Netflix, Hotstar may come under licensing norms despite Bombay HC ruling

Bombay HC has said OTT services don't fall under licensing framework

Last week the central government came up with draft guidelines for amending the Copyright Act, 2013, aiming to bring internet and over-the-top (OTT) service platforms such as Netflix, Amazon Prime Video, Gaana, Saavn, Hotstar,  and Spotify under mandatory licensing rules. 

The new rules could, however, fly in the face of a recent judgment by the Bombay High Court (HC), which held that OTT and internet broadcasting services did not fall under the purview of statutory licensing. Ruling on a commercial suit brought by TIPS Industries against Bharti Airtel’s Wynk Music in April, the Bombay HC held that while Wynk could not permit users to download songs via its platform, there was no bar on the platform being used to listen to the music. 

The court said the provisions of Section 31 (D) of the Copyright Act, which mandates a statutory licence for any broadcasting organisation which intends to broadcast a literary or musical work, would not apply if OTT platforms offered only broadcast and not downloading services.

Opinion is divided on whether the new rules are a move towards content censorship in India. While some believe they are an attempt to override the Bombay HC judgment, others say the draft rules would not have any impact on the content available on these platforms. “As long as the language of the parent Act remains unchanged, it is unlikely that the draft amendment to the rules will have any far-reaching effects,” said Tanya Sadana, senior associate at Ikigai Law.

However, according to some, the draft rules could mean that OTT providers would have to start introducing some form of content regulation. “This (draft rule) is to overturn the recent high court decision. The government has now formally included not just “internet”, but each and every medium of broadcast within the scope of Section 31 (D) by way of these proposed amendments to the Copyright Rules, 2013,” said Salman Waris, partner at TechLegis Advocates & Solicitors.

OTT platforms and content creators are expected to give a strong feedback on the draft rules. Some legal experts pointed out that if the government is indeed inclined to move towards content regulation, it would have to address it through a different amendment. “Regulation of content is not within the ambit of the Copyright Act. It is only for ownership rights and granting of licences. It is not even an objective of the act. It will have to be addressed through a separate act. These rules will not affect the censorship-related guidelines,” Nirupam Lodha, partner at L&L Partners, said.

Content regulation has long been a contentious issue in India and several public interest litigations have been filed over it. In February, the Delhi HC rejected a plea which sought the regulation of content by OTT platforms. The same plea was filed in the Supreme Court, which issued a notice to the central government, seeking its response. Meanwhile, and until there is clarity on the issue, OTT platforms will continue to beef up their user base.