The Ministry of Electronics & IT (Meity), Cyber Law and Data Governance Group, has issued an advisory No.eNo.2(4)/2023-CyberLaws–3 (“Advisory”) regarding usage of AI models under IT (Guidelines For Intermediaries And Digital Media Ethics Code) Rules, 2021 (“IT Rules 2021”). Since the release, the Advisory has created some uproar in the Indian startup landscape wrt regulation of AI, particularly permissions required for launching AI models. I am explaining the main contents of the Advisory here, as read with IT Rules 2021 and its impact on startups.
Who does the Advisory apply to?
The advisory applies to “intermediaries and platforms”. Intermediaries have been defined as (reading Section 2(1)(w) of the IT Act, 2000 w/ IT Rules 2021):
- Social media sites – Facebook, Linkedin, Whatsapp; Online marketplaces – Zomato, Amazon; Search engines – Google; Telecom or internet service providers – Airtel, Jio; Gaming platforms etc.
- The exact definition under IT Act, 2000: any person who on behalf of another person receives, stores or transmits that record or provides any service with respect to that record and includes telecom service providers, network service providers, internet service providers, web-hosting service providers, search engines, online payment sites, online-auction sites, online-market places and cyber cafes
- Intermediaries include a vast array of entities who facilitate the flow of data on internet
- The IT Rules, 2021 further define social media intermediary and gaming intermediary as well. The definition is broad to capture all kinds of platforms but not specific to include every startup in the domain of AI.
What does the Advisory say?
The responsibility is on the intermediary/platform to ensure approvals are in place for use of AI models, and in addition the AI model does not:
- permit its users to host, display, upload, modify, publish, transmit, store, update or share any unlawful content as outlined in the Rule 3(1)(b) (11 kinds of information is regulated here, please refer the Rule for detailed list)
- The responsibility to ensure that the computer resources do not permit any bias or discrimination or threaten the integrity of the electoral process
- GOI approval is required for under-testing/unreliable AI models – though unreliable AI models has not been defined.
- Further, ‘consent popup’ mechanism may be used to explicitly inform the users that the results generated using AI may be false.
- Intermediaries are required to conduct DD of its users before onboarding them & ensure compliance of T&Cs, user agreements etc (Refer IT Rules 2021)
Are the startups affected?
- On a bare reading of the Advisory and the IT Rules, the startups: a. who fall under the definition of intermediary/platform; and b. who are users of intermediaries/platforms are affected.
- However, Union Minister Rajeev Chandrashekhar has clarified that the advisory is only targeted at significant platforms and not startups. Significant platforms have not been defined under IT Rules though, we have to wait for clarification from the Meity as to the quantifying criteria below which a startup remains free from the obligation of the Advisory.
Other related news wrt AI policy:
- OpenAI working with ex-Twitter India head to navigate AI policy landscape in India
- India’s efforts to localise AI technology
- PM’s Economic Council member – We need a SEBI like Regulator for AI
- UN launches AI Advisory Body with Indian tech advisors
- IT Rules 2021 – an overview
Disclaimer: The views expressed are personal opinion of the author and in no way constitute legal or financial advice.
