India’s Online Gaming Intermediaries Regulations: The Latest Developments Explained
What Is New With The Online Gaming Intermediaries Regulations?
As the world becomes increasingly digital, the Indian government has introduced regulations to ensure the safety and security of its citizens online. The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, were created to regulate intermediaries such as social media, messaging apps, OTT platforms, and online gaming platforms. Recognizing the growing popularity of online gaming and the potential risks involved, the government introduced the (Intermediary Guidelines and Digital Media Ethics Code) Amendment Rules, in April 2023 (“IT Amendments Rules 2023”).
In this blog post, we will take a closer look at what these amendments mean for online gaming intermediaries and their users. Let's dive in and examine the changes!
1. IT Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021
The Indian government introduced the IT Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, which are aimed at regulating online intermediaries operating in India, including online gaming platforms. Essentially, online gaming intermediaries are websites and apps that allow people to play games, such as mobile games, online casino games, or fantasy sports. These regulations were created to ensure that online gaming platforms are responsible for the content they host and to safeguard users from illegal activities such as money laundering or fraud.
In 2022, these rules were amended to provide additional protections for users and to hold online gaming platforms more accountable. For instance, online gaming intermediaries are now obligated to verify the identities of their users and report any suspicious activities to the authorities. Additionally, online gaming platforms must have measures in place to prevent the spread of sexually explicit content and offer voluntary user verification to ensure users are who they claim to be.
In April 2023, the Indian government introduced amendments to the Intermediary Guidelines and Digital Media Ethics Code that apply specifically to online gaming intermediaries. These changes include notification of removed content, a grievance mechanism for user complaints, blocking of illegal or violating content, a fact-check unit to identify fake news and self-regulatory organizations. While aimed at regulating online gaming and ensuring user safety, some critics have raised concerns about potential government overreach and the need for legal challenges.
Let's delve deeper into the 2023 amendments and explore their implications in India.
2. IT (Intermediary Guidelines and Digital Media Ethics Code) Amendment Rules, 2023
The Ministry of Electronics and Information Technology has recently introduced amendments to the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, in order to regulate online games and ensure the safety and security of users. The IT Amendments Rules 2023 contain several key points that are important to understand.
- Definition of "Online Game"
The IT Amendments Rules 2023 now include a definition of "online game," which refers to any game accessible through a computer resource or an intermediary on the Internet.
- Power to Notify Fact-Check Unit
In 2023, the Ministry of Electronics and Information Technology (“MeitY”) was granted the power to notify a fact-check unit of the Central Government. This unit is responsible for identifying fake, false, or misleading online content related to any business of the Central Government [Rule 3(1)(b)(v)]. Intermediaries, such as social media platforms and messaging apps, are now required to make reasonable efforts to prevent their users from posting such information. The IT Amendment Rules, 2022, further amend these due diligence requirements for intermediaries. Rule 3(1)(b)(v) mandates that intermediaries must make reasonable efforts to ensure their users do not post any information related to any business of the Union Government that is identified as "fake," "false," or "misleading" by the FCU. It is important to note that the terms "business" of the Union Government and "fake, false, or misleading" remain undefined throughout the Rules.
- Duty to Inform Users of Harmful Online Games
If an online game can cause harm to the user, intermediaries and the grievance redressal mechanism have a duty to inform the user of its computer resource not to host, display, upload, modify, publish, transmit, store, update, or share any information related to that harmful online game.
- Notification of Permissible Online Real Money Game
If an online gaming intermediary has enabled users to access any permissible online real money game, it must inform its users of such change as soon as possible, but not later than 24 hours after the change is affected.
- Due Diligence for Significant Social Media Intermediaries
Additional due diligence must be observed by significant social media intermediaries under Rule 4, with sub-rules inserted that focus on any permissible online real money game. In such cases, online gaming intermediaries must display a demonstrable and visible mark of verification of such online game by an online gaming self-regulatory body on such permissible online real money game and not finance or enable financing to be offered by a third party.
- Designation of Online Gaming Self-Regulatory Bodies
Rule 4-A has been inserted, allowing the Ministry to designate as many online gaming self-regulatory bodies as it deems necessary for verifying an online real-money game.
- Applicability of Rules
Rule 4-B says that the obligations under Rule 3 and Rule 4 of the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, will be applicable to online games only after the expiry of three months.
- Central Government's Power to Direct Intermediaries
Rule 4-C states that if the Central Government considers the necessity in the interest of the sovereignty and integrity of India, the security of the State, or friendship with foreign States, it can direct the intermediary to make necessary alterations without affecting the main point.
- Self-Regulatory Organizations
Self-Regulatory Organizations (SROs) will have to determine whether a gaming company's games entail wagering on any outcome and ensure that the assessment is based on existing jurisprudence as laid down by the Supreme Court of India on the determination of games of skill from games involving wagering and betting.
- New Definitions of Online Real Money Gaming
New definitions of online real money gaming have been introduced based on stakeholder consultation, which provides much-needed clarity in the IT Amendment Rules and will help in ongoing GST litigations.
- Diligence Requirement for Gaming Companies
Gaming companies must follow the diligence requirement of content not causing "user harm," and the Ministry must provide further clarification to avoid potential ambiguity in its interpretation.
3. Fact Checking Provision in Amendment 2023
The IT Amendment Rules 2023 have introduced a Fact Checking Provision aimed at curbing the spread of fake news and misinformation on digital platforms. The provision requires digital platforms to implement a mechanism for fact-checking content, but concerns have been raised about its impact on free speech and constitutional validity.
What is the Fact Checking Provision?
The Fact Checking Provision, introduced on 6th April 2023, requires digital platforms to implement a mechanism for fact-checking content and empowers the government to notify a fact-check unit to identify fake or misleading content related to Central Government business. Violation of this rule can lead to the loss of safe harbour immunity.
What are the implications of the Fact Checking Provision?
The provision will require digital platforms to invest in technology and resources for fact-checking, but it is expected to benefit society by curbing the spread of misinformation. Intermediaries who fail to comply with the due diligence requirements under the amendment risk losing their "safe harbour" protections under the IT Act, 2000. However, concerns have been raised about the implications for free speech, particularly in the context of dissent.
What are the challenges to the Fact Checking Provision?
Some digital platforms have challenged the provision in court, arguing that it could infringe upon the freedom of speech and expression guaranteed under the Constitution. The vague definitions of "fake," "false," and "misleading" content create grounds for censorship and violate previous court rulings and the IT Act, 2000. The Internet Freedom Foundation (IFF) has filed a petition challenging the provision's constitutional validity, and the Bombay High Court has directed MeitY to respond by April 19, 2023, and explain the rationale behind the amendments.
The IT Amendments Rules 2023 have been introduced with the intention of regulating online gaming intermediaries and protecting users from harmful content. However, the broad scope of these rules has raised concerns among some critics about their potential to give the government excessive control over information and news for the public at large. With the power to designate online gaming self-regulatory bodies and direct intermediaries, there may be legal challenges to the IT Amendments Rules 2023 on the grounds that they exceed the Indian government's authority. It remains to be seen how effective these amendments will be in regulating online gaming and ensuring user safety, and how they will be interpreted and enforced in practice.
Author: Aqib Khan is a law graduate from Damodaram Sanjivayya National Law University, As an aspiring Corporate Lawyer, he has a proven track record in managing General Commercial Contracts, Contract Lifecycle Management, and providing expert counsel on commercial and corporate matters. His specialization extends to General Corporate Law, Energy Law, and Infrastructure Law, showcasing his breadth of expertise in the field.”