Aliza Tarique

The estimated economic value set to be generated by the Online Gaming ecosystem in India is set to cross INR 100 billion between 2020 and 2025. In light of its increasing importance, the government released draft amendments to The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, to regulate the online gaming sector. The provisions lay down specific guidelines to establish and ‘regulate’ self-regulatory organisations to regulate gaming. However, the amendments are plagued with a myriad of inherent defects that render the prescribed mechanisms obsolete. In light of the aforementioned regulation and certain other developments, this essay highlights these flaws. Further, these issues have been practically analysed through an example of a digital platform which theoretically qualifies as a gaming intermediary. Lastly, the article emphasises policy changes that deal with the problems discussed in the preceding segments.

INTRODUCTION

The Government of India is currently on the road to formulating the Information Technology (‘IT’) laws of the country. Previously, the only set of regulations designed to govern the broad spectrum of IT disputes was the Information Technology Act 2000.[1] Later, the Ministry of Electronics and Information Technology (‘MeitY’) introduced The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 (‘IT Rules, 2021’). Upon their introduction by the governments, these policies drew severe criticism from a plethora of academicians and scholars, apart from the Supreme Court (‘SC’) of India itself.[2]

Subsequently, the Union government made a series of amendments to the IT Rules, 2021, through which the Centre had envisaged the creation of an appellate body, i.e., the Grievance Appellate Committee.[3] Lastly, the newest regulations, which will comprise the dominant theme of the paper, revolve around Draft amendments to the IT (Intermediary Guidelines & Digital Media Ethics Code) Rules, 2021, in relation to online gaming (‘2023 Amendments’). They aim to add rules for online gaming regulation under Part II of the Rules and broaden the scope and applicability of the IT Rules, 2021.

The IT regime in its present form seeks to regulate traditional digital platforms, i.e., Social Media Intermediaries and OTT platforms and other platforms which definitionally qualify as digital intermediaries. A digital platform uses an Internet resource to connect multiple market actors and create constructive feedback loops between users or between users in a way that increases platform users’ value.[4] The amendment within the 2023 Amendments describes an online gaming intermediary that offers one or more online games available on the internet through an internet resource.[5] Therefore, the online gaming intermediaries qualifying as digital platforms have recently been subjected to regulations through the 2023 amendment. The legislation includes self-regulatory provisions through the Self-Regulatory Organisation (‘SRO’).[6] Even though there are industry standards to which the game developers are expected to pre-emptively adhere, this article will analyse the regulatory mechanisms of the SROs and their subsequent impact. In pursuance of the same, Part II of this article will discuss the issues with the definitions and the procedural hurdles which will be created due to the ambiguity of the 2023 Amendments. In Part III, the practical problems with the policy will be examined through the example of Netflix’s Gaming platforms. Part IV contains a brief discussion of the changes required within the policy.

A FEEBLE ATTEMPT AT ‘SELF’-REGULATION: THE POLICY DEBATE

A.    SRO – AN INTERPRETATIVE FORUM?
The 2023 Amendments have laid down a specific set of guidelines for establishing SROs to regulate online gaming intermediaries. The primary intent behind establishing SROs should be setting up an independent mechanism to control the functioning of a particular industry.[7] However, three pertinent questions which pose a threat to its independence will be addressed in this segment.

As per the current guidelines, SROs will be the primary institutions for deciding the registration of online games (Rule 4A(a)), verification of the ‘customers,’ and determination of a framework (Rule 4A(b)(iii)), among other functions. The SROs will be expected to assess the games based on their impact on the sovereignty and integrity of India, defence of India, security of the State, and friendly relations with foreign States or public order (Rule 4A(b)). Considering how differently the SC has interpreted the meaning of the words described above,[8] the SROs should not be given exclusive discretion to interpret them. The same issue lies with words such as ‘addictive’ or can cause ‘harm to children,’(Rule 4B(6)(a)) wherein an SRO, without the help of a legal expert, will be interpreting such words to determine the registration of a game.

Another ancillary issue which arises from the interpretation above is that there is no prescribed number or classification between the SROs.[9] It creates an air of uncertainty regarding their functioning and expertise. Therefore, a gaming intermediary has the option of registering under any SRO of their choice. It enables online gaming intermediaries to search for SROs whose interpretation caters to their interests or to develop their own SROs to obtain the lowest bid.

