Social media stalemate | #socialmedia


Good morning,

The government appears to be in an impasse with social media companies. Its new rules for these platforms were set to come into effect from midnight but none of the biggies have complied so far. Will the government grant them an extension?

Also in this letter:

  • Tipping coming to Twitter
  • Koo raises $30 million
  • Crypto exchanges under pressure

‘No decision on extension yet’

The government has not yet decided on whether to grant large social media platforms a four-week extension to comply with its new Information Technology rules, which were set to come into effect from today, several sources told us last night.

“No decision has been taken by the government on this yet. Companies have already represented (to us) for an extension,” one of the sources said.

A second official pointed out that the revised rules have already been notified and “companies will have to abide by them, whether they like them or not”.

Even as they seek an extension the companies have not said when they will be fully compliant with the new rules.

What they said: Facebook, which also owns WhatsApp and Instagram, said that it “aims to comply” with the new rules even as it “continues to discuss a few of the issues which need more engagement with the government”.

  • Google said it respects “India’s legislative process” and that it has a long history of “responding to government requests to remove content” when the content violates local laws or its own policies.

High stakes: We had reported on Tuesday that social media platforms such as Facebook, WhatsApp, Google and Twitter run the risk of losing their status as “intermediaries” and thus become liable for criminal action for the content they host if they don’t comply with the revised rules.

Covid slowdown: Industry executives said that while the companies have begun implementing some of the rules, the pandemic has delayed progress.

  • For instance, many companies publish transparency reports every three or six months but the new rules require them to do so every month. “This will require changes to our procedures, which are underway,” said one of the people cited above.

The new rules: In February, the government notified new rules for social media companies under the Information Technology Act and gave the firms three months to comply.

The rules define “significant social media intermediary” as one that has at least five million registered users. Under the rules, such platforms must, among other things:

  • Appoint a resident grievance officer, chief compliance officer and nodal contact person, and publish the details of these executives — including a physical address — on their websites.
  • Be able to trace the “originator” of any message the government deems problematic.
  • Actively monitor and remove “harmful content” using automated tools.
  • Publish a monthly report containing details of complaints received, action taken, and the number of links/posts removed.

Criticism over Delhi police ‘raid’: Meanwhile, the government has received widespread criticism for the actions of the Delhi Police’s Special Cell, which visited the offices of Twitter after it tagged tweets by BJP leaders that included a debunked “Congress toolkit” as ‘manipulated media’.

  • “This wave of digital repression seeks to silence critics and frustrate public scrutiny of the many over-broad, opaque, rights-violating directives that are being made of online platforms in India,” said Raman Jit Singh Chima, Asia Pacific policy director at Access Now.

Also Read: Delhi Police visit Twitter office to serve notice over ‘toolkit’


Twitter’s Tip Jar feature coming to India soon

TWITTER

Twitter will soon allow Indian users to make payments to non-governmental organisations, freelancers, influencers, content creators, journalists, new media professionals, or volunteers and activists trying to mobilise funds through its app.

The Tip Jar feature — built in partnership with payments processor Razorpay — is currently being tested in India and is expected to go live soon, they said. The feature was launched in the United States earlier this month.

Why it matters: This will have wide-ranging implications for India’s creator ecosystem, and could elevate Twitter’s status as a monetising platform for social and creative influencers.


TWEET OF THE DAY


Follow @ETtech for all the breaking news, insights and smart analysis on the business of technology and startups from the newsroom of The Economic Times.


Koo raises $30 million, valuation jumps five-fold

KOO

Indian microblogging platform Koo, which uses a yellow bird as its logo, has raised $30 million from new investors.Tiger Global is leading the new financing round, while there are two new investors—IIFL’s venture capital fund and South Korea’s Mirae Asset Management, Koo cofounder Aprameya Radhakrishna told us.

Indian alternative to Twitter? While several union ministers and government departments flocked to the app earlier this year, it still lags far behind its US rival.

Twitter vs Koo

Also Read: Koo and the quest for an Atmanirbhar social network

In other funding news…

■ Logistics SaaS (software-as-a-service) startup FarEye has secured $100 million in Series E funding led by global venture capital fund TCV and Dragoneer Investment Group. Existing investors Eight Roads Ventures, Fundamentum and Honeywell also participated.

■ Data collaboration workspace startup Atlan has picked up $16 million in Series A funding in a round led by venture capital firm Insight Partners. Existing investors Sequoia Capital India’s Surge and Waterbridge Ventures also participated.

