LE Blog – India strikes big: 59 Chinese applications hit – By Anuj Trivedi

Riding high on India’s demographic advantage and what seems to be a clear fall out of the rising tensions at the Sino-India border, the Ministry of Information Technology, Government of India, as a ‘shock and awe’ move, issued a press release on June 29 disallowing the usage of 59 applications in both mobile and non-mobile internet enabled devices. This move will have massive impact as India, with over 560 million internet users, is the second-largest online market in the world, ranked only behind China. 

The list of applications which find a mention in the appendix to the press release includes some of the heavyweights of the digital world like WeChat, ShareIt, TikTok and Cam Scanner. Incidentally, the press release issued by the Ministry of Information Technology does not name China and only provides the list of 59 applications the usage of which has been disallowed.

The said press release has been issued under Section 69A of the Information Technology Act, 2000 (IT Act). As per the press release, the Government has taken this step based on ‘credible inputs’ that these applications are engaged in activities which are prejudicial to the sovereignty and integrity of India, defence of India, security of state and public order. The press release also states that the compilation of data collected from Indian users, its mining and profiling by elements hostile to national security and defence of India, impinges upon the sovereignty and integrity of India, and is a matter of very deep and immediate concern which has necessitated these emergency measures.

In this regard, it is pertinent to note that Section 69A of the IT Act, inter alia empowers the Central Government or any of its authorised officer to, if they are satisfied that it is necessary or expedient so to do, in the interest of sovereignty and integrity of India, defence of India, security of the State, friendly relations with foreign States or public order, direct any agency of the Government or intermediary to block for access by the public or cause to be blocked for access by the public, any information generated, transmitted, received, stored or hosted in any computer resource.  

Further, Section 69A(3) of the IT Act provides that an ‘intermediary’ who fails to comply with the directions issued by the Central Government or its authorised officers shall be punished with an imprisonment for a term which may extend to seven years and shall also be liable to a fine.

By invoking the ground of national security, public order and defence, the Government has, in an unprecedented move, taken a big decision which is bound to have massive impact on the Chinese digital market. India has been one of the biggest markets for many of these Chinese applications with popular applications like TikTok having close to 120 million active users.

This move is the second strategic move by the Indian Government in the last couple of months which is aimed at China. In April,  the Government had modified the Indian foreign exchange laws to drop all foreign direct investment from China from the automatic approval list. 

It will be interesting to see that in light of the obligations of an intermediary under the IT Act to comply with the Government orders issued under Section 69, how do Android and iOS platforms react to this Government order. 

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Anuj Trivedi is a Partner with Link Legal India Law Services and has over 15 years of extensive experience in Merger and Acquisition, Private Equity and corporate commercial space with an emphasis on foreign investments and joint ventures. Anuj is a founding member of Asia Pacific M&A Association and has been recognized as a ‘Rising Star’ (Corporate and M&A) in the Asialaw Profiles 2020 Rankings for India.

Disclaimer: The views or opinions expressed are solely of the author.