The Bombay High Court recently addressed an urgent matter brought forward by the National Stock Exchange of India Ltd (NSE) against several social media intermediaries, including Meta Platforms. NSE sought a takedown order to address the circulation of fabricated videos on social media platforms such as Facebook, Telegram, etc.. which falsely depicted NSE’s CEO Ashishkumar Chauhan, endorsing stock-picking services.
In April 2024, NSE’s Cyber & Information Security Team discovered fabricated messages and videos using NSE’s trademark “NSE”, suggesting that the content was endorsed by NSE. These videos used AI-generated deepfake technology to mimic the likeness of NSE’s CEO, who was seen falsely endorsing stock-picking services and directing viewers to join fraudulent WhatsApp groups for stock recommendations and even promising to reimburse any losses incurred by investors who followed its advice.
NSE argued that despite taking immediate action by reporting false advertisements to the relevant parties, the removal process was delayed by the social media intermediaries. NSE claimed that the intermediaries were responsible under the IT Rules, 2021 for not only promptly removing the infringing content but also to exercise due diligence and prevent the hosting and circulation of misleading content. NSE sought urgent relief, including removing the videos, blocking pages using its trademark, and disclosing the identities of the perpetrators. NSE vehemently argued that the fake content had the potential for market manipulation and the false information could severely impact investors and undermine trust in India’s financial markets.
Meta Platforms contended that while it was committed to complying with the IT Rules, it could not take on a censorial role in determining the legality of content.
The Court, after considering the submissions and relevant IT Rules, specifically Rule 3(1), noted that intermediaries are required to exercise due diligence to prevent the hosting, sharing, or dissemination of information that infringes on intellectual property rights or misleads users. The rule mandates that intermediaries promptly remove or disable access to infringing content within 36 hours of a Court order or notification from the government. Therefore, Meta Platforms & Ors., being intermediaries, were under an obligation to take swift action on complaints regarding the unauthorized use of NSE’s trademark on dubious websites, profiles, ads, videos, and social media groups, as outlined in the complaint.
Consequently, the Court granted interim relief to NSE, restraining the defendants, including unknown individuals (joined as Defendants 7 and 8 under the John Doe principle), from further distributing the fabricated videos. It also ordered Meta and other intermediaries to remove the infringing content within 10 hours of receiving complaints from NSE. Additionally, the court directed the intermediaries to disclose information about the perpetrators behind the fake videos. The court acknowledged that such actions were necessary to prevent further harm to NSE’s reputation and to protect investors from falling prey to fraudulent schemes.
Citation: National Stock Exchange Of India Ltd vs Meta Platforms Inc & Ors., Bombay High Court, 16 July, 2024 [Interim Application (L) No.21456 Of 2024 in COM IPR Suit (L) NO.21111 OF 2024] Available on: https://indiankanoon.org/doc/156122165/
Authored by Bhavishya B, Associate, BananaIP Counsels
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