INTRODUCTION
With the show-biz industry being one of the highest grossing sectors in India in recent times, the introduction of Over-The-Top (hereinafter referred to as “OTT”) platforms has completely transformed the industry.
The Indian Media and Entertainment Industry has proved to be one of the highest grossing sectors, with a market size that is expected to grow to USD 100 billion by 2023. The OTT platforms and digital media counts for 12% of the above-mentioned figure within a few years of gaining popularity.
Previously, the OTT platforms were introduced as a replacement for the traditional CDs and video cassettes by providing an alternative where more than one entertainment movies and shows are available on a single platform. At present, with the gigantic increase in the use and subscription of OTT platforms, coupled with the unprecedented elevation in media consumption due to the nationwide lockdown in the backdrop of the COVID-19 pandemic, the online platforms pose a major threat to the age-old classic theatre-movie concept and broadcasting of dish-based television daily soaps.
Due to such unexpected rise of the OTT platforms, the Authorities have taken note of the unregulated nature of the industry, and the financial and social threats that it may pose in the near future. In view of the same, certain regulatory measures have been incorporated to rectify the situation. The entertainment industry has mixed views on the interference of the authorities in a booming sector, which has led to a rise in certain legal compliances and new challenges for the OTT platforms.
In this part of the article, we attempt to systematically enlist and analyze the legal requirements to be ensured by the platforms for the protection of its users in India.
REGULATORY SCENARIO
A. THE INFORMATION TECHNOLOGY (INTERMEDIARY GUIDELINES AND DIGITAL MEDIA ETHICS CODE) RULES, 2021
While there are no explicit laws to control the content available online , there are a few articles and parts from several statutes that regulate online content, such as Sections 67A, 67B, and 67C of the Information Technology Act, 2000. (hereinafter referred to as “IT Act”). These clauses stipulate that anybody who transmits or publishes any obscene or sexually explicit content, particularly those involving children, would face a punishment of imprisonment. Section 69A of the IT Act also grants the Central Government the authority to make instructions prohibiting the release of certain information to the public.
In addition, the Internet and Mobile Association of India (IAMAI) issued the “Universal Self-Regulation Code for Online Curated Content Providers” on 04.09.2020, to conduct the platforms in a particular way. It was mutually agreed upon and signed by several OTT companies . This particular Code contributes to the platform’s open disclosure architecture.
The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 (hereinafter referred to as the “IT Rules”) were notified by the Central Government on 25.02.2021. The IT Rules were notified in the exercise of the power conferred to the Central Government under Section 87 of the IT Act. As per Section 87(2)(zg) of the IT Act, Central Government can make guidelines that need to be observed by the intermediaries.
A. Scope
The IT Rules are enacted to regulate social media intermediaries and digital media.
Rule 2(i) of the IT Rules defines digital media as digitized content that can be transmitted over the internet or computer networks and includes content received, stored, transmitted, edited or, processed by any intermediary, publisher of news, or publisher of online curated content.
Online curated content includes any audio – visual content that is transmitted through any platform or by the publisher of the content. It includes documentaries, serials, television shows, movies, podcasts, etc. As the OTT websites are the platform on which the online content is processed and transmitted, thus they have to mandatorily comply with these rules.
As per the IT Rules, the following compliances have to be done by the OTT platforms;
Part III of the IT Rules consists of the Code of Ethics (hereinafter referred to as “the Code”) that applies to the publishers of online curated content and news and current affairs content.
B. General Principles
As per the Code, it is the responsibility of the OTT websites to see that no content that is prohibited by law, or explicitly denied by the Court of law is transmitted. The OTT platforms need to evaluate the content and after considering certain factors and their implications, should transmit the content. The parameters for evaluation of such content is whether- it affects the sovereignty and integrity of India, endanger the security of the state, detrimental to India’s relation with other countries or that is likely to cause violence and disturb the public order. The OTTs should also take into consideration the beliefs, religion, or practice of the users and whether it disrespects any particular belief or religion.
