Proposed Digital India Act to overhaul outdated legislation
The Indian government has proposed new legislation in an effort to combat online crime and offer broader protection to citizens. The new law showcases India’s efforts to adapt to a briskly advancing digital world that did not exist 20 years ago when its current laws were enacted.
India envisions itself being a trillion-dollar digital economy within the next few years. A new, modern law for a rapidly evolving digital landscape will be critical towards realising this goal. Currently, the primary legislation governing digital activities is the Information Technology Act, which was enacted in 2000 and does not cover modern internet-based services (eg, e-commerce and social media platforms, online gaming portals, AI tools and the metaverse). In this context, discussions surrounding a new digital law – one that is in sync with global standards and modern technologies – have been ongoing.
On 9 March 2023 the Ministry of Electronics and Information Technology organised a consultation to update stakeholders on the new legal framework being proposed for India’s digital technology ecosystem, central to which will be the Digital India Act. While a draft of the new legislation is yet to be released, the ministry’s presentation offers critical insight into the framework.
New classes of intermediaries
New classes of intermediaries (eg, e-commerce, digital media, search engines, gaming, AI, OTT platforms, telecom service providers, ad-tech, significant social media intermediaries and fact-checking portals) will be defined and separate rules will be created for different categories. While new categorisations were to be expected given the speed of technological advancements, the government is debating whether all intermediaries deserve safe harbour. Section 79 of the current IT Act provides legal immunity to intermediaries for user actions on their platform, so long as they adhere to the outlined due diligence requirements. Given the pivotal role of safe harbour in online free speech, it has been stated that alterations would be critically examined and regulated under the constitutional rights of freedom of speech and expression.
Citizens’ rights will also be protected through recognition of the right to be forgotten, right against discrimination and right to digital inheritance.
Criminalising online offences
Cybercrimes reported by Indian users are the highest among G20 countries. Taking cognisance of rising cases of cybercrime, cyber porn, cyber-phishing, cyberbullying, impersonation, identity theft, identify fraud and malicious unauthorised sharing of personal information, the new law proposes to classify these as criminal offences and amend the Indian Penal Code accordingly. This will in turn create a stricter policy – the existing IT law mainly levies fines for such offences.
Addressing the lack of a dedicated regulatory body and absence of an efficacious investigatory and adjudicatory mechanism, the Digital India Act proposes a specialised adjudicatory and appellate system for online civil and criminal offences, which would be easily accessible, deliver timely remedies and develop a unified cyber jurisprudence. The proposed law also touches on algorithmic transparency, ethical use of AI tools and periodic risk assessments by digital entities.
The new law proposes an ‘open internet’ to ensure diverse and non-discriminatory access to internet services. It also hopes to regulate dominant ad-tech platforms and app stores to prevent market power concentration and monopolies, which would potentially require modifying the Competition Act 2002. The idea is to bring parity between big ad tech companies and content creators in terms of revenue sharing negotiations, visibility and more. Currently, the relation between these two actors is disproportionate – big tech companies dominate and set terms for content monetisation and revenue sharing.
The act’s emphasis on fair trade practices mentions age-gating, to regulate addictive tech and protects minors' data, safety and privacy on social media platforms and gaming and betting apps. It includes a mandatory ‘do not track’ requirement to avoid children becoming data subjects for ad targeting. The act also proposes defining, regulating and addressing misuse of AI tools.
Paving the way forward
The outline of the new Digital India Act suggests that it will be a comprehensive tool to deal with the dynamic digital paradigm of the modern day. Concurrent efforts toward introducing a data protection bill that secures personal data in India and a national data governance policy indicate that India is on track to develop an open, safe and trustworthy digital ecosystem. This will undoubtedly inspire confidence in local and foreign start-ups to enter the Indian tech space and directly aid in achieving the government’s trillion-dollar target. However, the issues that need to be tackled are intricate. In order to ensure that all aspects are addressed, the ongoing consultation process with stakeholders must remain transparent and robust.
This is an Insight article, written by a selected partner as part of IAM's co-published content. Read more on Insight
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