The FDI cap in digital media will create an equitable field
The policy decision to cap foreign investment in digital news media at 26% is welcome for the simple reason that it levels the playing field between digital and print media companies (and one of the main considerations for any policy is that it should be equitable). In 2016, the Narendra Modi government allowed up to 49% foreign investment in television news channels, citing the need for higher investments in the space, and while this was a plausible argument, it was still not a fair one. As for digital news media companies, there was no limit on foreign investment (it could be 100%, as is in the case of some). But print, TV, and digital news media companies all share the same advertising pie, perform the same function, and the policies for them should be the same. It’s 26% for print and should be 26% for digital.
That’s the easy part. Everything else follows. Sure, the ministry of information and broadcasting will now have to weigh in on what happens to digital news media companies where foreign stake already exceeds 26% -- fortunately. there are established precedents for this – and also figure out how to treat the digital extensions of TV companies (will the cap for these be 26% or 49%?), but this too, is easily done. There are more sticky issues, such as whether the restriction on print and TV news media having Indian citizens as editors will apply to digital news media, and on the applicability of the rules to foreign news websites that can be accessed in India.
But the really tough part for the ministry is to define digital media companies. Would an aggregator app, such as Flipboard or DailyHunt qualify as a digital media company? What of Facebook and Google, which have a lot of news content, and also make money off this, but which continue to insist they are intermediaries? This intermediary protection has allowed such companies to present themselves as mere platforms, and escape not just the regulations news media companies have to respect, but, more importantly, the responsibilities that come with this. All print and TV media companies are responsible for the content they publish or broadcast; Facebook and Google consistently maintain that they aren’t. Indeed, because moderation or editing of the content on the platforms will mean they are no longer mere intermediaries, these companies typically avoid doing so. Yet, their business model is that of the classic media company – built largely (and sometimes solely) around advertising. When it frames the rules for digital news media, the I&B ministry would do well to address this issue. Contrary to what some would have us believe, the issue here isn’t about censorship or controlling the narrative or freedom of expression. Nor is it about fostering innovation. It is simply about ensuring that companies in the same business operate under a similar set of rules.