India’s Tweet-heart (Koo) and the Chains of Regulations

Summary

Despite its preliminary fame, Koo shut down in 2024 due to an unsustainable business model. Within a year, Koo had amassed 4.7 million users, largely fueled by recommendations from ministers and government officials. Launched in March 2020, Koo allowed customers to post and consume content in several native Indian languages and quickly gained acceptance amid a dispute between the Government of India (GoI) and Twitter during the 2020-21 farmer protests. Koo emerged as a nationalist Indian alternative for Twitter, designed to accommodate India’s linguistic diversity. This article studies the factors that contributed to the rise and fall of Koo, focusing on the nature of social media platforms and India’s regulatory environment, along with proposing policy alternatives.

Koo’s Downfall

Koo rode the political wave for a while but did not realise it was a double-edged sword. While helping with initial consumer acquisition, it also limited the appeal of the platform to the wider market, leading to a perception of bias and a lack of neutrality. This sentiment hindered the platform’s ability to attract diverse advertisers and buyers, which is critical for long-term sustainability. In their last announcement, the founders of Koo also mentioned from their experience that investors didn’t want to associate with platforms that deal with user-generated content. While the guidelines mentioned in the IT Rules, 2021 were intended to ensure company accountability and user safety, they added to the operating burden for platforms like Koo. Costs associated with compliance can significantly impact resource allocation for budding technology companies that otherwise should invest in innovation, user experience, and engagement. It is fair to believe that investors would also not be interested in funding companies that have to burn so much just to be allowed to function.

Despite its early successes, Koo failed in setting up a sustainable enterprise version. Social media platforms generally generate revenue through advertising and subscriptions at the highest rate. Koo, too, introduced a few premium features, but that wasn’t enough to cover the huge costs that platforms have to bear. However, Koo faced stiff opposition from connected players like Twitter and Facebook, who had advanced advertising systems and larger consumer bases.

Challenges Faced by Koo

Social media structures thrive on community implications, with the platform’s value increasing with user diversity. These platforms not only compete with other apps in the market but also, as Reed Hastings from Netflix once said, with sleep. Koo’s initial boom was fueled by a combination of patriotism and government support, resulting in a brief surge in user acquisition. However, maintaining a social media platform requires continuous engagement and a robust infrastructure, which require hefty investment. Koo’s support of Indian languages turned into a huge differentiator, catering to a market underserved through global platforms. But this presented additional challenges in moderating content that involved people from diverse societies. Koo became popular in Brazil - after a butthole joke and in Nigeria - where Twitter is banned. In the context of the tussle between content moderation requests and free speech, such a diverse platform would definitely have struggled to keep things clean. According to reports, hate speech was reported multiple times, but Koo took action only on a few. The platform also failed to constantly innovate to attract and retain users.

Koo’s Rise

Koo’s popularity rose during the tussle between the Government of India (GoI) and Twitter in early 2021 during the farmers’ protest. At this time, radically networked societies formed and backed the protest leveraging the power of social media. The one-to-many network effect was obvious as both citizens and non-citizens, celebrities and commoners, got involved in voicing their opinions. GoI asked Twitter to suspend accounts allegedly spreading disinformation during farmers’ protests. Twitter’s refusal to reportedly completely comply led to a tense standoff. Twitter also published updates on its blog to explain the reasoning behind its decisions and maintain transparency. Taking advantage of this situation, Koo positioned itself as a patriotic substitute and gained support from many government officials and ministers, greatly boosting its user base. This was also the time when the government banned Chinese apps, citing national security and pushing for Atmanirbhar Bharat.

History and Context

Koo, released in March 2020 by Aprameya Radhakrishna and Mayank Bidawatka in an attempt to place itself as a microblogging platform tailored to India’s multilingual population. Unlike Twitter, Koo supported Indian

languages, providing a platform primarily for non-English speaking Indians to voice their opinion publicly.

India’s Regulatory Environment

History

India’s regulatory environment has played a big role in Koo’s trajectory, but it is also interesting to look at how India’s regulatory environment shaped post-independence.

In the early years after the country attained independence, the government had a monopoly over media through the radio and television (Doordarshan) with a major focus on nation-building. While the media, in general, was regulated, it transformed into censorship during the 1975 emergency in India. In the early 1990s, privatisation opened its door to channels like Zee TV and Star Plus, which brought home the first wave of independent entertainment in India while being regulated by the Cable Television Networks Act 1995. The internet era in the early 2000s, followed by the rise of OTT platforms in the 2020s, is when IT Acts took over, raising concerns over free speech in the country, among other things.

Present-Day Challenges

MeitY introduced the Information Technology Rules, 2021 to tackle online harms and address user privacy. Due to the lack of public consultation, the rules received much backlash and have adversely affected internet companies and users. While cases against the rules were heard by the Kerala, Bombay and Madras High Courts, where they ordered a stay on specific provisions of the IT rules, it has broadly been implemented. The Broadcasting Services Bill 2023 has also been in the talks lately. The government allegedly held meetings with select stakeholders regarding a revision which is allegedly to bring OTT platforms under the scope of broadcasting regulations. While it poses a severe threat to independent media in the country in the 2023 version, reports say that the revised version now wants to control independent content creators on platforms such as YouTube.

