Social media companies want personal liability exception for compliance officers, says study

Social media companies have expressed strong objection to the provision to hold chief compliance officers personally liable for failing to satisfy norms under the IT Rules as it may result to increased censorship by the platforms, an industry study said on Monday.

The IT Rules of 2021 mandate social media platforms to appoint a Chief Compliance Officer (CCO) who shall be responsible for ensuring compliance with the IT Act and rules.

The CCO shall be liable in any proceedings relating to any relevant third-party information, data or communication link made available or hosted by the social media platform where s/he fails to ensure that such intermediary observes due diligence.

According to the joint study by The Dialogue and IAMAI, this provision may also impact India's image as a propitious business destination and deter foreign investors from investing in the country to avoid the additional challenge of recruiting and then ensuring the protection of their employees from potential criminal sanctions.

"Personal liability of the Chief Compliance Officer was strongly opposed by the majority of the intermediaries interviewed. Majority of the lawyers noted that despite the need for effective reporting lines between the intermediaries and the government, subjecting individual employees to criminal liability is both unnecessary and disproportional," the study said.

The Dialogue and IAMAI interviewed a total of 82 stakeholders, including social media firms and startups, as part of the study.

"Personal liability for employees may lead to increased censorship, where the threat to employee safety would compel the platforms to always err on the side of caution, thus potentially over censoring content," the study said.

The Ministry of Electronics and IT has issued a draft amendment to the IT Rules of 2021 where it has proposed to set up a panel that can override decisions of social media platforms. It has invited comments from stakeholders on the amendment by July 6.

"The study has been done to take feedback from the intermediaries. We will make a submission before the government based on feedback received from the intermediaries," The Dialogue founding director Kazim Rizvi said.