The Concept of INTERMEDIARY LIABILITY: An Insight.

Technology regime but numerous concerns with the proposed draft also exists.

The Supreme Court in early week of February, sought responses from the Centre and others on a plea seeking framing of a law to regulate social media platforms like Facebook and Twitter, and make them responsible for allegedly spreading fake news and hate speeches.  This move of the Supreme Court yet again sparks the conversation on the legal regime surrounding intermediary liability.

Who is an Intermediary?

An intermediary has been defined under Section 2(w) of the Information Technology Act, 2000 as “any person who on behalf of another person receives, stores, or transmits that record or provides any service with respect to that record and include telecom service providers, web- hosting service providers, search engines, online payment sites, online auction sites, online market places, and cyber cafes.”  By way of the 2008 Amendment Act, the definition of the term “intermediary” has been broadened and made an inclusive one. 

Intermediary Liability under the Information Technology Act, 2000

The need to protect intermediaries was recognised and in light of the same, certain provisions granting immunity to intermediaries were incorporated in the Information and Technology Act, 2000 in the form of 'safe harbour' provisions. However, the case of Avinash Bajaj v. NCT highlighted the lacunae in these provisions.

Section 79 of the Act is a 'safe harbour' provision that grants conditional immunity to intermediaries from liability for third party acts.  It grants immunity concerning any third-party information, data, or communication link made available or hosted by them. This immunity is however, subject to the provisions of Section 79(2) and 79(3) of the Act.

Section 79(2) essentially covers cases where the activity undertaken by the intermediary is of a technical, automatic, and passive nature. For applicability of Section 79(2), the intermediaries should neither have knowledge nor control over the information which is transmitted or stored.  Furthermore, Section 79(3)(b) of the IT Act, 2000 envisages a 'notice and takedown' regime, wherein the intermediary is required to take down unlawful content upon receiving actual knowledge of its existence.  Furthermore, the Information Technology (Intermediary Guidelines) Rules, 2011 were notified by the central government which inter alia prescribed due diligence practices to be adopted by the intermediaries.

In the year 2005, the case of Avinash Bajaj v. NCT changed the construct of Section 79 of the IT Act, 2000.  Mr. Bajaj, the CEO of Bazee.com (the erstwhile subsidiary of auction portal eBay.com) was arrested after a video clip containing an objectionable matter was posted on his website. This case brought forth issues and concerns relating to intermediaries and in particular discussed the onus of proof lies heavily with the intermediary. Thereafter, Section 79 of the Act was amended in 2008 and exonerated the intermediary from liability for third party information albeit with riders provided under Section 79, sub-section (2) and (3) of the Act.

Important Judgments on Intermediary Liability

In the landmark case of Shreya Singhal v. Union of India , the Supreme Court addressed the issue of whether intermediaries could be left to decide the legality of the content on their platforms. The Court while delivering its judgment held that the requirement for intermediaries to apply their minds for judging the legality of content was absent from the framework of the IT Act. The intermediaries could only be asked to remove content from their platforms vide a court order or by an appropriate government agency. This settled the law on the content takedown and also protected intermediary platforms from liability based on user-generated content and ensured that frivolous takedown requests were culled out, protecting user speech online.

In the matters related to Intellectual Property Rights, the Delhi High Court in the case of My Space Inc. v. Super Cassettes Industries Ltd.  held that an intermediary was liable to take down/remove access to infringing content within 36 hours only upon receiving actual notice which also meant that the complainant ought to have provided the specific details and locations of the works which were being infringed, to enable the intermediary to identify them. The Court opined that the intermediaries can act on actual knowledge and not on basis of an apprehension. This decision also provided a breather to intellectual property owners who did not have to obtain court decisions to make intermediaries take down infringing content.

In the recent case of Amway India Enterprises Pvt Ltd. vs. 1 MG Technologies Pvt Ltd. , the court applied the adage, "with great power comes great responsibility". It held that as per Section 79 of the IT Act, an intermediary shall not be liable for any third-party information, data, or communication link made available or posted by it, as long as it complies with Section 79(2) and (3) of the Act. In other words, the intermediaries have to show that they-

- Do not initiate the transaction,

- Do not select the receiver of the transmission, and

- Do not select or modify the information contained in the transmission.

