The 72-hour crisis that risks upending Meta’s business in India

Tensions are high between Meta Platforms and Indian regulators after the company came under fire in the country twice in short succession.

The tech behemoth briefly restricted a Facebook post by Prime Minister Narendra Modi addressing students during the Gen Z protests in July, just days after regulators summoned the company over concerns about child-abuse content. While it later said the restriction was due to an “error,” initially the post reportedly indicated the content was blocked due to a “legal request.”

A parliamentary panel on Wednesday demanded an apology from Mark Zuckerberg within three days for the restriction on Modi’s post — failing which it recommends revoking the social media giant’s safe harbor immunity in the country. This would make Meta liable for the user-generated content on its platform.

India is a key market for Meta, with the largest user bases for WhatsApp, Instagram, and Facebook, and legal experts told CNBC that it would become almost impossible for Meta to operate in the country if the safe harbor protection is withdrawn.

They added, however, that India would need to amend the broader legal framework to remove the safe harbor rights of the platform.

Meta, though, is keen to assuage concerns of the regulators, especially those around Modi’s post.

Joel Kaplan, Meta’s chief global affairs officer, who was in a meeting with India’s Information Technology Minister Ashwini Vaishnaw on Wednesday, said he “apologized” to the minister “for the error restricting PM Modi’s post,” the company said in a press statement.

But local media reports the same day, quoting government sources, said that it was Meta’s founder and CEO Zuckerberg who made the apology for the presence of child abuse content, deepfake material and errors in operating the platform.

Meta did not comment on the authenticity of these claims in the official statement shared with CNBC.

In an interview with ANI on Wednesday, Nishikant Dubey, the chair of a parliamentary panel on communications and information technology, wrote to India’s information technology and home ministry, demanding an apology from Zuckerberg himself.

“Zuckerberg must apologize within three days” for deleting Modi’s video addressing students, Dubey said, saying the platform was misusing the privilege of safe harbor protection — adding that if it is revoked “there could be a nationwide flood” of formal police complaints against Meta, he added.

During the Gen Z protests in India last month, Instagram, Meta’s short video app, became a popular platform for public discourse in the country. Modi started to make reels to appeal to the young protesters.

But this growing influence is also exposing the U.S. company to intense government scrutiny over lapses in content moderation and concerns over user privacy. The Indian government last month issued a stern warning to…