technology

Industry groupings seek withdrawal of personal liability provision


Top industry groupings have sought the withdrawal of a specific clause in India’s new IT rules, which imposes a personal criminal liability on the chief compliance officer of significant social media companies such as Twitter and Facebook.

In multiple representations made to the government, the Internet and Mobile Association of India (IAMAI), the Confederation of Indian Industry (CII) and the Federation of Indian Chambers of Commerce and Industry (FICCI) along with others such as US- India Business Council (USIBC) and the US-India Strategic Partnership Forum (USISPF) have asked for the provision to be dropped in the interests of “promoting ease of doing business” and better “enforcement of laws”.

While several companies including Google and Facebook have complied with the new IT Rules, the
stand-off between Twitter and the government of India over the issue of appointing a chief compliance officer continues. Experts are of the view that the personal criminal liability of the compliance officer is one of the main reasons why companies are hesitating to name local officers for this role.

In its letter sent to the ministry of electronics and information technology (Meity) in the first week of June, IAMAI said the personal liability clause for the chief compliance officer should be “replaced by an appropriate provision which is “proportional to the harms” caused by noncompliance.

The industry groupings– which count top social media and Internet companies including the likes of Google, Facebook and Twitter as members–said the provision on personal liability affects employee confidence and morale and asked for it to be dropped. They also pointed out that modern corporate jurisprudence is leaning towards replacing criminal liability with monetary penalties.

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Bhanupreet Saini, the head of public policy at IAMAI told ET that the grouping has requested Meity to finalise and publish the Standard operating procedures (SOPs) for relevant provisions. “The SOPs or guidelines will add safeguards for the employees and help in confidence building for such officers in India,” he added.

In a letter sent to Meity, Nisha Biswal, president of the USIBC pointed out that the possibility of imposition of criminal liability on the employees of an intermediary is at odds with modern corporate criminal liability jurisprudence.“

Terming the provisions as “ deeply concerning”, FICCI said that when “coupled with the erosion of safe harbour protection under the IT Rules 2021, ( it) would greatly and unfairly enhance legal risks for employees of entities covered by the IT Rules 2021.

“At a time when the corporate criminal liability regime in India is changing to improve ease of doing business by replacing criminal liability with penalties, these provisions under the IT Rules 2021 run counter to the trend,” the industry grouping stated.

Requests For Clarity

In letters written days before the revised regulations came into effect on May 26, the industry bodies had also sought an extension of the timeframe for the law to come into effect. Apart from the waiver on personal criminal liability of employees, they had also requested that only a few central government agencies be authorised to seek content takedowns as well as specific information from social media platforms.

The industry lobbies had also sought protection of privacy and security for users that could be compromised in tracing the “first originator of information,” they said. WhatsApp is the only company to have challenged the IT Rules on its mandate to trace the first originator of the message by citing freedom of speech and expression.

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Legal experts are of the view that world over, governments are trying to address the issue of misinformation and disinformation. “No government is threatening private employees with criminal liability for user generated content. This goes against the intent of the IT Act itself and the safe harbour provisions provided to platforms,” said Mishi Choudhary, technology lawyer and legal director at the Software Freedom Law Centre in New York.

If we are serious about business and rights, we should remove this provision,” she added.



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