf Club Limited and ors v State of Karnataka (Writ Petition 11168 of 2018).

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