The Impact of New Regulations on Online Business Advertising in India

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In a significant move, the Indian government has taken steps to regulate online content providers, including online gaming services and online advertisements, bringing them under the purview of the Ministry of Information and Broadcasting (I&B). This decision aims to ensure better regulation and governance in the rapidly evolving digital landscape. The new regulations will have a profound impact on the online business advertising industry in India, affecting both advertisers and consumers.

The Expansion of Ministry of I&B’s Authority

The gazette notification issued by President Draupadi Murmu enlists “films and Audio-Visual programmes/content made available by online content providers/publishers” within the ambit of the Ministry of Information and Broadcasting, granting the ministry the authority to regulate policies governing gaming content platforms and online advertisements. Previously, these aspects were overseen by the Ministry of Electronics and Information Technology (MeitY) and the Information Technology Act, 2000.

The Need for Regulation in Online Gaming and Advertising

The move to regulate online media was initially set in motion in March 2018 when the then Minister for I&B, Smriti Irani, proposed measures to oversee digital content providers. With the growing influence of online platforms and the need to safeguard users from harmful or exploitative content, the government recognized the necessity for stricter oversight.

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Online gaming, in particular, has raised concerns due to reported incidents of people losing large sums of money, leading to suicides in various parts of the country. The lack of a regulatory framework has also allowed misleading advertisements, inadequate player protection measures, and the absence of a grievance redressal mechanism. These issues have raised societal concerns and necessitated the implementation of regulations.

The Role of the Ministry of I&B in Regulating Online Gaming and Ads

With the new regulations in place, the Ministry of Information and Broadcasting will assume the authority to regulate policies governing gaming content platforms and online advertisements. This move aims to establish a centralized approach to regulation, as state governments have struggled to enforce rules consistently across different regions. The lack of uniformity has created uncertainty for online gaming businesses and advertisers alike.

To address the challenges posed by online gaming, the inter-ministerial task force set up by the Ministry of Electronics and Information Technology (MeitY) has proposed the creation of a central regulatory body. This body will be responsible for determining what games of skill and chance are, certifying different gaming formats, and ensuring compliance and enforcement. The regulations will apply to real money and free games of skill, including e-sports, online fantasy sports contests, and card games, while casual games without real money stakes may be exempt unless they pose specific risks.

The Scope of Regulation and Oversight

The task force has recommended a three-tier dispute resolution mechanism for the online gaming industry. This mechanism consists of a grievance redressal system at the gaming platform level, a self-regulatory body of the industry, and an oversight committee led by the government. This comprehensive approach aims to address player grievances, establish industry standards, and ensure compliance with regulations.

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In addition to online gaming, the Ministry of Information and Broadcasting will also regulate aspects of online business advertising. This includes advertisements promoting betting and gambling platforms, which the ministry has expressed strong disapproval of. The Information and Broadcasting Ministry will oversee the regulation of advertisements and code of ethics relating to content classifications, while the Consumer Affairs Ministry will regulate the sector for unfair trade practices.

The Impact on Indian Gamers and Advertisers

These new regulations will have a significant impact on Indian gamers and advertisers alike. Indian gamers, who have witnessed exponential growth in the online gaming industry, will benefit from a more comprehensive regulatory framework. The regulations will ensure a safer gaming environment, with clear rules and guidelines for operators to follow. This will enhance player protection measures, address addictive content concerns, and promote responsible gaming practices.

Advertisers, on the other hand, will need to adhere to the new regulations governing online business advertising. With the Ministry of Information and Broadcasting overseeing advertisements, advertisers will need to ensure compliance with code of ethics and content classifications. The regulations aim to prohibit misleading advertisements and protect consumers from potentially harmful or inappropriate content.

The Size and Potential of the Indian Online Gaming Market

The Indian online gaming market has experienced remarkable growth in recent years. The revenue of the Indian mobile gaming industry is expected to exceed $1.5 billion in 2022 and is projected to reach $5 billion by 2025. The industry has witnessed a compound annual growth rate (CAGR) of 38% between 2017 and 2020, surpassing the growth rates of China and the United States. The increasing number of new paying users in gaming highlights the immense potential of the Indian market.

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The new regulations implemented by the Indian government to regulate online gaming and advertisements under the Ministry of Information and Broadcasting mark a significant step towards ensuring better governance and protection for Indian gamers and consumers. With a central regulatory body overseeing gaming content platforms and online advertisements, the industry can expect clearer guidelines, enhanced player protection measures, and a safer gaming environment. Advertisers, too, will need to comply with the regulations governing online business advertising to ensure ethical practices and consumer protection. As the Indian online gaming market continues to grow, these regulations will play a vital role in shaping the future of the industry.

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