Not so sweet in the middle
Inside NITDA's Draft Code of Practice for social media platforms; Also, CBN's Draft Open Banking Guidelines, and TAT walks back its 50% deposit requirement
Hey guys. Trust you are all doing well.
Here is a quick look at a few developments from NITDA, the CBN, and the Tax Appeal Tribunal that we will be looking at:
Not so sweet in the middle: Inside NITDA’s Draft Code of Practice
CBN’s Open Banking Draft Guidelines; and
Toning Down: TAT walks back the 50% Deposit Requirement
Not So Sweet in the Middle: Inside NITDA’s Draft Code of Practice
I was once at a meeting where we tried a disinformation test, I guess psychologists would know about this. So the trick is that the first speaker whispers a sentence of about 5 to 6 words to a second person and that second person would pass on the sentence to the next person until the circle of people has been covered.
Usually, what happens is that at the end of the circle, it’s never the exact sentence that the first speaker said that the last speaker says. And that is just a little aspect of how information can be contorted where people are involved. In fact, I’ve always had the opinion that it is not easy to regulate what human beings (and bots?) say online. Another personal bias I have is that as long as human beings exist, misinformation/disinformation will always be a thing.
This brings us to our main story. Widely-used social media platforms have the misfortune of dealing with that problem, you know, being the middleman between the individuals who create information in different formats (text, audio, and visual) and the individuals who consume that information on social media platforms.
And Nigeria’s National Information Technology Development Agency (NITDA) is attempting to make the middleman accountable in that role.
On 13 June 2022, NITDA released a Draft Code of Practice for Interactive Computer Service Platforms/Internet Intermediaries. You can download a copy of it here. But before we dig into what the Draft Code says, a little background history of how the Nigerian government has approached content moderation and platform regulation can be found in the 2022 Tech Policy Report we did at Tech Hive Advisory.
Now to what the Draft Code says.
The Code is expected to apply to Interactive Computer Service Platforms (ICSP)/Internet Intermediaries (II). Well, in simple terms, an ICSP is a platform where users create, upload, share, disseminate, modify or access information. While an II is a platform that includes social media operators, websites, blogs, media sharing websites, online discussion forums, streaming platforms, etc. For now, we’ll call all of them ‘platforms’.
The Code goes on to define the different classes of information - a consequential part of our discourse - which these platforms will need to monitor and regulate. But we’ll get more into that later on.
In my own view and contrary to some views I have seen or heard, there are good, bad, and ugly parts to the Draft Code. So it’s not all bad and ugly.
Let’s start with the good. The Code highlights the responsibilities which these platforms are expected to bear as middlemen in the social mediaverse. There are some general responsibilities such as platforms complying with Nigerian law and ensuring that they do not undermine or interfere with the application of Nigerian law. They are also required to design due diligence processes in ensuring that no unlawful content is uploaded on their platform and where uploaded, it is removed after receiving notice from a user or authorized government agency. Again, we will get to what unlawful content means later.
The obligation of platforms to remove content will also apply in cases of non-consensual content which is targeted to harass or intimidate a person or exposes a person’s private areas, or general stuff that falls under nudity, sexual acts, or revenge porn.
I’m sure this man is happy. And No, I won’t be giving context 😂.
Also, generally, there have been complaints that there is a failure on the part of platforms to follow local context in determining misinformation or disinformation, which is probably why NITDA’s Draft Code requires platforms to engage certified local fact-checkers to identify content that may be considered disinformation or misinformation for different local contexts.
Platforms are also required to maintain an open channel through which users and authorized government agencies can lodge complaints regarding content that may be unlawful or harmful. Platforms are also expected to report their findings and resolutions on complaints lodged against content that is unlawful or harmful. Which is good as well.
But. Here comes the bad part.
Remember the point we made on the definition of the different forms of information? The Code identifies about 5 classes of this in the interpretation section.
They are disinformation, harmful content, misinformation, prohibited materials, and unlawful content.
I don’t really have a problem with how unlawful content is defined under the Code and this is because its definition is tied to clear, written law made by the National Assembly, e.g. child pornography is regarded as unlawful content under the Cybercrimes Act, 2015. So there are no ambiguities if the Facebook team were to get a complaint about that kind of content being passed around on its platform.
Where things get murkier in the Code is the definition of some of the other 4 classes of information mentioned above. For instance, the Code defines prohibited materials as “content or information objectionable on the grounds of public interest, morality, order, security, peace, or is otherwise prohibited by applicable Nigerian laws”. Against this broad net, the Code coyly provides that in arriving at the general premise, the platform will consider some written laws that it then lists out… (conveniently leaving out the Nigerian Constitution, of course).
The platforms are required by the Code to not keep prohibited materials or make them available for access on their platforms. Er, okayy. A few questions, who defines ‘objectionable information’? That’s problematic.
And that’s just on prohibited materials. Because I may not be able to highlight my criticisms of all of them. I have drawn a table that features my assessment of all the information types. I guess it’ll make for easier reading. 👇🏼
Again. To be honest, being caught in the middle as the platform on which information is passed around - where some of that information can be damaging to society - is not easy. Social media platforms understand the difficulty of their position and have in some instances, shown interest in being regulated along that line.