C. Content Classification
The OTT platforms have to classify the content based on its theme, type, tone, impact, and targeted age of the audience it is suitable for. The guidelines prescribed appropriate self-classification of the shows, instead of directing any censorship. It says that the streaming platforms will have to rate content in three categories, namely, U- Universal, U/A, and A- Adult.
i. The “U” category denotes that it is appropriate for all age groups.
ii. The “U/A” category has been further subdivided into U/A – General, which is acceptable for everybody but may contain scenes not suited for young children; U/A – 7+, which is suitable for 7 years and above; U/A – 13+, and U/A – 16+. Only those above the age of 18 can view an A-rated film or television show. Nudity in shows and movies that does not have a sexual context can be classified U/A 16+.
It should further classify on the basis of themes of violence, nudity, sex, language, drug or substance abuse and horror and the classification details are enumerated In Schedule Part II.
D. Display of Classification
To help users make informed choice, all the OTT platforms shall rate their content and add a content descriptor to inform the audience about the theme. The content which is rated ‘A’ shall have an age verification system and the user won’t be able to access any ‘A’ rated content without submitting the verification. There are certain rules that focus on increasing inclusivity like the content should be accessible to a person with disability. If the rules are not complied by the OTT platforms or any publisher, then they shall be liable as provided under such law which has been contravened (Rule 9 of IT Rules).
E. Grievance Redressal Mechanism – Three Tier Structure
The aim of incorporating a three-tier structure is to ensure that the provisions and parameters laid down in the Code are complied with and for addressing any grievances made to the publisher by general public.
1. Level I – Self Regulation by the Publisher
The OTT platforms shall form a grievance redressal mechanism which shall be headed by the Grievance Officer based in India as per Rule 11 of the IT Rules. The contact details of the officer and the procedure need to be published on its website. Grievance can be filed by anybody who thinks the Code has been not complied with while publishing content. The decision has to be taken within 15 days from the day it was received. If it is not communicated as per the timeline, then it will be escalated to the self regulating body under Rule 12 of IT Rules.
2. The Level II –Self Regulating Body of Publishers
A self regulating body shall be established consisting of publishers and associates as their members. It will be headed by a retired judge of the Supreme Court, a High Court, or an independent eminent person who is expert in the field media, broadcasting, human rights etc fields.
The content published shall be passed through the self regulating body so that it can oversee and evaluate its adherence with Code . The complaint appealed has to be resolved by the self regulating to which the publisher is member of and convey the decision in the form of guidance to the said publisher. The self regulating body needs to adhere to the Code or any other charter that is published by the Ministry of Information and Broadcasting (MIB) under Rule 13 of IT Rules.
There are currently two self regulating bodies established in India; the first one is under the Indian Broadcasting and Digital Foundation (IBDF) and is called as Digital Media Content Regulatory Council (DMCRC). The second one is established by The Internet and Mobile Association of India (IAMAI) which is called Digital Publishers Content Grievances Council (DPCGC). The objective of DPCGC is to ensure that the OTT platforms are in adherence to the new guidelines, and also help users of such platform to make informed choices. Both the bodies have complied with all the conditions under Rule 12 of the IT Rules.
3. The Level III : Oversight Mechanism
The Ministry of Information and Broadcasting (hereinafter referred to as “MIB”) shall develop an oversight mechanism to co-ordinate and facilitate adherence to Code . It shall also issue guidance and orders to the OTT platforms for adhering to the Code.
F. Inter Departmental Committee
One of the most important functions of the MIB is to establish an inter – departmental committee. The main objective of the inter-departmental committee is to listen to all the grievances arising either out of the decision or lack of the decision by the self-regulating body or by reference of any violation made by the ministry.
