International Tax Panorama

Twitter has lost its intermediary status in India by not complying with the new Information Technology (IT) Rules, which came into force from May 26. It means that Twitter and its top officials will now be liable for all the content on its platform, which is considered “inflammatory” or unlawful in nature. 

Why Twitter lost its intermediary status? 

Section 79 of the IT Act states that social media companies get intermediary status, which gives them certain immunity and exemptions from liabilities for any third-party content and data hosted by them.

The same rule also require social media platforms to establish a grievance redressal mechanism and appoint a grievance officer, who must register a grievance within 24 hours and redress it in 15 days.

Rule 7 of the Rules very clearly states that where an intermediary fails to observe these rules the provisions of sub section (1) of section 79 of the IT Act shall not be applicable to such intermediary and the intermediary shall be liable for punishment under any law including the IT Act as also the penal laws of India with respect to unlawful content published on that platform.

Twitter was legally required to comply with the new Intermediary Rules (to appoint grievance officer) by May 25, 2021, but it did not comply. Twitter had made certain appointments initially, but these were summarily rejected by the government as they were external legal consultants or people not directly employed on the rolls of the company’s US parent.

As twitter failed to appoint the grievance office, as required under the law, it lost its status as an intermediary u. Sec 79 of the IT Act.

On losing the protection under Section 79 of the IT Act, Twitter will now be liable for any “third party information, data, or communication link made available or hosted by him”. In essence, it could be held criminally responsible for content on the platform. 

It means that Twitter will now be treated as a publisher rather than an intermediary for alleged unlawful content – and be liable for punishment under any law, including the IT Act, as also the penal laws of the country.

What will be the future consequences? 

Facing criminal liability will be one of the serious outcomes on non-compliance with the new intermediary rules. It means that Twitter and its top officials will now be liable for all the content on its platform, which is considered “inflammatory” or unlawful in nature. 

Recently a case was filed in Uttar Pradesh against the social media giant over Tweets on an assault that the police say attempted to incite communal trouble. Here Twitter can be directly liable for penal actions over the tweet that caused communal trouble.

Is Google, Youtube, Facebook, WhatsApp and Instagram also in trouble? 

At the moment Twitter becomes the only American platform to have lost the protective shield – granted under Section 79 of the IT Act, even though others such as Google, YouTube, Facebook, WhatsApp and Instagram remain protected.

Other social media platforms like Instagram, WhatsApp, and Facebook continue to enjoy the immunity of a social media intermediary in India. And this immunity was granted when they appointed new compliance officers, as required by the law.

Now it seems Twitter needs to comply with the rules as soon as possible to avoid penal actions.