Government's AI Deepfake Labeling Rules Spark Major Industry Backlash! Will Startups Sink or Swim?

Author

Simar Singh | Whalesbook News Team

Detailed Coverage:

The Indian government's advisory mandating AI labeling to combat deepfakes is facing strong opposition from the industry body, IAMAI. IAMAI has raised concerns that the draft amendments to the IT Rules are too broad, potentially capturing routine digital edits, and are difficult to implement on a large scale. They argue that existing provisions under the IT Act and IT Rules adequately address unlawful synthetic content, making new, prescriptive measures redundant.

IAMAI highlighted that the proposed definition of Synthetic and Manipulated Content (SGI) is so expansive it could encompass simple edits for accessibility or moderation. They also warned that mandatory watermarking and metadata insertion could harm user experience, raise privacy concerns, and impose heavy compliance burdens, particularly on startups. The association emphasized that Section 66D (impersonation) and Section 79 (safe harbour) of the IT Act already cover deepfake issues.

The Ministry of Electronics and Information Technology (MeitY) proposed visible/audible labels on at least 10% of synthetic content and expanded due diligence for intermediaries. However, IAMAI deems these technically infeasible due to immature technologies and lack of industry standards. They also pointed out the failure to distinguish between platforms hosting third-party AI content and those offering first-party AI services, which could unfairly impact AI providers.

Impact: This news can significantly impact technology companies, social media platforms, and AI service providers operating in India. Regulatory uncertainty could slow down innovation and investment in the AI sector. Investor sentiment towards these companies may be affected, leading to potential stock volatility. Rating: 7/10

Difficult Terms Explained: Synthetic and Manipulated Content (SGI): Content that is artificially generated or altered using technology, often AI, to appear real. Intermediaries: Online platforms or entities that host, store, or transmit data or content provided by users, such as social media companies. Deepfakes: Highly realistic AI-generated videos or images that can depict individuals saying or doing things they never did. MeitY: Ministry of Electronics and Information Technology, the government department responsible for digital technology policy in India. Safe Harbour: Legal protections for internet intermediaries from liability for content posted by their users, provided they adhere to certain regulations. Watermarking/Metadata: Digital information embedded within a file (like an image or video) to identify its origin, authenticity, or other properties.