Twitter Losses Big After Failing to Comply with New IT Rules by the Indian Government
The shares of Twitter have taken a hit amid the tussle with the Indian government over the new IT rules. Twitter’s attempts to impact domestic politics in India and the determined uncompromising response by the government has caused to be a costly affair for the social media giant.
While social media platforms like Google and Facebook have agreed to comply with the new IT rules of India, not everyone is on board. The shares of the social media giant Twitter have taken a hit amid the tussle with the Indian government over the new IT rules. The Indian government’s decision to tame the social networking site accused of spreading fake news has slowed a rally in the New York Stock Exchange (NYSE) listed stock.
How Twitter Lost its Intermediary Status?
Twitter’s attempts to impact domestic politics in various countries, including Nigeria and India, and the determined uncompromising and tough response by the respective governments have caused to be an expensive affair for the social media service site.
The Indian government notified the social media platforms about the information technology (Intermediary Guidelines & Digital Media Ethics Code) rules to in February 2021 and the regulations came into force on May 25. However, Twitter did not comply with the rules initially, and asked for extra time to follow the Indian laws. The clash with the Indian government had a bearing impact on the micro-blogging site, as its stocks hit a low of $50.11 on May 13. The introduction of new IT rules by the India government to bring transparency in the social media platform’s operations can be cited as a significant factor for the crash in the stock.
On June 5, the Indian government sent a warning and a final notice to the micro-blogging site to comply with the new IT rules. However, Twitter once again failed to comply with the rules. Thus, the Indian government has promptly pulled out Twitter’s intermediary status for not complying with the new IT rules despite notifications.
The networking giant lost its intermediary status in India on June 16, after the Indian government said it gave Twitter numerous opportunities to follow the new IT rules. The stock closed at $59.93 on 16th June at a decline of 25.78% after touching a 52-week high of $80.75 on February 26. Since then, the firm has lost around 22.54% or $13.87 billion in market cap till date.
What Was the Reason for Unpleasant Consequence for Twitter?
Twitter interfered into the domestic affairs of India, wherein the micro-blogging site took a vigorous interest in promoting censured nationalist contents and content specific to a particular ideology. The social networking site marked tweets put out by ruling party (BJP) leaders, government accounts, and nationalist accounts as ‘manipulated media’ in the name of fighting fake news, which angered the ruling government in India.
Oddly, the tag of ‘manipulated media’ was just limited to nationalist accounts as the social media giant did not mark any accounts that promoted left-wing members and the accounts associated with the Congress (opposition party) ecosystem, even though such accounts openly propagated lies. Twitter’s sinister designs created a massive chaos in India with social media users accusing the social networking site to be interfering in the country’s political affairs.
The loss of intermediary status of Twitter meant that its top executives, like the country managing director, may now face criminal liability and police questioning under IPC over ‘inflammatory’ and ‘unlawful’ content posted on the platform by any user. Now, the legal immunity provided to Twitter over content moderation in India is officially over.
Reportedly, the Indian government is not happy with the defiance of the social media company, which has been constantly eluding compliance with the Indian rules. According to the government, frequent reminders and even the temporary relaxation extended to the social networking site as a ‘goodwill gesture’ has not yielded results.
What’s Holding Back Twitter to Comply with the New IT Rules?
After the reports of Twitter’s loss of legal intermediary status made headlines worldwide, the social networking site has revealed the reasons for not complying with the new IT rules. As per the top authorities of Twitter, the social media giant is looking to establish an office prior to hiring officers for the required roles. As per some sources, the company is making progress with relation to establishing a suitable local office for Twitter Inc. with the advice of consultants in India, before hiring CCO and other officers on a permanent basis.
On the other hand, the Communications, Electronics & Information Technology Minister, Ravi Shankar Prasad said that Twitter was given numerous opportunities to reach to a decision to comply with the Indian rules and the social networking site has deliberately taken the path of non-compliance.
The culture in India varies like its vast geography. In certain scenarios, even a small spark cause fire with the intensification of social media, especially with the risk of fake news. The government of India clarified that this was the major objective for bringing the Intermediary Guidelines.
Lastly, from the battle going on between Twitter and Indian government over the last few months, it is clearly visible that the social media giant is losing big, both in terms of financially and politically.
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