Legal & Industry Updates - December 2022
SPECIAL EVENTS
Corporate Whistle Blower Policy in India, December 08, 2022
The team at Ivy Law participated in a webinar on “Corporate Whistle Blower Policy in India” organized by ASSOCHAM. The key highlights of the webinar were the importance of the Companies Act, 2013 and Securities and Exchange Board of India (“SEBI”) to put in place a whistle blower policy with the aim to attain various benefits such as combating fraud, avoiding reputational damage, minimising losses, raising awareness and creating open culture. The webinar emphasized on how a strong policy framework is quintessential for attaining a good corporate governance atmosphere. Further, the need to protect the rights of the employees and directors who raise their voice against any malpractice or illegal act by reviewing and revisiting the effectiveness of whistle blower policy from time to time was also discussed exhaustively.
LEGAL & INDUSTRY UPDATES
The Bureau of Indian Standards (“BIS”) Publishes Standard for Online Consumer Reviews (source)
BIS, on 5th December, 2022, has published Indian Standard IS 19000:2022, 'Online Consumer Reviews - Principles and Requirements for their Collection, Moderation and Publication' which provides requirements and recommendations for the principles and methods for review administrators to apply in their collection, moderation and publication of online consumer reviews. The standard is meant to protect consumer interest from fake and deceptive reviews on electronic-commerce (“e-commerce”) platforms and provide ways to 'verify a review author’ by email, telephone, or text message to confirm the registration. The standard is currently voluntary and non-binding on internet and e-commerce firms, however, the Central Government (“CG”) ensured that they would be made mandatory if violations continue.
Amid Growing Cyber Threats, CG Issues New Information Technology (“IT”) Guidelines for Key Government Installations (source)
CG, on 13th December, 2022, has issued a standard operating protocol for all its employees across various ministries and public sector units which will involve basic hygiene such as switching off computers, signing out of emails and updating passwords After plugging all technical glitches following a major cyberattack on one of the top Indian hospital, CG has come out with a digital procedure concerning all important installations with the intent to not just strengthen the safety firewall but to also secure servers with critical data. Further, all those employees who do not adhere to the standard will face strict disciplinary action against them.
CG Proposes to Curb Dubious E-Commerce Practices (source)
As reported by the Economic Times, CG is planning to curb the dubious practices adopted by various e-commerce platforms, also popularly known as dark patterns, wherein the user interfaces are crafted to trick or manipulate users into making choices that are detrimental to their interests. Dark patterns are unfair trade practice and a cause of concern as they become more prevalent in ecommerce and therefore needs to be curbed.
CG to Set Up Appellate Panels to Redress Social Media Related Grievances (source)
Following the amendments under the new Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, CG has proposed to set up appellate panels to redress the grievances that the users may have against social media platforms on hosting contentious content. Such appellate panels shall comprise of a chairperson and two whole-time members. CG further stated that a user could be de-platformed only in instances which pertain to the interest of the sovereignty, security, and integrity of India or if the content is unlawful in nature.
Parliamentary Panel to Pitch for Greater Scrutiny of ‘Systematically Important’ Digital Platforms (source)
The Parliamentary Standing Committee on Finance is preparing to pitch for identifying “systematically important” digital platforms in order to place them under greater scrutiny and impose restrictions on them from carrying out certain activities. These digital platforms will further be required to make mandatory disclosures on regular basis. The panel is prepared to suggest sweeping changes to the country’s competition framework including allowing for ‘ex-ante’ restrictions to prevent any anti-competitive practice and protect the consumers.
The Competition Commission of India (“CCI”) Consider Deploying New Tools to Check Anti-Competitive Practices (source)
As reported by the Economic Times, amid rapidly changing and evolving digital landscape that is posing new challenges for competition law enforcers and questioning the traditional parameters of competition regulation, the CCI has requested fair-trade watchdogs to devise new tools and develop innovative perspectives on the application of the existing instruments in order to make sure that the anti-competitive practices are kept in check and enforced decorously.
The Ministry of Information and Broadcasting (“MIB”) Urges Google, LLC (“Google”) to Comply With Advisory Against Online Betting Advertisements (source)
MIB has urged Google to comply with its advisory to refrain from publishing or broadcasting advertisements of online betting platforms or any surrogate product depicting them, citing that gambling in any form, be it online or offline, is illegal in India. MIB issued the letter to Google after a violation of its previous advisory by the tech giant came to its notice. Various online betting platforms were advertising themselves as professional sports blogs, sports news websites, etc. while providing an indicative list of online betting platforms which were using news for surrogate advertising.
Internet Firms Requests CG to Relax the Definition of Child in the Digital Personal Data Protection Bill, 2022 (“PDP Bill”) (source)
As reported by the Economic Times, various social media and internet platforms have expressed their concerns to the Ministry of Electronics and Information Technology (“MeitY”) regarding the definition of child in the PDP Bill wherein a child is defined as a person who is below the age of 18. These platforms will have to seek verifiable parental consent for processing any data for users below the age of 18 years and therefore seeking relaxation on this age limit asserting that instead of safeguarding youngsters from the harms of the internet, these restrictions may adversely impact their learning capabilities and growth in crucial teenage years.
Significant Controls to CG Under the PDP Bill to Hit Investments in Data Centres (source)
As reported by the Economic Times, the PDP Bill has exempted CG notified data fiduciaries from several compliance burdens such as provisions dealing with informing an individual about the purpose for data collection, collection of children’s data, risk assessment around public order and the appointment of data auditor, among other such exemptions. However, these broad exemptions granted to executive arms of CG from PDP Bill's application could make it harder for companies to invest in data centres and data processing activities in India.
MeitY, Google to Help Homegrown Startups Scale Their Application Businesses (source)
Meity Startup Hub has announced a collaboration with Google with the aim to guide early to mid-stage homegrown startups under the Appscale Academy program, 2023 which will include training application developers to build refined user-interface, develop ethical practices to protect user data, bring efficiency in their business model and offer tips on monetisation strategies. They are further dialling up their efforts to increase participation from startups beyond metro cities in India and will also be launching a multi-city roadshow aiming to engage over 1,000 startups in various cities across India.
SEBI Questions Old Venture Capital Funds (“VCFs”) On Terms Extensions (source)
SEBI has reportedly asked VCFs about their term extensions beyond their lifespan and has further asked to share the number of extensions that have been taken for the various schemes, the tenure of the schemes as stated in the private memorandum and the deadline for exiting all investments. The lifespan of a VCF is typically 10 years. There are about 185 such old VCFs which are registered under the erstwhile SEBI VCF Regulations, 1996.These entities are required to share the information with SEBI’s supervision, enforcement and compliance division for alternative investment funds and foreign portfolio investors.
CG: Employees can’t Take Up Work That is Against Company Interests (source)
As the debate rages over the legality of moonlighting in IT sector, CG, while quoting existing industrial laws, clarified that the workers cannot take up any extra work that could be against the interests of their employers. As per Industrial Employment (Standing Orders) Act, 1946, a workman shall not at any time work against the interest of the industrial establishment in which he is employed and shall not take any employment in addition to his job in the establishment which may adversely affect the interests of the employer. While existing labour laws in India prohibit dual employment for factory workers, there is no legal framework at present for moonlighting by employees working in IT companies.
Disclaimer: The updates provided in this document is not a legal opinion and does not claim to capture all legal developments related to the subject matter stated herein. It is advisable to seek legal advice for accurate applicability, prior to relying on the updates for any legal matter.