Here is a brief on sections in the IT Rules 2021 that have impacted the ease of doing business for internet companies such as Koo and the ecosystem in totality.

Compliance and Ease of Doing Business

According to the Economic Times, more than 85 percent of internet intermediaries feel that the mandates in IT Rules 2021 have an adverse impact on the ease of doing business in India.

1. The rules subclassified social media based on the number of users in India. Intermediaries with more than fifty lakh users were termed significant social media intermediaries. In a country of 954.40 million internet users as of March 2024, the threshold is merely 0.52%. Companies like Koo, who were just getting started but received much attention because they were at the right place at the right time, crossed this limit quickly and faced the burden of compliance that would have impacted their ease of doing business. For comparison, at the time of laying down the rules, the other popular platforms had between 53 crore (WhatsApp) and 1.75 crore (Twitter) users in India, as published by the Press Information Bureau.

2. The timelines to takedown content range between 24 and 36 hours based on content type. This catch-all solution with no gradation of content may impact innovation. The added cost due to compliance burdens can also divert VC interest from firms dealing with

user-generated data, hurting the overall startup ecosystem in the country.

Due Diligence and Criminal Liability

1. The IT rules mandate intermediaries to provide information to law enforcement agencies within 72 hours, which is beyond the scope of Section 69A of the IT Act. To prevent abuse of this rule, there should be a defined limit on the number of agencies that can regulate compliance and a detailed SOP on how to do so.

2. Rule 3(1)(h) requires content and account data removed from public view to be retained by the intermediary for 180 days. This storage cost may become too much for smaller intermediaries (in terms of revenue) to bear. However, splitting this into smaller timelines, such as 90 + 90, as mentioned by the impact assessment study by IAMAI, should help here, i.e., delete after 90 days if not asked to retain explicitly.

3. Significant social media intermediaries have been asked to appoint three specific officers who handle compliance and grievances to comply with the IT rules. The rules hold the Chief Compliance Officer liable for the company’s failure to comply and make them criminally liable. This

will force the officers to play safe in most circumstances, resulting in a subconscious or confirmation bias when evaluating requests for law enforcement agencies.

4. The added cost due to compliance burdens can also divert VC interest from firms dealing with user-generated data, hurting the overall startup ecosystem in the country.

User Rights and Data Privacy

1. Rule 4(2) mandates originator traceability, which will prevent end-to-end encryption. This will put users in danger of cyberattacks and surveillance by the state and other entities with harmful intent.

2. Rule 4(4) encourages the use of technology-based measures to identify and remove explicit content, such as depicting rape and child sexual abuse. The absence of strong AI laws further complicates the situation. SOPs must be listed in detail, including emergency procedures, with a plan for a technology kill switch.

3. Terminology, like national security, can become an easy way to abuse power and make things difficult for both the intermediaries and users.

Policy Recommendations

To ensure trust from all stakeholders, improve ease of doing business, and to safeguard the digital rights of a citizen, here are a few things the government should consider doing.

● Prevent direct involvement in domestic or internationally grown intermediaries, which may adversely affect the firm’s image because of the government’s inherent style of functioning.

● Hold multiple rounds of open public consultation.

● Form multistakeholder panels to review the amendments and act as a regulatory body, which includes folks from the government, policy think tanks, human rights activists, and technology rights groups.

● Devise a content gradation mechanism that guides response timelines from intermediaries.

● Modify the data retention mandate to 90 days which can be extended to 90 more days when explicitly requested.

● Remove mandates that affect user and data privacy, including traceability, monitoring, and verification.

● Hold corporations accountable for noncompliance with financial penalties over criminal proceedings against employees.

● Implement SOPs for technology-based content filtering and information requests from law enforcement agencies.

● Mandate yearly reminders to users about the existing grievance redressal process and information on the Grievance Officers.

● Define terminology like national security, half-truths, indecency and others in detail to avoid abuse of power.

Appendix

References

● Ajmal, Anam. “‘We have over 4.7 million users on Koo … our vision was to build something catering to hundreds of languages.’” The Times of India, 16 March 2021,

https://timesofindia.indiatimes.com/blogs/toi-edit-page/we-have-over-4-7 -million-users-on-koo-our-vision-was-to-build-something-catering-to-hun dreds-of-languages/. Accessed 28 July 2024.

● BBC, editor. “Farm laws: India PM Narendra Modi repeals controversial reforms.” BBC, 18 November 2021,

https://www.bbc.com/news/world-asia-india-59342627. Accessed 1 August 2024.

● “Cable Television Networks Regulation Act and Rules.” Department of Excise Entertainment & Luxury Tax,

https://excise.delhi.gov.in/excise/cable-television-networks-regulation-ac t-and-rules. Accessed 1 August 2024.

● Economic Times. “85% intermediaries say new IT rules will negatively impact ease of doing biz Read more at:

https://cio.economictimes.indiatimes.com/news/business-analytics/85-in termediaries-say-new-it-rules-will-negatively-impact-ease-of-doing-biz/9

2665827.” Economics Times, 5 July 2022,

https://cio.economictimes.indiatimes.com/news/business-analytics/85-in termediaries-say-new-it-rules-will-negatively-impact-ease-of-doing-biz/9 2665827. Accessed 30 July 2024.

