The Delhi High Court on Wednesday issued notice to the Union Government and social networking sites Facebook India and Google India on a petition by the former Bharatiya Janata Party ideologue, K.N. Govindacharya, which accused the two sites of not verifying details of its subscribers, using the users' data for commercial purposes and evading taxes on their operations in India, and the government of not taking any action against them.
Issuing the notice, the court directed the respondents to file replies to the petition in four weeks.
The petitioner submitted that of the 9 million users of Facebook, 5 million are Indians. The social networking site was transferring their data to the U.S. for commercial use without paying any taxes to the Indian government on their operations here as per the Double Tax Avoidance Agreement.
He urged the court to direct the government to ensure the compliance of the verification norms for the users of the social networking sites, as was being done by mobile companies, to pre-empt security threat to the country.
As per the records of Facebook, about 5 to 6 per cent of their accounts are fake or being operated by anonymous users because the accounts were opened without the user details having been authenticated, the petitioner said adding that while the government had framed detailed guidelines for ‘Know Your Customer' norms for all sectors — and more specifically for verification of mobile subscribers by telecom companies — the same was not being implemented by the networking site, thus causing the biggest security risk to the nation.
The petitioner also raised the issue of invasion of privacy for the sites' users as their data were transferred to the U.S. for commercial use.
He further submitted that Facebook had allowed children below 13 years of age to open accounts — possibly one-third of their registered users — just to exploit the online gaming market and increase advertisement revenue. Facebook's gross revenue for last year was about $37 billion but it was not paying due taxes on their Indian operations as per the provisions of the DTAA.
The petitioner urged the court to stay the operation of services to disingenuous users of Facebook, Orkut and other networking sites and direct the government to stop opening of further accounts by these sites without necessary verification.