The Cumulative Effect of Recent Internet Regulation

By Sidharth Chopra and Nandita Saikia

India: 130 crore people, 121 crore mobile phones, 44.6 crore smartphones, 56 crore internet users, it’s said. That’s a lot of people with many non-commercial interests that need protection and, critically, a very large market much of which remains untapped.

It’s worth remembering these numbers every time a conversation comes up about Digital India which includes not just eCommerce but also eCommunications and eGovernance. It’s worth remembering them each time mention is made of online regulation, national security, and economic advancement all in one breath.

An unregulated Internet, it has been suggested, would subject India to data colonisation and deprive Indians of their very own data. The benefits arising from Internet penetration within the country should be exclusively enjoyed by Indians; like China, India should adopt measures which promote local industry, according to some.

Pro-protectionist arguments for Internet regulation, particularly from Indian industry, can seem reasonable at first glance. Unfortunately, in their fine print, these arguments often say less about “Indians benefitting” than they do about “keeping non-Indians out” which, of course, assumes, without any demonstrable basis, that threats to Indians primarily come from beyond the country’s borders.

Such arguments are, essentially, the result of real-world fallacies being transposed on to the digital realm completely oblivious not only of how interconnected the world now is to everyone ne’s benefit, and but also oblivious of what most threatens individual Indians: the invasion of privacy and the impingement of free speech. Issues and not actors.

Purely commercial considerations aside, the worldview from which advocacy for such enhanced regulation emerges is, at best, insular and, at worst, xenophobic. It isn’t at all surprising that its expression is often accompanied by articulations of nationalism. After all, insularity and nationalism tend to complement each other.

Commercial Regulation

The demands of Indian industry have not gone unheard. In December 2018, DIPP issued a retrospective clarification of the FDI policy in eCommerce which is likely to curb online marketplaces and possibly limit consumer access to goods. And, on Christmas Eve, the Ministry of Electronics and Information Technology opened the Draft Intermediary Guidelines Amendment Rules 2018 to public comment saying it had prepared them with the intention of replacing rules on the same subject which had previously been notified in 2011.

If intermediaries have more than 50 lakh users in India or are specifically notified by the government for the purpose, the draft rules propose to require them to be incorporated under the Indian Companies Act, have a permanent registered office in India, and an authorized person in India to coordinate with law-enforcement 24×7. While this is easily justified as trying to make companies which operate in India accountable in India, the fine print raises two concerns.

Firstly, intermediaries would have very little leeway, if at all, to refuse to comply with what could be a request by an overzealous law enforcement officer. The safeguards within the rules are inadequate: they don’t go far beyond requiring that a reason be provided for a requisition. Secondly, the structure of the proposed rules is such that, if they were to be implemented, they would likely function as a trade barrier or entry barrier into India.

Simply put, if an intermediary such as an online streaming service were to have more than 50 lakh users in India, it would need to have a permanent establishment in India and incorporate a company in India so as to legally provide services in the country which, obviously, would be an extremely expensive proposition that may not appeal to it. If the intermediary did not comply, it would either operate illegally or not operate at all in India, thus possibly leaving Indian consumers deprived of its services.

Regulation beyond the ‘Merely’ Commercial

There has also been a slew of measures – proposed, realized and occasionally stymied – in recent times to regulate communications online. Not all of these measures are workable, and some such as the proposed setting up of a Social Media Communications Hub seem to have, at least for the time being, been put on hold if not entirely put off. A writ petition filed in August 2018 through which the hub was challenged still appears to be pending.

More recently, the Ministry of Home Affairs issued an order on December 20, 2018, which empowered ten security and intelligence agencies ‘for the purposes of interception, monitoring and decryption of any information generated, transmitted, received or stored in any computer resource’. The order was met with accusations that the creation of a surveillance state was underway, and the fact that the listed agencies included, somewhat inexplicably, the Central Board of Direct Taxes and the Directorate of Revenue Intelligence did not help matters. After all, there was no clear justification for according such wide-ranging powers to them, it was argued, and given the potential volume of interception and monitoring, the safeguards in place to prevent abuses of power could prove to be ineffectual.

