New Delhi: Information Technology Act of India, the world`s second most populous country and behind only the US and China in Internet users, is "ill-suited" to deal with social media and user-generated content, a report by Global Network Initiative (GNI) said today.
The report, Closing the Gap: Indian Online Intermediaries and a Liability System Not Yet Fit for Purpose, prepared by trade-related affairs consultancy Copenhagen Economics said that online platforms that support user-generated content can contribute about Rs 2.49 lakh crore to India`s GDP by 2015.
GNI -- a non-government organisation promoting Internet freedom and privacy rights -- has tech firms like Google, Facebook, Microsoft among its members including civil society groups (human rights and press freedom groups), investors and academics.
"India`s Information Technology Act, hurriedly amended in 2008 and updated with rules for Internet intermediaries in 2011, is ill suited to deal with ICT innovations such as social media and user-generated content, with negative consequences for intermediaries and users alike," GNI Board Chair Jermyn Brooks said in the report.
India is a country of particular importance to GNI. As the world`s largest democracy, the country trails only the US and China in the number of Internet users, despite an Internet penetration rate of only 10 per cent, he added.
Hundreds of millions of Indians are on the verge of gaining Internet access, particularly via mobile devices, with huge opportunities for users as well as serious challenges.
"India`s robust tradition of freedom of expression and its dynamic ICT (information communication and technology) sector are threatened by anxieties around issues such as hate speech, political criticism, and obscene content," Brooks said.
The Information Technology Act, 2000 was amended by the Information Technology (Amendment) Act, 2008 and was enforced on October 27, 2009. It provides legal framework to address various types of cyber crimes and prescribes punishment.
In 2011, the government had notified the IT (Intermediary Guidelines) Rules 2011 under Section 79 of the Information Technology Act pertaining to liability of intermediaries.
It requires Intermediaries, which include national and international social networking sites, to observe due diligence while discharging their duties.
The intermediaries shall inform the users of computer resources not to host, display, upload, modify, publish, transmit, update or share any information that is harmful, objectionable, affect minors and unlawful in any way.
According to GNI`s report, online platforms that support user-generated content can become an important part of India`s Internet economy and contribute around Rs 2.49 lakh crore (USD 41 Billion) by 2015, in addition to the contribution of other elements of the Internet economy.
"Two years from now their GDP contribution may increase to more than 1.3 per cent, provided that the current legal liability regime is improved," it added.
With India emerging as one of the fastest growing Internet user markets, the report aims to bring to light the importance of providing protection to Internet intermediaries in India in order to create an environment that is conducive to promoting innovation and economic opportunity, Brooks said.
"Reforming the liability regime for India`s Internet intermediaries, particularly the Information Technology Act, would not only help to protect the rights of users, but would also bring significant economic benefits for India`s Internet economy," Brooks said.
The report said the projected contribution of Internet intermediaries to Indian economy -- if the liability regime is reformed -- would rival the current contribution of states like Delhi or Haryana to the country`s GDP.
The uncertainty created by the current liability regime in India creates excessive costs for online intermediaries and new start-ups, which could otherwise contribute more to the Indian economy and increase growth.
The report highlighted the cases of companies like MouthShut, Quikr and Indijobs among others who have suffered due to the uncertain legal liability regime in India.
Online intermediaries are companies providing a platform for exchange of goods, services, or information between third parties on the Internet.