23 Sep 2019, 15:30 — 6 min read
Background: With increasing internet users in the country, more and more people are relying on online media to gather information related to news, entertainment, current affairs and sports. Vakilsearch in their previous article shared relaxation in compliance laws under the Companies Act. In this article, they share the laws applicable to online media companies in India.
In the digital age, every individual wants to be more updated with current events happening in the world. With the huge urban youth population of India, the evolution of media companies has skyrocketed rather more online than in the traditional media space. The increased dependency on smartphones has had a great impact on the rise of online media companies. Also, goods and services providers are using this to advertise their products through online portals specifically programmed for marketing and outsourcing their products in a worldwide platform.
According to the Information Technology Act, 2000, online media companies could be classified as “intermediaries” which refers to any person who on behalf of another person receives, stores or transmits that record or provides any service with respect to that record. Online media portals are predominantly used for providing information, news or entertainment in various languages to increase the number of subscribers and bring in more profit for the media companies.
However, these companies have to abide by various legal procedures in order to gain such profits right from the setting up of the company to outsourcing it.
Also read: Annual compliance checklist for startups
The Ministry of Information and Broadcasting has issued an official order for forming a committee that will frame and suggest a regulatory framework for online media companies in India. The committee will comprise of 10 members including the secretaries of Ministry of Human Affairs and the Department of Legal Affairs along with representatives from the Press Council of India, News Broadcasting Association and Indian Broadcasters Federation.
With the tremendous growth every minute in media activities online, the risk of exploitation also increases alongside. So the committee is bound to regulate a few aspects such as:
1. Terms of Service – Every company needs to have a unique set of terms and conditions laid out to the customers. These rules must inform the customers about the limitations and conditions to which they are consenting by using the site.
2. Non-compete and non-solicitation – While drafting the partnership deed, one needs to make sure to prevent the partners from setting up a bigger competitive business in the same market once they dissolve the partnership. The deed must also prevent partners from luring away other highly valued employees or partners. These provisions can be set up within a specific time period and within a geographical area.
3. Protection from liability of employee’s acts – As per Indian law, the employer is liable for anything that may happen to the employees during their course of work. So a loyalty clause must be predominantly available in the contract between the employer and the employee in order to protect the company.
4. Ownership of intellectual property – The company must make sure to retain any intellectual property rights of products developed by employees under their purview of business to prevent ideas from passing on to other companies.
Online media companies these days have expanded their scope of marketing by introducing various attractive features. In order to prevent any kind of mishaps, it is mandatory for every company to abide by the laws. With artificial intelligence taking online media to the next level, the need for new laws has increased and the evolution of cybersecurity policies has also become of grave importance in today’s scenario.
Also read: Registrar Of Companies In India
Image courtesy: freepik.com
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Posted byVakilsearch Staff
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