The proposed Intermediary Guidelines themselves also envisage content being blocked or disabled content by intermediaries upon the occurrence of various events including upon their being notified by a government agency, in some cases. The proposal lays out a timeline within which they are to act: as far as possible immediately, but in no case later than twenty-four hours. This gives intermediaries almost no way out should requisitions to disable access to content be blatantly overzealous.

To compound free speech concerns, the proposed Intermediary Guidelines also oblige intermediaries to use artificial intelligence to proactively identify, remove, or disable public access to unlawful information or content. This proposal could obliquely reintroduce the obligation sought to be cast on intermediaries under Section 79(3) of the IT Act which was specifically read down by the Supreme Court in the Shreya Singhal judgment — in essence, although an intermediary must take down prohibited user-generated content upon receiving actual knowledge of its upload, ‘actual knowledge’ was interpreted to mean ‘actual knowledge from a court order’ by the Supreme Court.

The proposal to have intermediaries deploy artificial intelligence to counter illegal content also brings to mind the Supreme Court’s short-lived adventure with the so-called doctrine of auto-block which also mooted the same possibility only to have it assailed when hope met reality. Artificial intelligence as it currently exists cannot easily identify illegal content, and non-existent technology cannot solve an existent problem.

The Choices Before Us

Legal regulation should not be drafted only to satisfy immediate requirements given that its effects tend to linger on. As a general rule of thumb, it is prudent to frame law imagining the worst-case scenario, and testing it by asking: what would happen if this law were to be in force while an inept, incompetent, and corrupt government was in power? Recent regulatory exercises, even if some of them are individually justifiable, fail the test simply because there do not exist adequately robust mechanisms to counter possible misuse at some point in the future should they become law.

Add to this the fact that intermediaries must ‘enable tracing out of such originator of information on its platform as may be required by government agencies who are legally authorised’ if the proposed Intermediary Guidelines come through. This would take us down a path suspiciously similar to that which China has taken. Individual speech is closely monitored, the country has a pervasive system of social credits which are used to influence individual conduct, and domestic industries are protected by the creation of conditions which make it difficult for foreign companies to survive.

There are, of course, those who would benefit from individuals being closely monitored and domestic companies being propped up. Indian data would probably remain in India, ready for exploitation by commercial interests, which, given the population, would likely yield large dividends. The unending reaping of Indian data would also serve political interests not just in terms of cracking down on opposing voices but in terms of tailoring political speech directed at individuals to suit their specific concerns. That is exactly what appears to have occurred in the case of the Brexit vote and the US presidential election with almost unarguably adverse consequences for both nations.

Britain, for example, appears to be set to leave the European Union without adequate preparation, to put it mildly, unless something exceptional happens while it carries on against freedom of movement. Across the pond, the US seems obsessed with a wall to keep out migrants. And that it is the trouble with information asymmetries: they tend to result in situations where the most vulnerable suffer whether they are minorities or migrants. The combination of social control and economic protectionism could assist in keeping the citizens in check by chilling speech and encouraging self-censorship.

Anyone who does not belong to the mainstream and conform to social expectations could potentially become a target of both state and social disapprobation as, in our own neighbourhood, China’s ‘re-education’ camps demonstrate. This is, of course, particularly problematic for India given that we were conceived of as a plural state and given that we have always been a plural society.

What is at stake here is not just a decision as to the viability of a set of soporific rules but a decision as to the kind of society we want to continue as. Whether we aim for social control and perhaps homogenisation, or whether we continue to celebrate the plurality and freedom embedded in the Constitution. We have a choice to make and we would do well not to make it lightly, or to allow it to be made for us while we look away.

As Justice William Douglas of the US Supreme Court once said: “As nightfall does not come all at once, neither does oppression. In both instances, there is a twilight when everything remains seemingly unchanged. And it is in such twilight that we all must be most aware of change in the air — however slight — lest we become unwitting victims of the darkness.”

About the authors: The authors, Sidharth Chopra and Nandita Saikia, have advised a number of companies in the eCommerce and media realm on issues of law and legal policy. The opinions contained in this article are their own.