They say the classification must factor in features and services that platforms provide rather than focus only on their user base. This, they say, can potentially help reduce their compliance burden under the proposed Act.
Digital intermediaries currently include internet service providers, cloud service providers, consumer-facing social media platforms, and video sharing sites.
Once an intermediary is defined based on size, the classification becomes very broad, an executive at one intermediary with over 200 million users told ET.
“There are many services that a platform like ours provide, but this classification is based on numbers…,” the executive said.
The classification must be based on the features and services that platforms provide, the person said. “If an e-commerce site has to monitor conversations and build tools around that, it is an added burden for them,” the executive said.
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Under the IT Rules notified in February 2021, social media intermediaries (SMIs) are those that enable online interaction between two or more users and allow them to create, upload, share, disseminate, modify or access information using their service.
SMIs with over five million registered users are called significant social media intermediaries (SSMIs).
SSMIs are required to appoint India-based officers to ensure compliance, coordinate with law enforcement, and redress grievances.
They are also expected to have a physical contact address in India, publish monthly compliance reports, use automated tools to identify and remove illegal content while also constituting robust grievance redressal mechanisms and identify copyrighted/ sponsored content.
The executive of the intermediary quoted earlier said it does not see itself as an SSMI despite the size of its user base since the platform does not allow social interactions or discoverability of content.
“There is no real risk of content going viral and yet companies like ours are in the grey zone. Proactive monitoring is challenging. We are not a social media platform and for many others like us to build technical tools for content monitoring doesn’t make sense. We have invested hundreds of thousands of dollars in this,” the executive said.
Some intermediaries told ET that their views were not reflected in the IT Rules.
With the Digital India Bill set to replace the two-decade-old IT Act (under which the IT Rules also fall), they expect their views – which they will present during consultations – to be acted upon. The Bill is expected to be put up for consultations shortly.
Services primarily developed for internal use by organisations, educational institutions, and businesses are different from social media intermediaries and other public-facing services, said Rohit Kumar, founding partner at New Delhi-based public policy firm The Quantum Hub.
“Business or enterprise software is designed specifically for use by businesses and companies. These can include unified communication tools like Microsoft Teams, Zoom and SaaS services that provide HR management, collaboration, file sharing and customer management solutions such as Zoho or Oracle,” he said.
Regulating such services in the same manner as public-facing platforms is only likely to increase the compliance burden for service providers, Kumar added.
SMIs not only include Twitter, Facebook, and WhatsApp but also services like matrimonial apps and enterprise communication services such as Zoho or Webex, he said.
The European Union’s Digital Services Act, however, recognises these distinctions, and divides intermediaries into three broad categories – conduits, caching and hosting services.
An executive at another intermediary which has over 300 million users globally told ET that companies in India that offer enterprise communication solutions and have nothing to do with content moderation, have had to shoulder the compliance burden.
“There needs to be risk-based classification of intermediaries based on types of services, and consumers under the upcoming Digital India Bill,” the executive said. “For a regulation that is not applicable to us, there is a significant investment required to comply because the cost of non-compliance is very high.”
Currently, intermediaries are required to retain information of their users registering on their platform for 180 days, and respond to law enforcement requests within 72 hours. If they do not oblige, they can lose their safe harbour protection guaranteed under the IT Act.
