(Vikram Jeet Singh, Kalindhi Bhatia & Prashant Daga)
The ongoing regulatory tussle in India relating to the control of online content has spread to the online gaming space. The Indian government recently notified amendments to the Information Technology (Intermediaries Guidelines and Digital Media Ethics Code), Rules, 2021 (“2021 IT Rules”).
You will remember that undertaking ‘due diligence’ as per the 2021 IT Rules is a prerequisite for an intermediary to seek safe harbor protection, i.e., immunity from liability arising due to third party content that it carries. The Indian Government has sought to limit this freedom, by progressively requiring Internet intermediaries to carry out additional due diligence on specified content. These new amendments prescribe false information take down obligations, conditions on online gaming advertising and due diligence for online gaming intermediaries.
In the same vein, the Ministry of Information and Broadcasting has also released a fresh advisory on advertising online betting platforms.
We have compiled these in a brief update below for your reference.
Modified 2021 IT Rules: On April 07, 2023, the (Indian) Ministry of Electronics and Information Technology (“MEITY”) notified amendments to the 2021 IT Rules; the amended rules can be viewed here. The key highlights from these amendments are:
Definition of online gaming: Unlike the draft version of these amendments, “online games” and “online real money games” have been separately defined to distinguish between games which are free to play and those that require users to make a deposit in cash or kind with the expectation of earning winnings on that deposit. Additionally, the amendments also introduce the concept of “permissible online games” i.e., online games (viz., free to play games) and online real money games certified by a ‘self-regulatory body’ (to be set up under the rules).
Due-diligence for Internet intermediaries: Adding to the existing due-diligence, Internet intermediaries are now required to ensure that they do not host (i) any online game not verified as a permissible online game; and (ii) advertisements and/or promotional content (including surrogate advertisements) of any online game that cannot be considered a permissible online gaming and any online gaming intermediary which hosts such games.
Online gaming intermediaries ("OGI"): Platforms enabling users to access one or more online games shall now be considered as online gaming intermediaries. Certain due diligence have been prescribed for these platforms, such as following know-your-customer norms for user verification as per Reserve Bank of India directives, disclose refund policy for deposits in real money real games and manner of distribution of winnings, restriction on financing a user’s participation, displaying framework followed by self-regulatory organization to permit the online game, etc. The existing requirement on significant social media intermediaries to appoint resident officers has been extended to OGIs as well (i.e., appoint a chief compliance officer, nodal contact person, and grievance redressal officer).
Self-regulatory bodies: These bodies, that could be ‘Not for profit companies’ and/or societies may be set up with online gaming intermediaries as its members; this body shall have to be registered with MEITY. Such bodies will be responsible for reviewing and registering online games offered by its members, subject to certain prescribed factors. Games approved by the self-regulatory body (“SRB”) would be considered as “permissible online games” and may be offered with visible mark signifying its registration; the SRB is also required to maintain a list of permissible online games and details relating to it (like, validity of verification, rationale for verification, etc.).
Grace period: The aforesaid changes, including due diligence on Internet intermediaries and online gaming intermediaries shall become applicable three (3) months after the constitution of the first three (3) three SRBs.
Misleading Information: Intermediaries are required to restrict its users from posting content which is inherently misinformation / patently false or untrue or any information (relating to government activities) which has been classified as fake / false by a (notified) ‘fact check unit’ of the central government.
For completeness, the draft amendment had proposed designating the government’s Press Information Bureau as the official fact checker. However, the final form of the law provides for a government designated body to determine the validity of information. We contributed to this news piece on the implementation of this obligation and its potential implications for intermediaries, in this context.
MIB Advisory on Gaming Ads:
Last year, the MIB had issued an advisory addressed to online advertisement intermediaries, media houses, broadcasting channels and news publishers to refrain from allowing advertising/promotional content for online betting platforms, including surrogate advertising of these platforms.
Noting recent instances of newspapers publishing advertisements of online betting platforms, the MIB issued a fresh advisory on April 06, 2023, reiterating the obligation of media houses and online advertising intermediaries’ obligation to not host promotional content pertaining online betting and allied activities.
The advisory further notes that continuing non-compliance may attract ‘appropriate action’ as per applicable statute(s).
As always, should you have any questions on how this law will affect your business in particular, please feel free to write to us at practicemanager@btglegal.com.