B. A questionable Composition
Secondly, there is a broad consensus amongst experts regarding the differences that exist between various online games.[10] A small peek at the games section of the Google play store can demonstrate that games are categorised as Strategy, Action, Puzzle, Simulation, etc.[11] In addition to the broad categories created, there is scope for excessive variation within categories too. For example, a single category may include anything from a new edition of the tower defence game Plants vs Zombies to an adventure game like Agatha Christie: Peril at the End House. The commonality between both games is that they involve a player’s strategic skills; however, how they are played is immensely different, along with the strategies implemented, their target audience and their outcome. Therefore, an SRO will be expected to comprehend the mechanics of each online game from each category offered and test them against the existing vague standards established.

Nonetheless, the 2023 Amendments suggest that the Board of the SRO (‘Board’) shall have ‘an individual who represents online game players.’ (Rule 4B(3)(d)(ii)). This lists down a distinctly unreasonable expectation from such an individual to represent the interests of both a third-person shooter game and a puzzle game as a member of the same board. Additionally, the lack of a legal expert on the Board poses serious questions about the credibility of such a Board.

C. Excessive Governmental Regulation
Another prevailing concern with the composition of the Board is the presence of a nominee of the central government who is experienced in ‘the field of public policy, public administration, law enforcement or public finance.’(Rule 4B(3)(d)(iv)) This goes against the fundamental tenet of self-regulation, wherein SROs independently determine the necessary framework for any industry. The advantages of industry self-regulation include the reduction of the government’s burden through the delegation of authority.[12] However, including a government nominee in the SRO offsets a portion of the advantage.[13]

Additionally, through Rule 4B(9) of the 2023 Amendments, an SRO can identify the factors to consider when deciding upon the registration of an online game. However, MeitY has retained the authority to interfere directly and designate any game as an online game for regulatory purposes and utilise its discretion to suspend or revoke the registration of an SRO (Rule 4B(10)).

Further, if the ministry believes that the SRO still needs to comply with the requirements of these Rules, it may be informed of the same in writing and order to take action towards necessary corrections (Rule 4B(2)). Although the SROs are given the authority to register online gaming intermediaries, the broad powers granted to the ministry also give the government a great deal of discretion in choosing which SRO will exercise these powers and, more importantly, how it will exercise them. Another rule potentially allows them to decline the registration of any game which falls within the broad spectrum of interpretations of words like ‘national interest’ (Rule 6A).

Therefore, the above criticisms  of the 2023 Amendments demonstrate that the policy in its current form needs to be revised in its structure. It renders its regulatory mechanism redundant and its implementation futile. In the next segment, these flaws will be further examined through the example of a platform which qualifies as two different categories of intermediaries.

THE NETFLIX OF GAMING ­- A ‘CLASSIFICATIONS’ DISPUTE

The undefined and ambiguous terms used within the 2023 Amendments have already led us to tremendous amounts of uncertainty. However, defined words have equally contributed to the confusion. The overbroad definitions can include almost any platform qualifying as a gaming intermediary with online games. This segment will discuss how a popular Over the Top (‘OTT’) platform, Netflix, which launched its first game in November 2021,[14] not only qualifies as a gaming intermediary but also adds to the conundrum created by these draft regulations.

A simplistic reading of the provisions within the 2023 Amendment reveals that any intermediary which offers one or more games will qualify as a gaming intermediary, and Netflix squarely falls into that (Rule 2 (qb)). However, the definition of an online game poses three requirements. Firstly, a game that is offered on the Internet (Rule 2 (qa)). Secondly, it is accessible by a user through a computer resource (Rule 2 (qa)). Thirdly, if he makes a ‘deposit’ with the expectation of ‘earning winnings’ (Rule 2 (qa)).  The term winnings include any prize, in cash or in kind, which can be won based on the user’s performance (Rule 2 (qa) Explanation (iii)).

The first and the second requirements can be easily fulfilled through the Netflix example. However, the issue arises with the third requirement. The games on the platform are available only after the player deposits the subscription fees on the app.[15] Additionally, the definition suggests that the person engaging with the online game must make a deposit with ‘an expectation of earning winnings’ (Rule 2 (qa)). The games within Netflix have multiple levels that must be cleared for a player to receive game coins as ‘prizes.’ These games are later used to make in-app purchases (Rule 2 (qa) Explanation (iii)).

