Facts
• The CEO and MD of the National Stock Exchange of India (NSE) were shown in movies produced by artificial intelligence (AI) encouraging regular investors to join a WhatsApp group for stock selection advice. The Bombay High Court ordered social media companies, including Meta and WhatsApp, to remove these videos. The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 (IT Rules), according to the Court’s ruling, require social media intermediaries to take down deceptive and fraudulent content.
• The interim application filed “by the NSE (plaintiff) to order the social media sites (defendant nos. 1 to 6) to remove AI-generated videos of Mr. Ashish Kumar Chauhan, the MD and CEO of the NSE, was being considered by Justice R.I. Chagla. This application was submitted in connection with an IPR lawsuit that targets false and deceptive social media advertisements that infringe upon and pass off NSE’s trademark.
• The first “deep fake” video included the MD and CEO convincing regular investors to join a WhatsApp community in order to choose stocks. It was released by the Meta page “Stock Analyst.” It further stated that investors would receive weekly stock recommendations from the NSE for financial gain. In a similar vein, the second video, which was uploaded by the page “The Sky of the Stock Market,” advertised a WhatsApp group for stock selection and assured investors that the NSE would pay them if they lost money. These videos were shared on WhatsApp groups and Telegram channels, along with other phony videos.
• The NSE argued that if the phony movies were to continue to be distributed, investors would suffer severe consequences and incur losses. It said that the phony recordings will harm NSE’s standing as a top market regulator and cause it to suffer financial and reputational losses. NSE additionally argued that the intermediary/social media platform was required by Rule 3(1) of the IT Rules to take reasonable measures to ensure that no information that violates intellectual property rights or disseminates false or misleading information is hosted, displayed, or transmitted.
• The NSE was unable to identify the individuals who posted phony films, thus the High Court observed that an interim application was also filed against an unidentified person (defendant nos. 7 and 8). The belief held was that the videos, which were shared by individuals who remained completely anonymous, were, at first glance, deceptive and fraudulent marketing.
Judgement
• The Court cited Rule 3(1) of the IT Rules, noting that, within thirty-six hours of receiving a court order, an intermediary must swiftly remove or prevent access to content that is
fraudulent or violates intellectual property rights. According to the ruling, social media companies have a duty to respond to complaints that the NSE receives in order to stop any infringement of users’ rights on the sites.
• The court stated that the intermediaries, ”defendant Nos. 1 through 6, are required by the IT Rules to respond promptly to complaints from parties, including the Plaintiff, alleging that their rights are being violated by the unauthorized use of the Plaintiff’s trade mark on questionable websites, profiles, accounts, advertisements, videos, contents, and social media groups. According to it, the NSE established a strong case for the granting of ad
interim relief against the middlemen and any unidentified offenders.
• “The plaintiff also has the advantage of convenience, and if the ad-interim relief requested is not granted, the plaintiff will suffer irreversible loss and/or harm,” the statement stated. As a result, the Court ordered the social media middlemen to remove the fraudulent videos from their networks. Additionally, it instructed them to remove any false or deceptive content from their platforms within ten to fourteen hours of the NSE filing a complaint.
• It ordered the middlemen to submit information about the offenders who posted phony films online or used the NSE’s brand. In addition, it directed the unidentified offenders to desist from utilizing NSE’s trademark and from producing and disseminating phony films and other misleading materials.
National Stock Exchange of India Ltd. Vs. Meta Platforms, Inc. & Ors. (Interim Application (L) No.21456 of 2024 In Com IPR Suit (L) No.21111 Of 2024)
Aishwarya, B. A. L. Lb. (Hons), Mody University Of Science And Technology, Laxmangarh, Intern At Legal Vidhiya
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