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How India’s Social Media Regulations Could Affect Twitter

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Holding operators responsible for user posts

India has proposed new social media regulations that would hold operators like Twitter (TWTR) responsible for what users post on their platforms, Reuters reported. In addition, social media operators with more than 5.0 million users in India would be required to open local offices in the country. Twitter doesn’t disclose the size of its user base in India, but Reuters reported that it serves tens of millions of users in the country.

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Regulations could drive costs

India’s proposed social media regulations could increase costs for operators. Reuters reported that social media operators in India are gearing up to fight the regulations.

Driven by rising product development and marketing costs, Twitter’s operating expenses increased 14% YoY to $666 million in the third quarter of 2018. Facebook (FB) and Google parent Alphabet (GOOGL) reported 53% and 27% YoY increases in operating expenses, respectively, in the third quarter. Yelp’s (YELP) operating expenses rose 7.0% YoY in the third quarter, while Snap’s (SNAP) operating expenses were down 7.3% YoY in that period.

Tackling problematic content

India is tightening its social media regulations in order to remove content that can inflame violence and affect the sovereignty and integrity of the country. Fake messages on some social networks in India have been linked to mob lynching in India in recent months. India will adopt the proposed social media regulations with or without changes after a public review that is scheduled to conclude by January 31.

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