However, in this example, how is the SRO expected to determine if the subscription taken will qualify as a ‘deposit’ made on Netflix with the expectation of earning a winning? Additionally, the grounds for ‘expectation of winnings’ extend beyond games such as gambling and rummy, where the returns for the deposits can also be won in terms of real money. The definition includes prizes and winnings in kind, wherein a character on a game similar to Subway Surfers on Netflix could qualify as a prize for one player and not for another. Further, when a platform like Netflix qualifies as an OTT platform and a gaming intermediary, how will it be implemented in the current IT regime where laws related to all such platforms are conflated into a single document? Currently, most of the games on Netflix Games are based on the stories of certain movies and shows on their platform.[16] However, some of them may have violent and sexually explicit content which may be banned from viewing. How will the same impact a game designed on the premise of that movie and does not violate any other specified criteria laid down for not permitting the registration of a game? This example is simply one of the troubles emanating from a set of overbroad regulations that can include every game within its ambit because of its definitional ambiguity.

A NEED FOR CHANGE IN APPROACH

A. The Current Position
The brief perusal of the 2023 Amendments is demonstrative of the State’s understanding of the mobile gaming industry. Interestingly, the online gaming market is projected to reach $5 billion in 2025. Yet, the inherent fallacies within the draft demonstrate how the ruling regime underestimates the importance of this industry for the Indian economy.

The 2023 Amendments suggest that the SROs are responsible for assessing the risk of addiction to each game and ensuring that repeated warning messages are shown beyond a reasonable duration for each gaming session (Rule 4B(6)(c)). Professional gamers who spend many hours honing their skills are categorically ignored under these provisions. Alternatively, the regulations mainly cater to the professional gaming community wherein the ‘online games’ can only be accessed by people with the necessary documentation and financial know-how (Rule 4A(b)(iii)).[17] Therefore, making them potentially inaccessible to those lacking the same.

Further, one of the criteria for declining the registration is merely the idea that it can potentially ‘harm children’ (Rule 6A). The question of what qualifies as ‘harm’ remains unanswered. Additionally, a game maker is expected to self-declare if their game is addicting (Rule 4A(b)(iii)). These parameters demonstrate the government’s nonchalant approach to drafting definitive industry regulations.

B. Proposed Changes

First, there should be precise classifications between different SROs based on different game categories. SROs cannot be expected to understand the dynamics of each type of game and assess them based on ambiguous guidelines. It is a fact that different online games have a very diverse set of demands and requirements.[18] Therefore, a single SRO may not be able to cater to the interests of all kinds of game developers.

Second, the SROs should include more than one person representing the online gaming community. A single person will not be able to advance the interests of players in every type of game. Therefore, there is a requirement to alter the composition of the Board to incorporate multiple such persons representing the players of different games. The new Board would accommodate the needs of the majority of categories and ensure that each category’s experts dealt with the games in which they are skilled.

Additionally, the SROs should include a legal expert while formulating their independent frameworks. The legal expert will assist the SRO in evaluating and interpreting the words within the regulations. An impact-based evaluation of the framework will allow game developers to adhere to a checklist for their games and ensure that the ambiguity does not hinder innovation within the sector.

Finally, it is critical to avert possible SRO disputes in developing markets. A remedy for this lies with transparency initiatives. SROs must be mandated to regularly publish a report listing the online games they considered for registration, the ones they refused, and their explanations. It would offer a transparent paper trail and let other SROs know whether a game they considered had already been turned down. Such a shift will reduce the allure of forum shopping and promote creation of more uniform standards among various SROs.

CONCLUSION

With the increasing popularity of e-sports in sports events like the 2018 Jakarta Asian Games suggests that the gaming industry will face an exponential increase in its players in the coming years. Therefore, MeitY’s attempt to regulate the sector is a welcomed move. However, as discussed in Parts II and III, the proposed legislation suffers from certain inherent defects which have the potential to not only hinder innovation in the gaming industry but also deter newer game players from joining it. As the legal complexities within the IT sector increase with multinational companies engaging with different sectors, the onus remains on the State to ensure that development is not hindered due to ambiguous and poorly drafted legislation. Therefore, to ensure confidence in the market and greater certainty, there is an urgency to clarify the applicable legal standards.

