Welcome, legal hitchhikers, to another voyage through the dynamic frontiers of the Media and Entertainment (M&E) space. This month, we're channelling our inner Arthur Dent as we navigate (yet again) the uncertainties around the retrospective Goods & Services Tax ("GST") levy on online gaming companies. For the uninformed, imagine being stuck in a Vogon airlock, sharing the void with a Betelgeusian and facing the threat of imminent asphyxiation. It is precisely at times like these that life's mysteries loom large, and for us, that means holding our breaths as we await a clear judicial determination on the taxation framework for the online gaming industry.

In the words of Arthur Dent himself, 'it's at times like these that I really wish I'd listened to what my mother told me when I was young'. On being inquired by a fellow Betelgeusian companion, Arthur finally confessed, 'I don't know, I didn't listen' (Hitchhiker's Guide to the Galaxy). And so, dear readers, let us be diligent listeners to the legal cosmos. For in the vast expanse of digital dungeons and the surge of star-studded deepfakes, we help you navigate everything from the trove of copyright infringements to the new Telecommunications Act, 2023, with the wisdom gleaned from both mothers and perhaps, a few interstellar attorneys.

This volume borrows from its predecessors and highlights some key developments from the last two months in what has been an eclectic mix of legal tussles, new laws, and court orders on challenges raised against scenes depicted in movies like 'Antony' and 'Aankh Micholi'. In the true sense of the new year, here's your twentieth edition as a double digest of the Recap, highlighting some key developments in the M&E and Gaming space from December 01, 2023, to January 31, 2024.


MeitY issues advisory to all intermediaries to comply with existing IT Rules in relation to Deepfakes

The struggle to contain the deepfake menace by social media platforms has led the Ministry of Electronics and Information Technology ("MeitY") to issue yet another advisory to all intermediaries on December 26, 2023. The directive specifically targets the growing concerns around misinformation powered by AI (deepfakes). The advisory mandates that intermediaries communicate prohibited content clearly and precisely to users.

The ability to create entirely fictional yet convincing content involving real life people through the tap of a few buttons is a daunting prospect, especially with the power of social media. With the mass availability of AI-powered video (such as face-swap and Gan) and audio tools, the Indian internet has become rife with such content of influential public figures. Recent controversies involving the Prime Minister, cricketer Sachin Tendulkar and the actress Rashmika Mandanna have raised concerns at the highest levels because some of this content may have potentially destructive effects, simply because of how realistic it can appear.

The current legal regime is not specialized towards targeting deepfakes but rather consists of the offences which get triggered as a result of such deepfake content. This includes offences under the Indian Penal Code, 1860 ("IPC") such as Section 416 (cheating by personation), and Section 465 (forgery). The more specialized legislation in this case, the Information Technology Act, 2000 ("IT Act"), also contains offences emanating from the use of information technology, which could include Section 66D (cheating by impersonation). Offences under the IPC and the IT Act targeting sexually explicit content can also be invoked against deepfakes of a sexually explicit nature. The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 ("IT Rules 2021") also imposes certain obligations on intermediaries, which forms the crux of the government's answer to deepfakes. The IT Rules 2021 cast a specific obligation on intermediaries to inform users of illegal content that should form part of the platform terms, and an obligation to make 'reasonable efforts' to remove content such as deepfakes which violate laws. Rule 3(1)(b) contains a list of illegal content which social media platforms must police, else they will risk losing their protection as intermediaries under the IT Act.

MeitY was also questioned in the Parliament on the deepfake issue and its responses to these questions towed the line of status quo (discussed in detail in our 'Parliament Capsule' section below). In its recent advisory, MeitY has stated that the content not permitted under the IT Rules 2021, in particular those listed under Rule 3(1)(b) must be communicated to the users in clear and precise language including through its terms of service and user agreements. Further, the advisory emphasizes that digital intermediaries must ensure that their users are informed about penal provisions, including those in the IPC and the IT Act in case of Rule 3(1)(b) violations. This formal advisory by MeitY also comes with a warning that the government will be closely observing the compliance of intermediaries in the coming weeks and follow this up with further amendments to the IT Rules 2021 (or other laws) if required.

You can read more about this development as reported by the Indian Express and the Hindu here and here respectively.

The Telecommunication Bill, 2023 receives President's Assent

The Telecommunications Act, 2023 ("Telecom Act") recently received the President's assent and is set to overhaul and replace the country's antiquated telecom laws such as the Indian Telegraph Act, 1885 and the Wireless Telegraphy Act, 1933. The Telecom Act consolidates the law on telecom and makes several changes to the erstwhile regime. Some of the relevant changes include:

  • Definition of 'Telecom': The Telecom Act was preceded by consultations on a draft bill with some of the concerns raised therein leading to changes in the Telecom Act, most notably the exclusion of 'OTT communication services' from the definition of 'telecommunication services'. The definition of 'telecommunication services' has been simplified simply stating "any service for telecommunication" to be a telecommunication service.

    The definition of 'telecommunications' remains the same as before i.e., "transmission, emission or reception" of a message whether or not the message has been subjected to "rearrangement, computation or other processes". Despite the omission of an explicit mention of 'OTT communication services' and 'broadcasting services' from the definition of 'telecommunication services', the definition of 'telecom' itself is debatable on whether it still includes internet-based communication services, OTT communication services and broadcasting services, as it is wide enough to cover the same.

    Some respite may be taken from an official statement made by the Union Minister Ashwini Vaishnaw with a joint charge of MeitY and the Ministry of Communications that "there is no coverage of OTT in the new telecom bill passed by the Parliament". According to the minister, OTT services will continue to be governed under the IT Act and by the MeitY as has been the case until now. However, it remains to be seen how the law is eventually interpreted and implemented by the government.

  • Interception and Suspension by the Government: Just like the prior regime under the Indian Telegraph Act, 1885, the Telecom Act empowers the Central Government or a State Government with wide powers to prevent transmission and interception of messages or a class of messages exchanged between any persons or class of persons. In terms of new additions, the law now explicitly extends this power of transmission to or from 'any telecommunication equipment' (or 'class of telecommunication equipment'). The power also extends to possible decryption/monitoring as the law explicitly allows disclosure in an 'intelligible format' to an officer. Arguably, the Telecom Act has slightly extended the scope of powers compared to the erstwhile regime. Unlike before, the Telecom Act also makes an explicit mention of the suspension of telecom services; however, the circumstances for exercising this power remain the same as before

You may read more on this development as reported by the Economic Times here and here.

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