The Legal Validity of the Chinese Apps Ban and its Impact on the Economy

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Image Credits: Reuters

Jay Vardhan Sihag
National Law University, Gujarat 

Introduction:

The government of India had banned approximately 118 Chinese apps till around September 2020 in a targeted move to ensure the safety and sovereignty of India’s cyberspace.

Among the apps banned, were some popular millennial essentials like the gaming app PUBG which had taken the nation by storm in the mobile gaming industry which eventually had many serious cases to its name and a strong dissent from parents and public in general.

Another famous social app which goes by the name of TikTok had also been banned on the basis of privacy issues.

This means that there has been a halt in the progress of Chinese firms in a top growing market and it may lay down a precedent for other governments to do the same who are unsure of China and their recent ventures into the world.[i]

Impact on China:

The Chinese government is blaming the Indian Government’s method of banning those Chinese apps in India calling it discriminatory and in violation of WTO rules. Before one delves in to such claims it is important to note that China too has banned major websites like Facebook, YouTube, Twitter, etc. on the pretext of national security and sovereignty.

One of the Chinese companies which had the worst hit in lieu of this ban is ‘Byte Dance ltd.’, a Chinese MNC headquartered in Beijing and a developer of several apps which were banned in India.

The Indian market is of huge importance to the company as the revenues from this market are humongous. In a previous temporary ban for a month, the company had told a local court that it was losing $15 Million a month, according to a Reuters report.

All in all, it can be said that Chinese firms have definitely taken the worst hit out of all the parties concerned.[ii]

Impact on Indian Users:

Out of the top 10 most downloaded apps in India, 6 of them were Chinese, if one puts that into numbers then it’s a completely different ball game, with numbers exceeding beyond a 100 Million. It can’t be denied that a number of users have been severely impacted by the ban of these apps as they had made their way into the daily lives of people. Applications like CamScan which people used on a daily basis to save important documents, gaming apps like PUBG which had gotten extremely addictive for some and was looked at as an actual concern by some too, TikTok which enabled users to share their ideas and creativity and gave a platform for people to showcase themselves, especially during the lockdown, all served a large chunk of the Indian population.[iii]

Although if one were to look at it from a silver lining perspective, it will now enable the growth of homegrown apps and will pave the way for India to be an IT superpower and compete with the likes of USA, UK, Australia, etc. and create a strong hold in that sector. It’s not about getting into world-wide IT market place; it’s about assuming the leadership position in it.

India has also sent a strong message to the world in general and China in particular that it is not dependant on or a victim of China’s policies. Although it is equally important to acknowledge that this move can hurt India in the sense that it may take away a lot of investment that could’ve been received from Chinese IT firms.

The day the app ban on TikTok was levied, its Indian counterpart which goes by the name of ‘Chingari’ saw its downloads increase from around 1 Lakh to more than 1 Crore.[iv]

Legal Aspects of the move:

The government can impose a ban under section 69 of the IT Act under two circumstances – normal and emergency. It seems that the government may have gone with the emergency option. It allows content to be blocked on the directions of the Secretary, Department of IT, who must consider the impugned content and record his reasons for doing so. Although in the normal course, an order to block content requires: (a) a decision to be made by a government committee (b) relevant intermediaries to be given an opportunity to be heard by this committee.[v]

In Shreya Singhal v. Union of India, the Indian Supreme Court upheld the constitutionality of Section 69A of the IT Act and the related Blocking Law. The court argued that information may only be blocked if the central government is convinced that it is appropriate to do so and that the requirement relates to subjects allowed as fair restrictions under the Constitution, and that the grounds for blocking must be reported in writing, which may be challenged by a court of law. In addition, the Blocking Rules provide for procedural protections, including a committee investigating the need to block information and holding hearings for the parties concerned.

The emergency steps taken by the Government and the subsequent series of events, such as the issue of a questionnaire by the Indian Government to the affected parties requesting clarification, suggest that the ban has been enforced by an interim order permitted in cases of emergency where no delay is appropriate (Rule 9).

This order can also be challenged in the court by any party who is affected by the same, but it is unlikely that the companies will take such a step immediately. If so, then it would be up to courts to decide whether the Government has provided sufficient explanation as to what these apps are doing and why the Government had to take such a drastic step of banning them.[vi]

Conclusion:

Today the world recognises that one of the key drivers of economic growth in any country is the digital sector of the economy, and there is no doubt that this sector can be called an electronic backbone for the advantages that are not only useful and essential for the present time, but also for potential developments.

Thus, India needs to realise the significance and strike a balance between the security of the country’s sovereignty and dignity and the growth and development of the digital sector. In order to do this, India must speed up research and development and set up a desirable infrastructure to address such mishaps. In the meantime, when TikTok was banned in India by order of the High Court of Madras last year for a few days, it came back shortly after the ban had been vacated by the court. However this step is more systematic, affects more applications and has been taken into account in a particular context of strategic and national security.


REFERENCES:

[i] https://timesofindia.indiatimes.com/business/india-business/ban-on-chinese-apps-how-it-may-impact-tiktok- other-companies/articleshow/76707803.cms

[ii] https://bnblegal.com/article/impact-of-banning-chinese-apps-in-india/

[iii] https://theprint.in/diplomacy/banning-apps-violates-wto-rules-will-affect-employment-of-indians-chinese-embassy/451938/


[iv] http://www.legalserviceindia.com/legal/article-3504-ban-on-chinese-apps-need-and-impact.html

[v] https://bnblegal.com/article/impact-of-banning-chinese-apps-in-india/

[vi] https://www.law.com/legaltechnews/2020/08/12/technology-turmoil-the-impact-of-india-banning-chinese- apps/?slreturn=20201107085044

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