Aliza is a current undergraduate student pursuing a B.A., LL.B. (Hons.) at the West Bengal National University of Juridical Sciences (WBNUJS), Kolkata.

[1] The Information Technology Act, 2000.

[2] Shreya Singhal v. Union of India, AIR 2015 SC 1523, ¶20 (per R.F. Nariman J.). See also, Vinayaka Raina, & Meghna Biswas, Critical Analysis of Ott Platform with Reference to Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, 1 Smart Green Connected Societies 76 (2021).

[3] The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Amendment Rules, 2022.

[4] Michael A. Cusumano, Annabelle Gawer & David B. Yoffie, Can Self-Regulation Save Digital Platforms? 30 Industrial and Corporate Change 5 (2021).

[5] Ministry of Electronics and Information Technology, Draft Notification to amendment to IT Rules 2021 for Online Gaming (for Public Consultation) (Notified on February, 2023), Rule 2(qa).

[6] Mondaq, Government Releases Draft Rules for Regulation of Online Gaming, January 3, 2023 available at https://www.mondaq.com/india/gaming/1266994/government-releases-draft-rules-for-regulation-of-online-gaming (Last visited on March 1, 2023).

[7] L. Sitdikova, M. Volkova, S. Kuzahmetova, O. Efimova & O. Gridneva, Legal nature and legal personality of the self-regulatory organizations (SRO), 6 Mediterranean Journal of Social Sciences 91 (2015).

[8] Manan Dwivedi, The Paradigm of Internal Security in India: The Fulcrum of Evil Instigations or The Regular Narrative of The Rule of Law, 74 The Indian Journal of Political Science 6 (2013). See also, Apurva Vishwanath, Public Order: A Constitutional Provision for curbing freedoms available at https://indianexpress.com/article/explained/what-is-public-order-constitutional-provision-for-curbing-freedoms-7775718/ (Last visited on March 3, 2023).

[9] Live Wire, To Better Govern the 1%, Centre’s Regulations Complicate Gaming for the 99% available at https://thewire.in/sport/online-gaming-regulations-problems (Last visited on March 3, 2023).

[10] Birgit U. Stetina, Oswald D. Kothgassner, Mario Lehenbauer & Ilse Kryspin-Exner, Beyond the fascination of online-games: Probing addictive behaviour and depression in the world of online-gaming, Computers in Human Behaviour, 27 Computers in Human Behaviour 23 (2011).

[11] Google Play Services, State of Play – 2017 Play Report available at https://services.google.com/fh/files/misc/state_of_play_report.pdf (Last visited on March 3, 2023).

[12] Organisation for Economic Co-operation and Development, 2014 Report on the Implementation of the OECD Strategy on Development, 8, (2014), available at https://www.oecd.org/mcm/C-MIN(2014)14-ENG.pdf (Last visited on February 27, 2023).

[13] Id., 21.

[14] Netflix, Let the Games Begin: A New Way to Experience Entertainment on Mobile, November 02, 2021 available at https://about.netflix.com/en/news/let-the-games-begin-a-new-way-to-experience-entertainment-on-mobile (Last visited on February 28, 2023).

[15] Netflix, What is Netflix? November 02, 2021 available at https://help.netflix.com/en/node/412#:~:text=Netflix%20is%20a%20subscription%2Dbased,watch%20without%20an%20internet%20connection. (Last visited on February 28, 2023).

[16] Netflix, Let the Games Begin: A New Way to Experience Entertainment on Mobile, November 02, 2021 available at https://about.netflix.com/en/news/let-the-games-begin-a-new-way-to-experience-entertainment-on-mobile (Last visited on February 28, 2023).

[17] Live Wire, To Better Govern the 1%, Centre’s Regulations Complicate Gaming for the 99% available at https://thewire.in/sport/online-gaming-regulations-problems (Last visited on March 3, 2023).

[18] Google Play Services, State of Play – 2017 Play Report, available at https://services.google.com/fh/files/misc/state_of_play_report.pdf (Last visited on March 3, 2023).