In their defense, I can say that some social media platforms are beginning to work in a positive direction despite the difficult process. Already, there are some mechanisms already in use, such as speed-breakers deployed on platforms that control the spread of (mis)information. For instance, before you retweet a tweet with a news link, Twitter gives a teenie-beetie prompt, asking if you have read the article… That’s an example of a speed-breaker, currently used by Twitter and essentially other platforms like FB.
Policies and mechanisms such as the Twitter speed breaker, and other options allowing users to mark content as ‘sensitive content’, have involved the general public in determining how (mis)information is controlled and managed and harmful content is adjudged.
On the last note, one prominent point of concern is the part of the Code that references permitting the affected platforms to provide any information to any authorized government agency for the purpose of carrying out an investigation… or prosecuting an offense.
While everyone seems to be focused on the part of the Code that speaks to morality and information regulation, the prospect of platforms arbitrarily providing information to any Nigerian agency is potentially concerning. Now, though the Code circumscribes the grant of access to a Court order, I’m still circumspect about giving Nigerian government agencies such a wide wiggle room to be able to mandate social media platforms to assist them in investigations.
And this probably points to the eerie quietness of the Code on the subject of respect for the privacy of users, as a fundamental principle that platforms must also reasonably respect?
Well, given that the Code of Practice is still at the draft stage, and NITDA has actually called for reviews/comments, we can expect that stakeholder concerns will be considered before the final copy of the Code is published.
At its current state, this meme may just describe where we are going:
As usual, we will keep our eyes peeled for further developments on this subject.
CBN’s Open Banking Draft Guidelines
Sometime last month, the CBN released the Draft Operational Guidelines for Open Banking in Nigeria. A copy of the draft guidelines can be accessed here.
Last year, in one of our maiden editions on here, we talked about the concept of open banking and the 2021 operational guidelines of the CBN on open banking at the time. The new draft guidelines indicate that the CBN is looking to build the innovations that had been developed since the 2021 Open Banking guidelines.
What do the draft guidelines say?
The draft guidelines clarify the scope of the key participants - API Providers, API Consumers, and the Customer. This approach expands on the 2021 guidelines which limited the scope of participants based on their data access level and the category of service offered. Read more about that here.
Another key improvement under the new draft guidelines is the introduction of comprehensive consent management standards for the benefit/protection of consumers. This is a remarkable step, as consent management has been one of the grey areas in open banking impacting how long, API providers, managing access to customer financial accounts, can hold the gates open.
Additionally, the draft guidelines require the execution of service level agreements between API providers and API consumers, as well as the rules/policies on anti-competition practices of participants. The new guidelines go a long way in establishing several operational standards, such as those guiding information security, etc.
Since it is still at the draft stage, we can hold off on reviewing pending when a final copy is released. So far, the improvements on the 2021 guidelines seem like good stuff…
Toning Down: TAT Walks Back 50% Deposit Requirement
Towards the tail end of last year, we tracked some developments in Nigeria’s tax sector such as the Tax Appeal Tribunal’s order to Multichoice to pay a 50% deposit; the FHC’s (FIRS) Practice Directions, 2021, which also required the 50% deposit of tax assessments before tax appeals can be brought before it; and the Tax Appeal Tribunal Rules (TAT) were also assessed, highlighting the 50% deposit requirement.
Personally, my view of the 50% deposit requirement was that it is a disenfranchising, and needless tool being used by Nigerian tax authorities to harass taxpayers into compliance.
Anyways, an interesting update is in a TAT Ruling in a case between Investment Holdings Limited v. Federal Inland Revenue Service, where the TAT hinted that it may be leaving its tightrope approach on the 50% deposit requirement, as a precondition for taxpayers approaching the Tribunal, to appeal tax assessments.
The basic gist of the case was that FIRS brought a preliminary objection, noting the point that IHL had not paid its 50% deposit as required under Order 3, Rule 6 of TAT Procedure Rules, and Section 15(7) of the 5th Schedule of the FIRS Establishment Act. [We analyzed both well in this Catch-22 article, so it gives a good background to understand the arguments in the extant case.]
Addressing this main gist, TAT ruled that the provisions of the TAT rules derogate from Section 15(7) of the Fifth Schedule to the FIRS Act and that the provisions of the latter should be the overreaching consideration in an application for a security deposit in a tax appeal. TAT further ruled that the 50% requirement under 15(7) of the Fifth Schedule is a discretionary requirement, and the Tribunal is not strictly bound to follow it.
Essentially, the TAT compared the provisions in the FIRS Establishment Act, 2007 (primary legislation made by the National Assembly, which established the TAT and established rules for it to operate) and its own procedure rules issued in 2022 (secondary legislation issued by the Minister of Finance, which makes the 50% deposit requirement mandatory), and rightly ruled that a primary law will supersede subsidiary legislation in addressing questions like pre-action requirements.
This is good news for taxpayers and it has already been tested in another case, Emenite v. FIRS with the TAT maintaining a somewhat similar position.
The key takeaway from these developments is that the FIRS is dead serious about holding the 50% deposit of tax assessments (which sounds batshit crazy), based on the motions they have filed in the two cases so far - IHL v. FIRS, & Emenite v. FIRS.
I also predict the FIRS may pull its lobbying weight in the next amendment of the FIRS Establishment Act (they usually do this through the Finance Acts), to amend Para 15(7) of the Fifth Schedule from being a discretionary requirement for deposits, into a mandatory condition - which would be an unfortunate outcome to this fiasco.
That would be all, lads! Have a great weekend.