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To regulate Net intermediaries or not is the question

Given the disruption to public order caused by the mass exodus of North-Eastern Indians from several cities, the government has had for the first time in many years, a legitimate case to crackdown on Internet intermediaries and their users.

Sunil's column was published in the Deccan Herald on August 26, 2012.

There was, of course, much room for improvement in the manner in which the government conducted the censorship. But the policy question that becomes most pertinent now is: do we need to regulate Internet intermediaries further? The answer is yes and no.

There are areas where these intermediaries need to be regulated in order to protect citizen and consumer interest. But to deal with rumour-mongering and hate speech, there is sufficient provisions in Indian law to deal with the current disruption in public order and any similar disruptions in the future.

It is a common misunderstanding to assume that all civil society organisations that advocate civil liberties on networked technologies are regulatory doves that wish to dismantle regulation of the private sector and allow them complete free hand for innovation and, perhaps, causing harm to public interest.

The opposite is also not necessarily true. We are not hawks, those that believe in maximal regulation of the private sector. The state should regulate the private sector in areas where the citizens are unable to protect their own interest and self-regulation is inadequate. But there are many other areas where regulation needs to be dismantled in the interests of citizen and public interest.

Dr Rohan Samarajiva, founder of  a Colombo-based regional policy think tank LIRNEasia, explains this best using the ‘law of soft toys’. When his daughter was young he told her that in Sri Lanka there was a law which mandated that every time she got a new soft toy, she would have to necessarily give away another one.

The regulatory lesson here is: the mandate for regulation cannot keep endlessly expanding. As the government moves into new areas of regulation, it should also exit other older areas where regulatory rupee is providing limited returns. These decisions should be based on evidence of harm caused to citizens and consumers. The following are a list of areas where regulation is required for Internet intermediaries:

Privacy: India needs the office of the privacy commissioner established and an articulation of national privacy principles through the enactment of the long awaited Privacy Act. This privacy commissioner should be able to  investigate complaints against intermediaries, proactively investigate companies, order remedial action and fine companies that violate the principles and other policies in force. Remedial action could require change in policies, features, data retention policies and services etc.

Competition: Many of these intermediaries have been taken to court on anti-trust complaints, fined and subjected to remedial action by regulators in America and Europe.

Earlier this year, has filed a complaint against Google at the Competition Commission of India (CCI) alleging anti-competitive practices in its Adwords program. In addition, based on a report submitted by Consumer Unity & Trust Society (CUTS), a civil society organisation, CCI has initiated an investigation into Google's search engine for anti-competitive practices. If they are found guilty of breaking competition law they could be fined up to 10 per cent of their turnover.

Speech: Article 19(2) of the Constitution permits Parliament to enact laws that place eight categories of reasonable restrictions on speech. Unfortunately, the Information Technology Act and its associated rules attempts to expand these restrictions and in addition does not comply with the principles of natural justice. Ideally, all those impacted by the censorship should be informed and should be able to seek redress and reinstatement for the censured speech.

The policy sting operation conducted by the Centre for Internet and Society (CIS) last year demonstrated that intermediaries are risk-averse and tend to over-comply with takedown notices. There is a clear chilling effect on speech online and it is important that the Act and rules be amended at the earliest.

Intellectual Property: Policies that fall under this inappropriate umbrella term for many differently configured laws make the yet unproven fundamental assumption that granting limited monopolies to rights holders, usually corporations, will result in greater innovation. However, citizen and consumer interest is protected through provisions for exceptions and limitations in laws such as copyright, patent, trademarks etc. Some examples of these safeguards that guarantee access to knowledge in Indian law include compulsory licences, patent opposition, fair-dealing etc.

There are many other areas where special treatment may be required for intermediaries. For example tax law needs to handle evasion techniques like the Double Irish and the Dutch Sandwich. Given my lengthy wish-list of regulation of Internet intermediaries, why then has CIS become an NGO member of the Global Network Initiative?

This is because I believe that technological development happen too quickly for us to purely depend on government regulation. Self-regulation has an important role to play in keeping up with these rapid changes. As self-regulatory norms mature they could be formalised into policy by the government.

Therefore, I consider it a privilege that CIS has been accepted as a member of this self-regulatory initiative and we influence GNI norms using our Indian perspective. However, when self-regulation fails to protect public interest, then the government must step in to regulate Internet intermediaries.