The committee may accept the complaint or grievance and then make following recommendations to the MIB under Rule 14 of the IT Rules:
- Warning, censoring, admonishing or reprimanding the entity
- Apology
- Add a warning card or disclaimer to the said content
- Re-classify the ratings
- Modify the synopsis, content descriptor, age classification or parental control access
- Delete or modify content to prevent incitement and maintain public order
The MIB after considering these recommendations of the committee may issue appropriate directions to the OTT platform. Thus, broad powers are rendered to the committee and the MIB for regulation of the OTT platforms.
G. Authorized Officer
As per Rule 13 of the IT Rules, the MIB shall also appoint an Authorized Officer who shall be the chairperson of the inter-departmental committee. It can issue directions to delete or modify or block the relevant content on the basis of the recommendations and after the approval from the Secretary of the MIB as per Rule 15 of the IT Rules. As per rule 16 of the IT Rules the Authorized Officer shall, in case of an emergency, pass directions to block any information or content on the basis of approval of the Secretary, MIB and at the earliest would place the order for consideration before the committee
H. Furnishing Information and Compliance report
The OTT platforms have to submit all the details of its entity along with the relevant documents to the MIB. This shall help the ministry for enabling communication and coordination with the entity. The content platform shall also publish a monthly compliance report that contains all the grievances received and what actions were taken by the entity to resolve it.
I. Disclosure of Information
The OTT platforms and the self regulating body should make disclosure of all the complaints received by them, actions taken to resolve it or dispose it, the communication made to the complainant and any specific order passed by the MIB. This should be updated every month and made available to the public.
They shall also maintain and preserve records of all the content transmitted by the platform in 60 days and should render it to the MIB or the self regulating body as and when requested.
The intermediaries and OTT platforms were given three months time to comply with the Rules and amend their policies. On 27.05.2021 the MIB provided a further extension of 15 days to all the OTT platforms and news agencies to comply with the Code.
B. AGREEMENTS UNDERTAKEN
There are certain general and specific agreements that have to be signed while dealing with different OTT platforms, in order to grant them certain rights and duties for fulfilment of the agreement. Some of the general agreements signed by the parties are as follows –
1. Digital Exploitation Agreement: This agreement is executed to provide license to the digital OTT platforms for exploiting the producer’s digital content in exchange for a certain sum of money.
2. Film Distribution Agreement: This agreement provides distribution rights to the digital OTT platforms, thereby enabling access to the digital content to viewers of different countries, depending upon the agreement.
3. Licensing Agreement: This agreement grants permission to another party to use the property holder’s copyright. The agreement, which is set between the licensor (the property owner) and the licensee (the permitted party), contains details on the type of licensing agreement, the terms of usage, and how the licensor is to be compensated.
4. Exclusive Licensing Agreement (Optional): This agreement is similar to the licensing agreement except for the exclusivity clause which grants the licensee exclusive rights to use the copyrights and other related rights.
5. Representation and Warranties Clause: The content creator enters into an agreement with the OTT platform where he represents that they have the sole full and unencumbered right to grant to the broadcaster and has obtained all necessary clearances and releases. The information and documentation will be complete and current. The delivery or promotional materials shall not be defamatory, libelous, obscene, or illegal as per the applicable laws of the Territory. It should not violate any Intellectual Property Rights of any third party. However, the ownership rights, copyright and interest on the title will be retained by the content provider.
With reference to specific agreements, the OTT platforms may differ from each other based on their type of content published. Amazon Prime and Netflix, two of the biggest OTT platforms in India enter into multiple agreements with various production houses for content production, which is released on the OTT platform under their name.
Netflix only accepts submissions through certain “agents or publishing houses” who already have a pre-existing relationship with Netflix. Submission by any other individual/production house shall be considered to be an unsolicited submission, which is not accepted by Netflix. The list of “agents or publishing houses” through which Netflix accepts submissions are Licensed Literary Agent, Producer, Attorney, Manager and Entertainment Executive.
