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The Policy Wrap: Haryana government sets up Startup Policy, Apple seeks access to documents in CCI probe, and more
The Policy Wrap is ADIF’s weekly newsletter on all things policy in the Indus Valley Ecosystem and beyond. Share your feedback and comments with us at email@example.com.
Information Technology (IT Act)
Government warns Twitter to comply with Information Technology (IT) Rules by July 4 or lose intermediary status
The new IT Rules (now in process of amendment) grant social media platforms the status of intermediaries. Consequently, they have to abide by the guidelines, including takedown notices from the government offices.
According to an Economic Times report, citing sources, the IT ministry issued a notice to Twitter pointing out the platform’s failure to comply with the rules. The government has now warned Twitter that it will lose its intermediary status if it does not comply with the country’s IT rules.
The IT ministry has also warned Twitter that if it continues to violate the IT Rules, it will have to face significant consequences under the IT Act. The notice read, “If Twitter Inc. continues to violate these Directions and therefore the IT Act, significant consequences under the IT Act shall prevail”… “Consequences may include ‘loss of immunity as available (to) an intermediary under subsection (1) of section 79 of the IT Act and (will be) liable to punishment to offences as prescribed in the IT Act 2000.”
This is not the first instance wherein the IT ministry has warned Twitter of the possibility of losing its intermediary status over non-compliance with regulations under the IT Act.
Reserve Bank of India (RBI) extends timeline for storing Card on File (CoF) data until September 30
The Reserve Bank of India (RBI) has extended the timeline for storing of card-on-file data by three months, i.e., till September 30, 2022, after which such data shall be purged. The decision was made in consultation with the stakeholders and to avoid disruption and inconvenience to cardholders. Earlier the due date for card tokenisation was set on June 30, 2022.
In a statement, RBI said this extended time period may be utilised by the industry for, (a) facilitating all stakeholders to be ready for handling tokenised transactions; (b) processing transactions based on tokens; (c) implementing an alternate mechanism(s) to handle all post-transaction activities (including chargeback handling and settlement) related to guest checkout transactions, that currently involve /require storage of Card on File data by entities other than card issuers and card networks; and (d) creating public awareness about the process of creating tokens and using them to undertake transactions.
Google’s ‘deceptive’ account sign-up process targeted with General Data Protection Regulation (GDPR) complaints
Consumer rights groups in Europe have filed a new series of privacy complaints against Google — on grounds of deceptive design around the account creation process that they say steers users into agreeing to extensive and invasive processing of their data.
Google profiles account holders for ad targeting purposes — apparently relying on user consent as its legal basis. But the EU’s flagship data protection law, the General Data Protection Regulation (GDPR), bakes in a requirement for privacy by design and default, as well as setting clear conditions around how consent must be gathered for it to be lawful.
Consumer rights groups in Europe argue that the design choices deployed around account creation make it far easier for users to agree to Google’s processing of their information to target them with “personalized” ads than to deny consent to its profiling of them for behavioural advertising.
The Indian Computer Emergency Response Team (CERT-In) extends the deadline of Cybersecurity Directives for MSMEs, VPNs & Data Centres
CERT-In has extended the deadline for enforcement of new norms on reporting cyber incidents and treatment of private data of users for MSMEs, VPNs and data centres to September 25, 2022.
Since its announcement in late-April 2022, the Cybersecurity Directives outlining the cyber incidents reporting and treatment norms of VPNs have been a subject of debate.
In a note shared on its website, CERT-In stated that the IT ministry and CERT-In received requests for the extension of timelines for implementation of these Cybersecurity Directions, especially from MSMEs. On the other hand, data centres, VPS, cloud service providers and VPNs also sought additional time to implement the mechanism for validation of subscribers and their customers.
Thus, to enable MSMEs to build the capacity required for the implementation of the cybersecurity directions and for data centres to build and implement validation mechanisms, CERT-In approved the extended deadline. Apart from these two categories, all other companies will have to start abiding by the directives.
Competition Commission of India (CCI)
Apple and its subsidiary seek access to documents in CCI Investigation
Apple and its subsidiary Apple Distribution International (ADI) have asked the Competition Commission of India (CCI) to supply relevant case documents submitted by a not-for-profit group Together We Fight against Apple and ADI.
