E-Commerce Intermediary Liability

The Draft Information Technology [Intermediaries Guidelines (Amendment) Rules], 2018 (hereinafter referred as the ‘Draft Rules’) issued on December 24, 2018 and by the Ministry of Electronics and Information Technology. The Draft Rules seek to amend existing ‘due diligence’ guidelines [The Information Technology (Intermediaries Guidelines) Rules, 2011] which are to be followed by ‘intermediaries’ [as per the Information Technology Act, 2000 (“IT Act”)].

KEY FEATURES

Prohibited Categories: The Rules require each intermediary to publish terms of use. These terms of use are required to prohibit the user from hosting certain content, including content that is grossly harmful or obscene. The Draft Rules prohibit a new category of information which threatens ‘public health or safety’ and includes promotion of cigarettes or tobacco products or consumption of intoxicants including alcohol and nicotine.

• Removal of content: Any intermediary must, on receipt of a court order or on being notified by the government, remove access to unlawful content. These are acts related to the sovereignty of India, security, and public order, among others. Such removal must be done by the intermediary within 24 hours. Further, intermediaries must also deploy automated tools to identify and remove public access to unlawful content.

• Assistance: Intermediaries must provide assistance to government agencies (based on a lawful order), within 72 hours. Further, they must enable tracing of the originator of the information on its platform.

• Registered physical presence: Certain intermediaries must be incorporated in India, under the Companies Act, 2013. These are those with more than fifty lakh users or as notified by the government. They must also have a permanent office in India, and designate persons for coordination with government agencies

For further information on Draft Information Technology [Intermediaries Guidelines (Amendment) Rules], 2018, please write to us at info@ssrana.com.

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The concept of Intermediary Liability is widely used in context of Intellectual Property on various levels. The role played by the Intermediaries in the use and spread of Intellectual Propertu is what accounts for their growing value and makes them easily accessible and available, serving the very purpose of their creation. Currently, intermediary liability in case of an IP infringement is to the extent when they actively participate in the process and are not just mere service providers for transmission of data. This is so because the internet intermediaries, since they are service providers, have a responsibility to keep a tab on what is being published on their platform. On this point intermediaries usually defend themselves on two grounds:

• They are only a providing a platform wherein third parties can connect with each other.
• The different variety of content along with the extent and time at which it is published or uploaded on the portal makes it almost impossible for them to scrutinize each and every content that is uploaded on their site.

Therefore, whenever an intermediary fails to act against an infringement, even after sufficient knowledge of it, then it would be liable. This rule is followed by most countries across the globe.

The concept of “safe harbor” under Section 79 of the IT Act, 2000 acts as a defense for the  intermediaries but there are instances where there is a clear infringement of Intellectual Property Rights by the intermediaries.

For further information on INTERMEDIARY LIABILITY AND IP INFRINGEMENT in India, please write to us at info@ssrana.com.

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Meaning of Intermediaries in India

“Intermediary” with respect to any particular electronic records, means any person who on behalf of another person, receives, stores or transmits that record or provides any services with respect to that record and includes telecom service providers, network service providers, internet services providers, web-hosting service providers, search engines, online payment sites, online-auction sites, online-market places and cybercafés

Meaning of Interactive websites in India

This includes social media sites like Facebook and Twitter that act as platforms to store and retrieve content, blogging platforms like Blogspot and WordPress, auction sites like eBay, and payment gateways like PayPal. The pictorial representation gives an overview of the intermediaries involved in a common internet transaction.

Meaning of Web hosts in India

These are service providers like Godaddy.com that provide space on server computers to place files for various web sites so that these sites can be accessed by users.

Meaning of DNS providers in India

These service providers translate the domain names (eg. www.sflc.in) to addresses (eg. 64.202.189.170) that can be understood by computers.

Meaning of Search engines in India

These are web sites like Google and Bing that help users to search for specific information on the web and provide links to web-sites having content relevant to the search terms given bye the user.

Meaning of Internet Service Providers (ISP) in India

Internet Service Providers (ISP) in India like Airtel and MTNL help users to get connected to the internet by means of wired or wireless connections.

For further information on Inportant terms Intermediary Liability in India, please write to us at info@ssrana.com.

