Can't govern digital world with rules that keep changing, Pg12

Key Highlights:

• The Ministry of Electronics and Information Technology (MeitY) released draft amendments to the IT Rules on March 30.
• The amendments require digital platforms to comply with ministry advisories, which are governance instruments.
• Advisories, often reactionary to incidents like deepfakes, lack procedural safeguards.
• Governance via advisories introduces regulatory uncertainty, raising economic concerns for businesses.

Detailed Insights:

• Advisories lack prior consultation, defined scope, and predictable timelines, unlike rules and laws.
• A March 2024 advisory introduced a licensing regime for AI systems, potentially hindering AI development.
• Regulatory uncertainty can reduce efficiencies and increase transaction costs in both digital and physical markets.
• A 2023 BCG report estimates digital creators influence $350-400 billion of annual household consumption, projected to reach $1 trillion by 2030.
• MSMEs rely on targeted advertising on digital platforms for revenue and customer acquisition.
• Gaps in the Digital Personal Data Protection Act, 2023, may significantly affect firms' turnover.
• Restrictions on targeted advertising could lead to revenue losses for firms producing goods like toys.
• Advisory governance may operate as governance by fiat, posing challenges to businesses using digital platforms.
• Increased transaction costs from regulatory uncertainty could suppress investment and force smaller firms to exit.

Digital Creator Economy Growth Projection

Key Concepts Involved:

• Digital Intermediary: Platforms that enable interactions between users online.
• Advisory: A non-binding recommendation issued by a government body.
• Regulatory Uncertainty: Unpredictability in the application and enforcement of regulations.