While dealing with Amazon Prime, the content creator has to acknowledge Amazon’s Code of Business Conduct and Ethics on bribery or any anti-corruption laws. The delivery of content to Amazon has to be done by the content provider as per the technical specifications provided by Amazon. Closed captions of all the titles submitted are necessary. The content policy guidelines are to be complied with when submitting the title to Amazon. The guidelines state that the content should not be:
- Offensive
- Illegal and Infringing Third Party Rights – Intellectual Property Rights, privacy, or other rights
- Content is in public domain
- Has poor customer experience
Country or territorial restriction – Certain additional considerations need to be adhered to as per the laws of the country.
C. INTELLECTUAL PROPERTY RIGHTS
The primary protection offered to the OTT platforms and the producers of a content are under the Intellectual Property Laws of the country. The protection may be in the form of a licensing and distributorship agreements or entering under co-production deals.
1. Under the Licensing deals, the production house enters into an licensing agreement with an online platform or a broadcaster for displaying their content over their platform for a fee that may vary upon the type of agreement decided upon. The fee may be fixed, percentage based on revenue generated or minimum guarantee with revenue share.
2. On the other hand, under a Co-Production deal, the broadcasters and production houses work hand in hand for the production of content. The former has the ultimate control over the type of content that shall be produced and the time period for production and release of content on the platform. Such deals have been quite popular with the OTT platforms, one such example being Red Chillies production house entering into a co-production deal with Netflix for creating multiple projects together, which have been successful and generated huge revenue.
3. Section 14 of Copyright Act, 1957 lays down the various rights available to the copyright owner including the right to produce copies, store and reproduce the work. According to Section 51 of the Copyright Act, 1957, a direct infringement by the way of storage or unauthorised reproduction shall constitute as a copyright infringement, inviting civil and criminal liability therein.
4. Moreover, the IT Act read with the Intermediary Rules of 2011, constitutes the action of unauthorised usage and distribution of content protected under the copyright laws without prior permission as an offence, wherein the liability shall equally be extended to the intermediary through which the infringement has occurred. The draft Information Technology [Intermediaries Guidelines (Amendment) Rules] 2018 mandates the intermediary platform with requisite technical solutions to protect the infringement of copyright of the owner.
5. The OTT Platforms disclose the rights that shall be granted upon entering into an agreement, which may vary from one platform to another. For instance, there are certain rights which the party shall grant Amazon and they are as follows –
- Amazon will have non-exclusive license in the Territory to use, reproduce, reformat for online delivery, encode, encrypt market, promote, transmit, distribute and display on the service the audio-visual programs.
- Amazon will have right to offer its customers to purchase the title.
- Amazon will have right to advertise.
- It can make some modification to the content (title) to adhere to the law of the Territory the modification will not impair the creative integrity, quality or meaning of the title.
Both the Producer/Content Owner and Broadcaster/OTT platform have certain rights and duties under the law, which need to be followed for the maximum economic benefit and ensure no harm has provided to either party during the enforcement of the contract.
AMLEGALS REMARKS
Due to the demand for online curated content and easy availability of the internet, the number of OTT platforms has increased in India. The controversy with respect to its regulations and challenges faced by the OTT platforms has always been in debate. The Rules are beneficial in some aspects but have created various challenges for the OTT platforms, news publishers, and online curators. It has led to an increase in financial burden and regulatory interference by the Central Government.
The IT Rules have sparked debates pertaining to creative freedom, state surveillance, unnecessary control over OTT platforms and so on. On a concluding note, it can be observed that the IT Rules has its pros and cons. Presently, a wide range of discussions and altercations are going on pertaining to the IT Rules and how it has affected the social media and OTT platforms. However, moving forward, it shall be interesting to witness how the application and implementation of these Rules unfold in the Media and Entertainment Industry. In the next part we will discuss the varied challenges faced by the OTT platforms in India.
For any queries or feedback, please feel free to get in touch with tanmay.banthia@amlegals.com or info@amlegals.com
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