Media platforms

Liability of social media platforms for misleading advertisements


Marketing on social media platforms has become one of the fastest and most effective ways to promote any activity, whether business, social or governance related. With an increase in online advertisements on all topics, concerns about transparency, accountability, and unethical marketing practices around these online advertisements have also increased remarkably. Although illegal in their most obvious form, false or misleading advertisements on social media platforms can occur in the most subtle ways that can be difficult to establish as outright deception. Therefore, consumer protection against misleading advertisements and strategies to counter them are important issues that need to be addressed.

Misleading advertisements and social media platforms

We have previously written short articles on liability of business enterprises arising from misleading advertisements on social media platforms which elaborate on the concepts of social media platforms and misleading advertisements under Indian laws. Please click here and here to read our previous coverage.

Laws Governing the Activities of Social Media Platforms

There is no overarching, omnibus law regulating the activities of social media platforms in India. However, a few laws and regulations detailing these laws deal with various issues related to online advertisements by social media platforms in India. Apart from legal regulations, social media platforms can also set up self-regulations to monitor activities on their platform.

1. Information Technology Act, 2000

Platforms hosted by social media platforms are governed by the Information Technology Act 2000 (IT law). Article 79 of the IT Law prescribes the concept of “safe harbour” which protects these social media platforms from liability for any illegal acts of third parties and provides immunity from liability arising from such acts. Notably, the Computer Law extends the protection of Article 79 only to social media platforms that merely act as a facilitator and are not involved in the creation or modification of the content hosted on its platform. Additionally, to seek protection under Section 79, social media platforms must also comply with the provisions of the Information Technology Rules (Guidelines for Intermediaries and Digital Media Code of Ethics) , 2021 (Intermediate rules) (summary below). In case of non-compliance with the intermediate rules, social media platforms can lose their immunity under Section 79 and be held liable under the Computers Act as well as the Indian Penal Code 1860 for posting false advertisements or misleading.

Accordingly, while hosting advertisements on its platform, social media platforms must ensure that they have not contributed in any way to the production of such advertisements. In addition, commercial enterprises responsible for such advertisements shall be bound by explicit obligations to ensure that advertisements comply with all applicable laws, including any specific criteria as prescribed by the Intermediate Rules.

2. Intermediate rules

The Intermediate Rules impose definitive obligations on social media platforms, such as the obligation to inform users of the rules, regulations, privacy policy, user agreements governing the use of the platforms, to exercise due diligence in performance of their duties and to require the appointment of a grievance remedy. responsible for handling complaints, etc. Failure to comply with the Intermediate Rules will result in social media platforms ceasing to benefit from safe harbor protection under the Information Technology Act and being exposed to significant liability, as set out in the aforementioned paragraph.

In addition, the Ministry of Electronics and Information Technology has recently proposed to change the Intermediate Rules in its notification of June 06, 2022 (Change notice). The change notification proposes to impose onerous due diligence requirements on social media platforms, including its responsibility to ensure that platform users comply with intermediary rules. The amendment notice also proposes to establish a government panel to adjudicate appeals against orders issued by social media platform grievance officers, while prescribing strict time limits for the recognition of such complaints from users. The change notification also proposes strict deadlines for handling complaints. Social media platforms will be required to act and remedy user complaints for removal of information within 72 hours of receiving complaints, while other complaints can be resolved within the pre-existing 15-day period.

Although the above amendments are currently in draft form and have been posted for public comment, it is recommended that the detail of the requirements for meeting compliance with the Intermediate Rules not be left vague in order to: (a) prevent unintentional use of the Intermediate Settlements to harm the messenger, i.e. the real social media platform; and (b) establish regulatory tolerance for bona fide social media platforms that merely act as a “postman”.

3. Data protection

Social media platforms hosting advertisements on their platforms are also required to comply with the data protection standards prescribed by the Computing Act and the Information Technology (Reasonable Security Practices and Procedures) Rules 2011 and sensitive personal data or information), with respect to any personal information or sensitive personal data or information collected by these intermediaries for the provision of more targeted advertising services.

4. Consumer Protection Act 2019 and Guidelines for the Prevention of Misleading Advertisements and Approvals for Misleading Advertisements, 2022

The Consumer Protection Act 2019 (Consumer Protection Act) and the Guidelines for the Prevention of Misleading Advertisements and Approvals for Misleading Advertisements, 2022, published by the Central Consumer Protection Authority (CCPA Guidelines) prescribe certain essential requirements regarding the regulation of advertisements, including online advertisements in India.

Although the CCPA guidelines are applicable to all forms of advertising, regardless of form and medium, the guidelines do not include any specific requirements for social media platforms that merely host such advertisements. on their platform. However, in the interests of good governance, social media platforms may consider having mechanisms in place to ensure that the advertisements they host comply with CCPA guidelines.

Our thoughts

India has recently witnessed the tremendous impact as well as future potential of advertisements on social media platforms. Even though the current Indian legal framework for such advertisements may be a model of co-regulation, i.e. a mixture of statutory and self-regulatory frameworks, significant compliance requirements have been prescribed in the statutory framework, and the Failure to comply with these may result in the imposition of penalties on social media platforms hosting such advertisements.

This situation is further exacerbated by the inherently dynamic and ever-changing nature of these social media platforms and the regulations put in place to deal with any content hosted by these platforms. It is therefore recommended that laws governing social media advertising create an enabling environment by ensuring that social media platforms are held accountable for failing to act reasonably to prevent misleading advertising. In the absence of such failure, regulatory intervention should only be for the cause of the growth of social media platforms, to enable greater reach of these platforms in the deepest corners of India. for a better knowledge of products/services, relevant for each segment of our population. and inclusive governance.

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