● Ghosh, Jhumur. “INDIRA GANDHI'S CALL OF EMERGENCY AND PRESS CENSORSHIP IN INDIA: THE ETHICAL PARAMETERS REVISITED Dr. Jhumur Ghosh Assistant P.” University of Calcutta, 2016,

https://www.caluniv.ac.in/global-mdia-journal/Article-Nov-2017/A4.pdf. Accessed 3 August 2024.

● Goyal, Piyush. 'I am on Koo.' 9 February 2024,

https://x.com/PiyushGoyal/status/1359058583934013442. Accessed 28 July 2024.

● Internet Freedom Foundation. “Letting Hate Flourish.” February 2024, https://content.internetfreedom.in/api/files/divco3ywedt9rpe/gqw7bta563 tmt4w/letting_hate_flourish_february_2024_X799jhQefO.pdf?ref=static.i nternetfreedom.in. Accessed 28 5 August.

● Kamat, Payal. “Updates on our response to blocking orders from the Indian Government.” Blog, 10 February 2021,

https://blog.x.com/en_in/topics/company/2020/twitters-response-indian government. Accessed 5 August 2024.

● Mehta, Ivan. “Indian social network Koo gains popularity in Brazil but faces moderation challenges.” TechCrunch, 22 November 2022, https://techcrunch.com/2022/11/22/indian-social-network-koo-gains-pop ularity-in-brazil-but-faces-moderation-challenges/. Accessed 31 July 2024.

● Ministry of Electronics & Information Technology. “Frequently Asked Questions (FAQs) on Part II of the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021.” Digital India, 1 November 2021,

https://www.meity.gov.in/writereaddata/files/FAQ_Intermediary_Rules_2 021.pdf?ref=static.internetfreedom.in. Accessed 5 August 2024. ● Ministry of Electronics & Information Technology, Government of India. “The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 20211 [updated as on 6.4.2023] In exer.” MeitY, 6 April 2023,

https://www.meity.gov.in/writereaddata/files/Information%20Technology %20%28Intermediary%20Guidelines%20and%20Digital%20Media%20 Ethics%20Code%29%20Rules%2C%202021%20%28updated%2006.0 4.2023%29-.pdf. Accessed 30 July 2024.

● Ministry of External Affairs, Government of India. “Nigeria signs up for Indian microblogging platform Koo.” 6 June 2021,

https://indbiz.gov.in/nigeria-signs-up-for-indian-microblogging-platform-k oo/. Accessed 28 July 2024.

● NITI Aayog. 'Form India; For the world! 9 February 2021. Twitter, https://twitter.com/NITIAayog/status/1359094490825302021. Accessed 30 July 2024.

● The New Indian Express. “Media bodies voice concern over draft broadcasting services bill.” The New Indian Express, 9 August 2024, https://www.newindianexpress.com/nation/2024/Aug/08/media-bodies-v oice-concern-over-draft-broadcasting-services-bill-2#:~:text=The%20go vernment%20had%20released%20the,digital%20news%20and%20curr ent%20affairs. Accessed 10 August 2024.

● PIB, Delhi. “Government Bans 59 mobile apps which are prejudicial to sovereignty and integrity of India, defence of India, security of state and public order.” PIB, 29 June 2020,

https://pib.gov.in/PressReleseDetailm.aspx?PRID=1635206. Accessed 27 August 2024.

● Press Information Bureau Government of India Ministry of Electronics & IT. “Government notifies Information Technology

(IntermediaryGuidelines and Digital Media Ethics Code) Rules 2021.” 25 February 2021,

https://pib.gov.in/Pressreleaseshare.aspx?PRID=1700749. Accessed 29 July 2024.

● Radhakrishnan, Aprameya. Linkedin, July 2024,

https://www.linkedin.com/feed/update/urn:li:activity:7214158389881262 081/. Accessed 8 August 2024.

● Shreya S. & Tiwari P. (2022, July 4). IT Rules, 2021: A Regulatory Impact Assessment Study (Vol. 1). New Delhi. The Dialogue and Internet And Mobile Association of India.

● Shreya, S., Rizvi, K., Tiwari, P. & Saxena, G. (2023, July 17). IT Rules, 2021: A Regulatory Impact Assessment Study (Vol. 2). New Delhi. The Dialogue and Internet And Mobile Association of India.

● Singh, Deep. “Twitter Removes Accounts in India Under Pressure From Modi.” The New York Times, 10 February 2021,

https://www.nytimes.com/2021/02/10/technology/india-twitter.html. Accessed 30 July 2024.

● Telecom Regulatory Authority of India. “Telecom Regulatory Authority of India.” Telecom Regulatory Authority of India, 4 July 2024,

https://www.trai.gov.in/sites/default/files/QPIR_04072024_0.pdf. Accessed 4 August 2024.

Additional Notes

● Grammarly, QuillBot and ChatGPT were used for grammar checking and paraphrasing.