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Regulation of intermediaries liability in India – The dependency on internet is increasing at an alarming rate. As per a 2017 report, India had 331.77 million internet users. This figure is projected to grow to 511.89 million internet users in 2022. Despite the untapped potential, India already is the second-largest online market worldwide. Although the advancement of technology and internet has brought with it all related benefits but has also led to massive increase in cyber-crime which directly or indirectly affects people. These crimes involve a wide range of malicious activities including cyber extortion, identity theft, credit card frauds, hacking the personal data from the computer, phishing, illegal downloading, industrial espionage, piracy,  counterfeiting etc. All these crimes somewhere have a connection with an intermediary. Thus, discussing and understanding intermediary liability is of utmost importance.

The regulation of intermediaries gained momentum during early 90s, with the dawn of internet in India. In the beginning the regulation was limited, however as cyberspace began expanding its horizons, the issue of the scope of intermediary liability also gained pace. The role of intermediaries also evolved based on its scope, the information it shares and number of users it is reaching. The legal responsibility of an intermediary has travelled a journey, which started with an umbrella protection from any kind of liability.

In the year 2000, Section 79 for the first time legally spoke about liability of intermediaries. It provided expansive protection (a safe harbor) to intermediaries for third party content as long as they had no knowledge of its illegality or exercised due diligence. Further, in the year 2008, the amendment to Information Technology Act made it mandatory for the intermediaries to exercise due diligence to get protection under section 79 of the Act.

In the year 2018, the next leap was taken wherein the Delhi High Court in the case of Christian Louboutin v Nakul Bajaj clarified and further expanded the scope of an intermediary’s liability. It held that ‘When an e-commerce website is involved in or conducts its business in such a manner, which would see the presence of a large number of elements enumerated during the case, it could be said to cross the line from being an intermediary to an active participant. In such a case, the platform or online marketplace could be liable for infringement in view of its active participation. Needless to add, e-commerce websites and online marketplaces ought to operate with caution if they wish to enjoy the immunity provided to intermediaries.’

LIABILITY

The liability of intermediaries can be found under the following:

• Section 79 of the Information Technology Act, 2000
• Rule 3 of Intermediary Liability Guidelines, 2011
• Clause 27 of Guidelines and General Information for Grant of License for Operating Internet Services
• Draft Rule 3 of Draft Intermediary Guidelines, 2018

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E-Commerce Laws India

Safe Harbour Protection India – “Intermediary” is defined widely and depending on the context can include entities as varied as internet service providers, social media companies, e-commerce apps, and even cyber cafes. The passage of the IT Act in the year 2000 saw the first version of an intermediary liability law in India in the form of Section 79. It provided expansive protection (a safe harbour) to intermediaries for third party content as long as they had no knowledge of its illegality or exercised due diligence. The concept of “safe harbor” under Section 79 of the IT Act, 2000 acts as a defense for the intermediaries but there are instances where there is a clear infringement of Intellectual Property Rights by the intermediaries.

The intermediaries like ISPs, web hosts, social networking sites and blogging platforms provide important tools and platforms that allow users to access the Internet, host content, share files and transact business. Websites like Blogspot, Youtube and Facebook only provide a platform for users to post their content, and do not have any editorial control over this content.

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E-Commerce Intermediary Liability In India

Intermediary Liability – Meaning

Interactive websites like blogging platforms, messaging apps, social media and e-auction sites host / transmit user-generated content. Cyber cafes, free WiFi providers and telecom companies such as providers of broadband and mobile data act as a mere pipeline for people to access the Internet. Sometimes content posted by users could be illegal, like content infringing on someone’s copyright or pornographic content. The intermediaries who host / transmit this content could also be held liable for the content if they do not satisfy the conditions for gaining immunity from such liability laid down by the law.

Intermediaries under the Information Technology Act, 2000 in India

Intermediary has been defined under Section 2(w) of the IT Act,2000 “Intermediary” with respect to any particular electronic records, means any person who on behalf of another person, receives, stores or transmits that record or provides any services with respect to that record and includes telecom service providers, network service providers, internet services providers, web-hosting service providers, search engines, online payment sites, online-auction sites, online-market places and cybercafés

What cannot be registered under Information Technology (Intermediaries Guidelines) Rules, 2011 in India?

You cannot host information that is:

• grossly harmful,
• harassing,
• blasphemous,
• defamatory,
• obscene,
• pornographic,
• paedophilic,
• libellous,
• invasive of another’s privacy,
• hateful, or racially, ethnically objectionable,
• disparaging,
• relating or encouraging money laundering or gambling,
• or otherwise unlawful in any manner whatever,
• harm minors in any way or
• infringes any patent, trademark, copyright or other proprietary right

For further information on Intermediary Liability in India, please write to us at info@ssrana.com.

To know more about Informatio0n technology law in India, read below:

IT Laws

Cyber law in India