Regulation of OTT platforms in India

In the rapidly evolving digital era, over-the-top (OTT) platforms have emerged as a transformative force in India’s media and entertainment landscape. As the world witnesses a paradigm shift in how content is created, curated, distributed, and consumed, the relevance of OTT platforms for Indian audiences cannot be overstated. Its unique importance came to the fore particularly during the pandemic. Even after it, audience got accustomed to it.

OTT platforms are not only changing the digital landscape but also transforming the way Indians perceive entertainment. Traditional TV series that used to run for years are now being replaced by TV series on Netflix, Amazon Prime, etc. This shift reflects the changing market dynamics from traditional to technological.

The digital revolution in India has been remarkable. With a burgeoning population of internet users, cheap data, and the rapid proliferation of smartphones, our country has become one of the largest and most dynamic digital markets globally. In this changing world, OTT platforms have played a pivotal role in shaping not only our entertainment preferences but also our cultural narratives, socio-political discourse, and consumer behaviors.

Given their increasing relevance and influence on society, there is a growing need for proper regulation of OTT platforms in India. While these platforms offer a wide range of content choices to consumers, they also raise concerns related to issues, such as censorship, age-appropriate content, and net neutrality.

Current state of regulation
India currently lacks a dedicated regulatory framework to oversee OTT platforms. Since 2015, the Telecom Regulatory Authority of India (TRAI) has released several consultation papers on this matter. Despite these efforts, there have been no definitive recommendations or regulations put into effect. TRAI, even at times, has advocated for a market-driven approach rather than regulatory intervention. However, the debate surrounding the regulation of OTT platforms seems to have led to a conclusive point, with the Information and Broadcasting Ministry planning to introduce a legislation governing the OTT platforms.

The most important regulations governing OTT platforms in India are the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021. These rules categorize digital media into three segments – publishers of news, intermediaries, and OTT platforms. As per the rules, OTT platforms must adhere to content classification, age ratings, and self-regulation. Content removal and compliance officers are mandated, along with grievance redressal mechanisms. The government has the authority to block content in exceptional cases. Traceability of originators applies to some intermediaries but may have broader implications.

These rules represent a significant step in regulating OTT platforms and aim at providing structure and guardrails to content regulation and user protection. However, they have faced criticism for potential challenges related to privacy and freedom of expression.
Fairer playing field for TSPs

Telecommunication service providers (TSPs) in India are subject to a range of regulations, fees, and quality standards. In contrast, OTT platforms that offer similar services often operate with fewer restrictions. This disparity creates an uneven playing field, potentially affecting the revenue streams of TSPs. Telecom operators contend that the revenue generated by OTT platforms is closely linked to the usage of their networks. From this perspective, it is generally felt that OTT platforms should make a proportional contribution toward the infrastructure costs, promoting a more equitable partnership.

Regulating the competition
Regulating OTT platforms from a competition law perspective is crucial for several reasons. It can help address concerns related to monopolistic behavior in the digital media industry. By preventing the abuse of dominant positions, authorities can promote healthy competition and prevent the concentration of power in the hands of a few players in the OTT industry.

Impact on consumers
A notable concern centers on the potential unintended consequences of implementing a broadband infrastructure levy. With this levy, OTT platforms might face increased operational expenses, which could, in turn, lead them to pass on these additional costs to their users. This might manifest as enhanced subscription fees or a reduction in the availability of free services, ultimately placing an extra burden on the end-consumer.

Why do we need a new legislation?
The present framework of legislations in India is facing challenges in effectively regulating OTT platforms. The absence of specific laws or rules exclusively dedicated to OTT platforms makes it difficult to address the unique characteristics and concerns associated with these platforms. The existing regulations, such as the IT Rules, Copyright Act, 1957, Indian Penal Code (IPC), and Competition Act, 2002, were not designed specifically for OTT platforms. As a result, they do not adequately cover all aspects related to content classification, consumer protection, data privacy, and competition law in the context of OTT platforms.

Telecom Bill is expected to be tabled in the Parliament during the Winter Session. The new Bill seeks to replace three current laws – the Indian Telegraph Act, 1885, the Indian Wireless Telegraphy Act, 1933, and the Telegraph Wires (Unlawful Possession) Act, 1950 – to bring regulation up to speed with technology. In a recent release, the Department of Telecommunications clarified that OTT platforms will not be categorized as telecommunication services in the upcoming Bill. This comes after TRAI’s prior recommendation to impose regulations on OTT communication apps.

The evolving nature of the digital media landscape and the rapid growth of OTT platforms pose newer challenges for regulators to keep pace with technological advancements and changing consumer preferences. The absence of a comprehensive regulatory framework dedicated to OTT platforms can lead to inconsistencies and ambiguity in addressing issues, such as content censorship, age-appropriate content classification, and responsible content creation.

Furthermore, the absence of specific regulations for OTT platforms can also create challenges related to enforcement and compliance. The lack of clarity on legal obligations and responsibilities for both platform operators and content creators hinders effective regulation and consumer protection.

To address these challenges, there is a need for a comprehensive regulatory framework that specifically caters to the unique characteristics of OTT platforms. Such a framework should strike a balance between creative freedom, responsible content consumption, consumer protection, and fair competition. It should also consider international best practices and evolving industry standards to ensure that regulations remain dynamically relevant in a rapidly changing digital landscape. With the I&B Ministry planning to bring a separate legislation for these platforms, let us hope that the legislation addresses the concerns at hand and provide a comprehensive framework, enabling this sector for the new age needs for the largest populated country in the world with a young population.

The author was formerly Executive Director for India, Bangladesh, Sri Lanka and Bhutan, The World Bank; Secretary to Government of India, Ministry of Defence; & Chairman, Committee on National Competition Policy