Streaming platforms like Netflix and Amazon Prime Video might be endangered if the government goes ahead with the draft E-commerce policy in its current form.
A news came out earlier this month that the Department of Industry and Internal Trade (DPIIT) decided to extend the submission date of stake holder comments on the policy from February 23 to March 29. However, the minor digital players who asked for extension were concerned more about data, ownership and operational rules. Therefore, Netflix and Hotstar are conspicuously stood out.
Also, the major issue is the detonation of e-commerce in the current draft policy. It defines E-commerce as ‘buying, selling, marketing or distribution of goods, including digital products and services, through an electronic network. It further alludes to the foreign direct investment (FDI) policy in e-commerce, also released by the DPIIT, whose press note 2 (2018) says an e-commerce platform in which foreign investment has been made cannot exude ownership or control over the inventory sold on its platform.
The e-commerce detonation will also be applicable to the press note 2. This makes the industry very apprehensive about what the policy means for services companies. There was some Information given by at senior industry body representative, who did not wish to be named.
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Another official said, “Netflix will be treated as FDI under the current rules as most of the production originates out of its US parent company.” Although, other e-market giants like Flipkart and Amazon have dodged the restrictions posed by press note 2. Also, by the detonation of services, companies like OYO, OLA and Microsoft will be affected.
The regulation of the OTT platforms has swung between the information and broadcasting ministry, the ministry of electronics and Information technology, and the Telecom Regulatory Authority of India. The draft policy uses e-commerce, electronic communications, and digital economy interchangeably. The possible addition of OTTs under the e-commerce policy further complicated scenario.
Therefore, a list can be made after the election and entertainment services may be governed under specific provisions.