The aforementioned extent of cases depicts the journey of Indian Courts in interpreting the safe harbour exemption usually applied to intermediaries when they are implicated in litigious suits.

In the case of Kent RO Systems Ltd & Anr. Vs. Amit Kotak & Ors.,  the plaintiffs filed the case to restrain the defendants from infringing its registered designs and e-Bay India Private Ltd for channelizing and aiding in the design infringement by being an intermediary. The Delhi High Court deliberated on the extent of liabilities and rights of an intermediary. The Court opined that:

'To say that an intermediary is required to satisfy itself before posting any information on its computer resource, that the same does not infringe the intellectual property rights of any person, would amount to converting the intermediary into a body to judge whether there is an infringement of intellectual property rights or not.'

The IT Rules only require the intermediary to either remove or disable the information hosted on the portal on receipt of any complaint. The court held that merely because an intermediary has been required under the IT Rules to remove the infringing content on receipt of complaint, it cannot be said that the intermediary must suo moto detect and refuse hosting of infringing contents. Such requirement of screening would be unreasonable interference with the rights of the intermediary to carry on their businesses. An intermediary would be considered to be wilfully negligent only when it has been given information of infringement and it had ignored the same.

In the recent case of Kunal Bahl vs State of Karnataka,  the Karnataka High Court ruled that an intermediary as defined under the IT Act or its directors/officers would not be liable for any action or inaction on part of a vendor/seller making use of the facilities provided by the intermediary in terms of a website or a marketplace. The court ruled that “the only liability of an intermediary under Section 79(3)(b) of the IT Act is to take down third-party content upon receipt of either a court order or a notice by an appropriate government authority and not otherwise.”

It is evident from the above cases that the concept of intermediary liability is gaining an evolving jurisprudence in India.

Proposed Amendments to Intermediary Guidelines, 2011 - The Draft Rules, 2018

The Ministry of Electronics and Information Technology (the MEITY) released the draft of the Information Technology [Intermediary Guidelines (Amendment) Rules], 2018 (the Draft Rules) which seeks to amend the present Information Technology Intermediaries Guidelines Rules, 2011 (the 'Current Rules'). The Draft Rules, 2018 seek to amend existing due diligence rules for Internet intermediary platforms to make them eligible for safe harbour protection from liability arising from third party content. The proposed changes intend to address challenges faced by law enforcement agencies concerning terrorist content, obscene content, issues of public order, and fake news. However, these draft rules are presently under consideration and are yet to be finalized and implemented.

Key highlights of the draft of the Information Technology (Intermediary Guidelines), 2018 are as mentioned below:

- Under Rule 3(2) of the proposed draft, the list of prohibited content has been expanded to include content which promotes consumption of tobacco or intoxicating products and content which threatens the critical infrastructure of India.

- Under Rule 4, an intermediary is required to warn its users at least once a month in case of non-compliance with rules and regulations, user agreement and privacy policy for access or usage of intermediary computer resource.

- Rule 5 of the Draft guidelines introduces mandatory assistance to any state agency, by intermediaries within 72 hours if such a request is made.

- According to Rule 8 of the draft guidelines, 2018, the intermediaries are required to take-down content only upon receiving actual knowledge via court order or upon being notified by an appropriate government agency.

- Rule 9 envisages deployment of technology based automated tools or appropriate mechanisms with appropriate controls, for proactively identifying and removing or disabling public access to unlawful information or content.

Conclusion

As far as the Indian jurisprudence on the concept of Intermediary liability is concerned, the judiciary is proactively taking steps in interpreting the safe harbour exemption and the rights and liabilities of intermediaries in India. The draft Intermediary Guidelines (Amendment) Rules, 2018 seeks to strengthen our Information Technology regime but numerous concerns with the proposed draft also exists. As the intermediaries continue to play a vital role in our day to day lives, it is necessary that a delicate balance should be maintained in freedom of speech and the information made available can be of interest to the general public which is not misguided by false news and other consideration.

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