Govt task force restarts debate on status of online gaming platforms

ByDeeksha Bhardwaj
Oct 28, 2022 12:21 AM IST

The report notes that it has to be validated whether online gaming platforms — while simultaneously acting as intermediaries and publishers — can be regulated through rules under section 79 of IT Act

A high-level inter-ministerial task force (IMTF) set up by the government to chart rules and regulations for online gaming sector has restarted the debate on whether aggregators offering such games are intermediaries or publishers, with ministries arguing the merits of taking both positions.


The report notes that it has to be validated whether online gaming platforms — while simultaneously acting as intermediaries and publishers of gaming content — can be regulated through rules under section 79 of the IT Act.

The IMTF, in its recommendations, said that in the long term it favours a new central legislation that will license the online gaming sector and also provide the government with powers to block/deregister entities violating India’s laws. It has not, however, spelt out what constitutes an online gaming platform.

The report notes that the “the revenue of the Indian mobile gaming industry is expected to exceed USD 1.5 billion in 2022, and estimated to reach USD 5 billion in 2025. The digital gaming industry in India had a CAGR of 38% between 2017-2020, as opposed to 8% in China and 10% in the USA”.

“The number of digital gaming companies in India has increased from 25 in 2010 to over 275 in 2020. The sector currently employs around 15,000 skilled developers in India,” said the report, seen by HT.

“It was deliberated in the IMTF (the task force) as to whether the section 79(2)(c) of the IT Act, providing for rule-making power to prescribe due diligence to be observed by the intermediaries to claim safe harbour under section 79(1) against third party content, can be used for regulating online gaming platforms while acting as publishers,” the report states.

According to the ministry of information and broadcasting, “online gaming platforms play a significant role in determining the information/content being offered to users, hence such platforms are not intermediaries but publishers of online content”.

The online gaming sector can be split up into two broad classifications: networks and developers. Developers are companies behind single products, for example, the popular football game Fifa is developed by the silicon valley company Electronic Arts. Networks are those on which these games become available, for example Sony’s PlayStation Network and Microsoft’s Xbox network.

In these, the networks loosely act as platforms while the developers can typically be considered to have a similar role as that of a publisher. But the question of which tag – publisher or intermediary – is used for the latter is complicated because even in the case of the latter, standalone games host multiple players, who often communicate with each other. Whether the responsibility of this speech lies with the user or the developer of the game on which the user plays will be determined by the classification.

If online gaming platforms are recognised as intermediaries, they will be exempt from penal action for publishing third party content. However, as publishers, they will be held responsible for such content. So far, gaming platforms have been able evade these provisions by citing their role only as intermediaries. The task force takes cognisance of the limitation of this approach with regard to enforcement with punishment and blocking powers, such rules may not be sufficient to completely address the issues under the existing law.

For example, if the current scope of section 69A does not allow blocking of offshore unauthorised gaming or gambling websites, it may be difficult to expand such scope through rules under section 79 of the IT Act.

The department of legal affairs is of the view that since “gaming platforms can qualify as both intermediaries and publishers, appropriate provisions under the IT Act and other ancillary Acts may be reviewed to cover the areas of responsibilities and liabilities of the online gaming platforms”.

The Union ministry of home affairs is also of the view that a central law or the proposed Digital India Act “may be considered for a long-term measure, however as an interim solution, online gaming service providers may be considered as ‘intermediary’ under the purview of the IT Act, 2000 and a suitable ministry may administer the content and other regulation of the gaming platform by enacting new rules under the IT Act”.

DPIIT has also concurred with the IMTF recommendations. “Accordingly, the IMTF recommends that since the online gaming platforms can qualify as both intermediaries and publishers, they can be regulated through rules enacted under section 79 and section 69A of the IT Act. The set of rules may specify conditional immunities to online gaming platform while acting as intermediary from liability for third party content,” the report states.

However, on the above recommendation, ministry of information and broadcasting in its explanatory note submitted that as online gaming entities are publishers and not intermediaries, section 79 cannot be used for regulating online gaming platforms. It has further commented that rules framed under a central law may not be able to override state laws leading to inconsistency of regulation across India. MIB has suggested that an appropriate central legislation may be framed for regulation of online gaming and framing of rules under the IT Act may not serve the desired purpose

The scope of the IMTF covers only online gaming i.e. games of skill (including real money games of skill), and the issues of online gambling have been excluded from its scope, since “betting & gambling” is a state subject.

The representative from the department of consumer affairs said that while the Consumer Protection Act (CPA) can be used to regulate online gaming to the limited extent of unfair trade practices and misleading ads, overall regulation of the online gaming industry lies outside the scope of CPA.

On July 14, Meity held an in-depth consultation with gamers, with minister of state Rajeev Chamdrashekar presiding over the meeting. One key issue that emerged in this meeting was the lack of rights of gamers under Indian law. “Presently, online gaming platforms are also not legally required to follow basic requirements like protecting gamers’ data, preventing sexual harassment or inappropriate behaviour on the gaming platform, having an anti-bot policy,” the report states.

Many offshore betting and gambling websites which are illegal in India have become popular among Indian users. Despite being based outside India, some of these websites are widely advertised in Indian newspapers and TV channels, and allow users to transact in Indian rupees through popular digital payment modes such as internet banking, UPI and popular wallets. In this direction, MIB has issued an advisory on 13th June, 2022 to print and online media to refrain from publishing advertisements of online betting platforms.

Vivan Sharan, from the tech policy think tank Koan Advisory, said that one must move from an entity-based understanding to an activity-based classification of intermediaries and publishers. “To the extent that online gaming companies perform an intermediation function between users, such as to collect monies, build reward pools, and enforce gameplay rules, they are certainly intermediaries. And to the extent that companies provide proprietary content-based gameplay, they are publishers. Future gaming regulation should be based on a hierarchy of public interest priorities, and such agility is a prerequisite to a trillion dollar digital economy,” he said.

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