Also Read: Stride Ventures launches second fund to invest in early to late-stage startups


Now, crypto exchanges face pressure from investors

Investors are putting pressure on Indian cryptocurrency exchanges as the regulatory environment in the country becomes uncertain.

What’s happening? Some are asking exchanges for higher stakes as milestones haven’t been met. Others are frustrated at their inability to exit because ongoing deals have been put on hold after banks and payment gateways refused to allow cryptocurrency transactions on their platforms. China’s crackdown on cryptocurrency has added to their woes.

Unofficial ban: Most major banks have severed relationships with cryptocurrency exchanges such as WazirX, BuyUCoin and Zebpay, after the Reserve Bank of India informally told them to reconsider their ties with them. Paytm Payments Bank has also pulled the plug on crypto exchanges.

This forced cryptocurrency exchanges to use alternative payment methods to meet an unprecedented surge in user sign-ups.

Regulation in the offing? The Indian government may set up a fresh panel of experts to study the possibility of regulating cryptocurrency in India, we reported on May 19. Sources said the finance ministry is monitoring the growing volume of cryptocurrency trading in India and is talking to stakeholders on potential supervisory risks.


INFOGRAPHIC INSIGHT

Twitter vs Koo


Pharmeasy buys Medlife, eyes IPO at $3 billion valuation

PHARMEASY

API Holdings, the parent entity of e-pharmacy chain Pharmeasy, is in talks for a potential public market listing.

What’s the plan? The company is looking to raise around $400-$500 million, multiple sources told us. The share sale proposal will include both a primary as well as a secondary component, in which some early backers will partially exit. The initial IPO is likely to value the company around $3 billion.

India’s largest online pharmacy: Pharmeasy on Tuesday acquired its smaller rival Medlife in the largest consolidation deal yet in India’s fast-growing online pharmacy sector. ET was the first to report in August last year that Pharmeasy had submitted a proposal to the Competition Commission of India to acquire Medlife.

Covid-19 boosts online sales: Online pharmacies are among a few verticals in the country’s e-commerce sector to have grown during the second wave of the pandemic. According to data from e-commerce services platform Unicommerce, shipment volumes of pharmaceuticals grew by 18% in April compared to the previous month.

Increasing competition: While Reliance acquired a majority stake in Chennai-based Netmeds for Rs 640 crore last August, the Tata Group signed a definitive agreement to acquire a 65% stake in New Delhi-based 1mg earlier this month. Amazon, too, has begun offering its prescription drug deliveries to customers in Bengaluru through its largest seller Cloudtail.


Cloud adoption is a $414-billion goldmine, says Infosys

The increased adoption of cloud technologies represents an opportunity worth over $400 billion, according to a new survey by Infosys.

In its Cloud Radar study, which spanned six countries — the US, UK, France, Germany, Australia and New Zealand — and had over 2,500 respondents, Infosys found that effective adoption of the cloud could bring in up to $414 billion in new net profits annually for businesses.

By the numbers

  • The survey also found that for enterprises to achieve cloud-fueled profit boosts, at least 60% of their IT systems need to be on the cloud, and for businesses to extract maximum benefits from AI, at least 80% of their business functions need to be on the cloud.
  • The study, however, showed that just one in six enterprises have achieved exceptional cloud performance. Only 17% of respondents had shifted over 60% of their business to the cloud in 2020, but that number is expected to reach 41% of businesses by as early as next year.


Top Stories We Are Covering

Flipkart says hired 23,000 over last 3 months: Walmart Inc.-owned Flipkart said it had hired 23,000 additional workers over the last three months (March-May) for various roles in its supply chain, including delivery executives.

Zoho extends its apps to those fighting Covid-19: Zoho Corp has extended its technology platform to government bodies, hospitals and non-governmental organisations (NGOs), to aid their fight against the deadly Covid-19 pandemic in India.

What March jobs data tells us about recovery: Higher number of formal jobs were created in the country in March despite the imposition of fresh lockdowns in several states, suggesting formal job creation in India continued to keep up the momentum.


Global Picks We Are Reading

■ German antitrust watchdog launches proceedings against Google (Reuters)

■ When misinformation comes for the family WhatsApp (restofworld)

■ Florida law will regulate how social media companies moderate speech (Axios)

Today’s ETtech Morning Dispatch was curated by Zaheer Merchant and Karan Dhar in Mumbai





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