We’ve had a busy news day. Let’s get straight to the big stories.
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Spats between the government and social media platforms aren’t exactly rare, but few have escalated as much or as quickly as this one. Twitter said earlier today that it is worried about the safety of its employees in India after the Delhi police raided its offices earlier this week, and that it remains committed to empowering voices and protecting free speech.
Also in this letter:
🚨 Disclaimer rules for influencers
💸 Paytm targets $3-billion IPO
🛒 Amazon’s Prime Day plan
Twitter concerned about Indian employees’ safety
Twitter has said it is concerned about the safety of its employees in India, after the Delhi police descended on its offices in Delhi and Gurgaon earlier this week to serve them a notice over the ‘manipulated media’ label it had placed on tweets made by senior BJP leaders.
- “We, alongside many in civil society in India and around the world, have concerns with regards to the use of intimidation tactics by the police in response to enforcement of our global Terms of Service, as well as with core elements of the new IT Rules,” a Twitter spokesperson said.
That said, Twitter said it will strive to comply with India’s new IT rules, which came into effect yesterday (May 26), although it will continue to be “strictly guided by principles of transparency, a commitment to empowering every voice on the service, and protecting freedom of expression and privacy under the rule of law”.
Government’s response: The government later issued a statement, accusing Twitter of refusing to comply with the regulations that allow it to claim safe-harbour protection from criminal liability in India, and seeking to undermine the country’s legal system. “Twitter’s statement is an attempt to dictate its terms to the world’s largest democracy,” the Ministry of Electronics and Information Technology (MeitY) said.
- “Twitter has a large user base in India, it earns significant revenue from its Indian operations but is also the most reluctant to appoint an India based grievance redressal officer and mechanism, chief compliance officer and nodal officer to whom its own users can complain, when they are subjected to offensive Tweets” MeitY said.
Why is Twitter worried? Twitter is particularly concerned about the requirement to make an individual (the compliance officer) criminally liable for content on the platform. It is also concerned about proactive monitoring requirements and the government’s ‘blanket authority’ to seek information about its customers, according to people familiar with developments at the company. It is also seeking a minimum extension of three months to comply with the new IT rules.
Status check: On Wednesday, the government had sought a report from all social media firms on how they were complying with the new rules. This came a day after WhatsApp filed a rare lawsuit against the government over the traceability requirement in the new IT rules, which it says would force it to compromise the privacy of its users and lead to mass surveillance.
The government later issued a statement saying WhatsApp would be required to disclose the origin of a specific message only in the case of “prevention, investigation or punishment” of very serious offences, and that the government has no intention of violating the privacy of individuals. Read our explainer on the IT new rules here.
Meanwhile, Google chief executive Sundar Pichai also said they are committed to complying with the rules, but noted that it is still “early days” and the company’s local teams are “very engaged”.
Influencer marketing guidelines kick in from June 14
If you are an influencer, it will be required to add a disclosure label to your promotional posts from June 14, as per the final guidelines released by the Advertising Standards Council of India (ASCI) on Thursday.
Stakeholder feedback: The guidelines were framed after receiving feedback from more than 25 different stakeholders, including industry associations such as the Internet & Mobile Association of India (IAMAI), advertisers such as PepsiCo, P&G and Nestle, and content creators such as Dolly Singh, Scherezade Shroff Talwar aka Sherry Shroff, Raghav Meattle, and Varun Duggirala.
Rules for disclosure labels: The guidelines say disclosure labels should be clear, identifiable and prominent (not buried under hashtags), and specify exactly where, how and for how long these labels must appear. ASCI said it has identified AI-enabled tools from a French technology provider Reech to monitor potential violations. Read all the guidelines here.
Response: Leading influencers and their marketing agencies said they welcomed most of the rules, noting that it was largely advertisers who have been reluctant to include disclosure labels.
Yes, but: ASCI is a self-regulatory body and its guidelines are not legally binding. It can ask influencers who fail to abide by the new guidelines to make changes or take the post down, depending on the situation, but cannot enforce these guidelines.
Tweet of the day
Paytm targets $3-billion IPO
Digital payments major Paytm aims to raise $3 billion (Rs 21,800 crore) in its initial public offering (IPO) in India later this year, reports Bloomberg.
- If successful, this could be the country’s largest-ever public issue, surpassing Coal India’s offering, which raised more than Rs 15,000 crore in 2010.
Details: Paytm is targeting a valuation of $25 billion to $30 billion, a jump from its last valuation of $16 billion, when it raised $1 billion in a round led by US asset manager T Rowe Price along with Ant and SoftBank Vision Fund in November 2019. The Noida firm, which also counts Berkshire Hathaway among its investors, is currently India’s most valuable startup, although edtech major Byju’s is hot on its heels.
The issue will include a mix of new and existing shares to meet the country’s regulatory obligations, which require 10% of shares to be floated within two years and 25% within five years, the report said.
Over the years, Paytm has expanded beyond digital payments into banking, financial services, credit cards, stock-broking, mutual funds, wealth management, and digital gold.
However, it is competing with a clutch of domestic and international players including Walmart-backed PhonePe, Google Pay and Amazon Pay. Paytm said it clocked 1.4 billion monthly transactions in March and, with over 20 million merchants on its platform, claims to have the biggest share of the offline payments space.
Meanwhile, Chinese internet conglomerate Bytedance has launched a share buyback for current and former employees this week, according to Reuters.
This comes a week after founder Zhang Yiming announced he would be stepping down as chief executive of the world’s most valuable startup at the end of 2021, amid a larger crackdown by Chinese regulators on the country’s biggest technology firms.
Credit card spending grows, but slowly
Credit card spends grew by only 7.8% in India in the year that ended March 2021, notably down from a jump of 22.5% in FY20, in an indication that discretionary spending remains elusive.
Spending dropped further in April and May, largely due to the spread of the virus and strict local lockdowns across states, a retail head of a private sector lender told ET.
For the quarter ended March, the industry saw a 10% increase in spends while incremental credit card additions rose by 8%, largely due to a low base. On a sequential basis, spends grew by only 4%.
Key factors behind the drop include slower additions, lower credit limits for new customers, banks deactivating many credit cards based on their revised risk assessment of this portfolio since April, and the country’s largest credit card issuer HDFC Bank being banned from selling new cards.
Digital payments soar: In contrast, retail digital payment services, which include the Unified Payments Interface (UPI), Immediate Payment Service (IMPS), and the National Automated Clearing House Payment (NACH), saw their transaction volumes and values almost double in in the last fiscal.
Amazon to hold Prime Day in June, but no word on India
Amazon will conduct its flagship
Customers in India and Canada will however have to wait longer, as the online retail giant had postponed the event in these countries because of the surge in infections earlier this month. No new dates have been announced for India or Canada yet.
Prime importance: The sale has been one of the key ways for the company to increase its Prime subscriber base, which recently crossed 200 million. Amazon has traditionally held the annual sale simultaneously in all its markets.
Last year, too, the company was forced to split the sale due to the virus outbreak: It was postponed to October in most markets and was held here in August. It kicked off a massive recovery for India’s e-commerce sector after the lockdown restrictions were eased last year.