In its complaint, the informant alleged that Apple was a monopoly in the market, and charges 15-30% commission on in-application purchases. The informant has also alleged that Apple’s software iOS prevents users from downloading the apps from outside its platform
However, Apple is justifying its position based on a US court judgment in a 2020 case by a US-based gaming company Epic Games. A single judge ruled in September 2021 that Apple was not a ‘monopoly’ adding that while Apple charges steep commissions, it didn’t violate anti-trust rules. Legal experts say a foreign court judgment may not have standing in India.
The CCI brushed aside this argument of Apple. “The Commission is of the view that the foreign case laws only have persuasive value in India and are not determinative,” the CCI order dated December 31, 2021, said.
400+ Crypto ads found violating Advertising Standard Council Of India (ASCI) guidelines
Earlier this year, ASCI released a set of advertising guidelines for crypto entities and other virtual digital assets including non-fungible tokens (NFT) seeking to promote their products and services through advertising in media. One of the regulations mandates crypto entities to publish a disclaimer in every crypto advertisement.
The Advertising Standard Council Of India (ASCI) has found more than 400 crypto-ads to be potentially violating advertising and promotion guidelines of virtual digital assets (VDAs), and guidelines for influencer advertising.
Indian start-ups have already laid off over 11,000 people in the last six months
Indian start-ups have laid off a little over 11,000 people in the last six months as the flow of capital is expected to remain dry for the next 18-24 months. It could get worse in the near future as experts predict that 60,000 start-up employees could lose their jobs this year.
A back-of-the-envelope calculation carried out by Business Insider India revealed that 25 start-ups in the country fired 11,615 people since January this year. About 10 of these start-ups were in the e-commerce space, and seven were from ed tech.
Seven unicorn start-ups — Ola, Blinkit, Unacademy, Vedantu, Cars24 and Mobile Premier League (MPL) — were part of the firing list as well.
Haryana government sets up Startup Policy
The Haryana cabinet on Monday, June 27 approved the New Haryana State Startup Policy 2022 which aims to promote ease of doing business, innovation and encourage the entrepreneurial spirit in the state. It also aims to build a strong policy ecosystem, while offering a robust infrastructure and liberal regulatory norms.
Under the new policy, any start-up entity recognised by the Department for Promotion of Industry and Internal Trade (DPIIT), for a period of 10 years from the date of its incorporation/registration and with an annual turnover not exceeding INR 100 Cr and located in Haryana will be eligible to avail major financial and non-fiscal benefits under the new policy
DPIIT recognises 3910 Haryana-based start-ups as of June 15, 2022. It is expected that in the next five years (within the policy period), at least 5,000 new start-ups will be set up in Haryana, providing direct and indirect employment to 75,000 persons.
T-Hub opens world's largest innovation campus for start-ups in Hyderabad, India
T-Hub aims to impact at least 20,000 start-ups through its various program interventions in the next five years. In the last six years, T-Hub has evolved to become an innovation hub. T-Hub which touched more than 1,800 start-ups through various programmes and initiatives has evolved from prototyping programmes to crafting institutionalised programmes to support the innovation journey of more than 600 corporates like Facebook, Uber, HCL, Boeing, Microsoft, and Qualcomm.
Telangana Chief Minister K Chandrashekhar Rao said, "Our state's start-up ecosystem is valued as among the top 10 global ecosystems in affordable talent. It is among the top 15 startup ecosystems across Asia in attracting funds. In 2021, the start-up ecosystem of Telangana was valued at USD 4.8 billion."
Goods and Services Tax (GST) Council waives the registration requirement for small online sellers
Clearing the decks for an easy listing of small players on e-commerce platforms, the Goods and Services Tax (GST) Council this week waived the mandatory registration requirement for businesses with an annual turnover of up to INR 40 Lakh and INR 20 Lakh for goods and services, respectively.
Recommendations of the 47th GST Council Meeting stated that “Waiver of requirement of mandatory registration under section 24(ix) of CGST Act for person supplying goods through ECOs, subject to certain conditions, such as, first, the aggregate turnover on all India basis does not exceed the turnover specified under sub-section (1) of section 22 of the CGST Act and notifications issued thereunder and, second, the person is not making any inter-State taxable supply.”
An official stated that the move will benefit approximately 1.2 lakh small traders. The official also added, “Such a move will ensure parity between online and offline suppliers, and will give a major push to ease of doing business.”
The move comes at a time when the government has set its eyes on operationalising the Open Network for Digital Commerce (ONDC). Many had pointed out that the GST registration requirement for e-commerce suppliers could prove to be an impediment in the listing of small businesses on the ONDC. With this move, the government has removed a roadblock, making it easy for platforms to onboard sellers without the mandatory GST registration.