1 Apr 2010

Liability of Intermediaries under the amended Information Technology Act

This week we have an article from relating to the liabilities of intermediaries under the recent amendments carried out in the Information Technology Act by the Parliament. We had earlier written on the decision of an Australian court declaring that Internet Service Providers were not liable for illegal download, being of the view that the ISP could not control the unauthorised acts of the users. The Indian law has been amended to protect the ISP on similar lines, subject to certain conditions. We have this paper from Mr. Pavit Singh Katoch who holds a masters degree in Law and specializes in Intellectual Property and Information Technology laws where he has sought to explain the changes in lucid detail.


Liability of Intermediaries under the amended Information Technology Act


Mr. Pavit Singh Katoch


After its notification in the official gazette, Information Technology Amendment Act, 2008 finally came into force on October 27, 2009. Under the Information Technology Act, 2000 intermediary was defined as any person, who on behalf of another person, receives, stores or transmits that message or provides any service with respect to that message. However, the Information Technology Amendment Act has clarified the definition “Intermediary” by specifically including the telecom services providers, network providers, internet service providers, web-hosting service providers in the definition of intermediaries thereby removing any doubts. Furthermore, search engines, online payment sites, online-auction sites, online market places and cyber cafés are also included in the definition of the intermediary


Section 79 deals with the immunity of the intermediaries. Section 79 of the old Act (IT Act 2000) was vaguely drafted and was considered harsh on the intermediaries. One such example is the case of Baazee.com (now renamed as ebay.in), an auction portal which is owned by the American auction giants Ebay.com. In this case, the CEO of the company was arrested for allowing an auction of a pornographic video clip involving two students on his website. Under the old Act, intermediaries were exempted only to the extent if they proved that they had no knowledge of the infringement or they had exercised all due diligence to prevent such infringement or offence. This kind of approach made websites liable if constructive knowledge was proved or it lacked sufficient measures to prevent such infringement. It is virtually impossible for any website, having medium traffic, to monitor its contents and involves cost implications as well.


This draconian approach led to the amendment of the Information Technology Act 2000. Under the Information Technology Amendment Act, 2008, Section 79 has been modified to the effect that an intermediary shall not be liable for any third party information data or communication link made available or hosted by him. This is however subject to following conditions:

  • the function of the intermediary is limited to providing access to a communication system over which information made available by third parties is transmitted or temporarily stored or hosted;
  • the intermediary does not initiate the transmission or select the receiver of the transmission and select or modify the information contained in the transmission;
  • the intermediary observes due diligence while discharging his duties.

As a result of this provision, social networking sites like Facebook, Twitter, Orkut etc. would be immune from liability as long as they satisfy the conditions provided under the section. Similarly, Internet Service Providers (ISP), blogging sites, etc. would also be exempt from liability.


However, an intermediary would loose the immunity, if the intermediary has conspired or abetted or aided or induced whether by threats or promise or otherwise in the commission of the unlawful act. Sections 79 also introduced the concept of “notice and take down” provision as prevalent in many foreign jurisdictions. It provides that an intermediary would lose its immunity if upon receiving actual knowledge or on being notified that any information, data or communication link residing in or connected to a computer resource controlled by it is being used to commit an unlawful act and it fails to expeditiously remove or disable access to that material.


Even though the intermediaries are given immunity under Section 79, they could still be held liable under Section 72A for disclosure of personal information of any person where such disclosure is without consent and is with intent to cause wrongful loss or wrongful gain or in breach of a lawful contract. The punishment for such disclosure is imprisonment extending upto three years or fine extending to five lakh rupees or both. This provision introduced under IT Amendment Act, 2008, is aimed at protection of privacy and personal information of a person.


The most controversial portion of the IT Amendment Act 2008 is the proviso that has been added to Section 81 which states that the provisions of the Act shall have overriding effect. The proviso states that nothing contained in the Act shall restrict any person from exercising any right conferred under the Copyright Act, 1957 and the Patents Act, 1970. This provision has created a lot of confusion as to the extent of liability provided under section 79.


Section 79 under IT Amendment Act, is purported to be a safe harbor provision modeled on the EU Directive 2000/31. However, Information Technology Amendment Act 2008 left a lot to be desired. Both EU and USA provide specific exclusion to internet service providers under the respective legislations. In order to clarify the issue and put the controversy to rest, Indian legislators need to insert a similar provision proving immunity to ISP in the Copyright Act, 1957.


It is interesting to note that even auction sites, search engines and cyber café s fall within definition of intermediaries. There is no parallel legislation in the world which provides immunity to such a wide range of intermediaries. This can be reason behind addition of proviso to Section 81. Nevertheless, Information Technology Amendment Act 2008 makes a genuine effort to provide immunity to the intermediaries but has failed to achieve its objective due to loose drafting of few provisions. Indian Legislators need to plug in these gaps and provide indispensable immunity to the ISPs to enable them to operate in India without any fear and inhibitions.


{The Author holds a Masters Degree in Law from Queen Mary's College, London and specializes in Intellectual Property and Information Technology Laws. Current the author is associated with a reputed law firm in India. Views expressed herein are his own. The author may be contacted at affable.sonu [@] gmail [dot] com}

3 comments:

Anubha said...

Pavit your article has highlighted the issue very prominently. There is a indespensable need of providing immunity to the intermediaries especially as a result of conflict between Section 72A and Section 79 of the Information Technology Act, 2000. I hope that the legislature would address the issue and bring clarity as to the immunity of the intermediaries.

suyash said...

pretty insightful and informative.

Raghav Chhabra said...

Hi. I came across your article while researching on the following:

In case an e-commerce portal refuses to pay the vendor his due payment, even though the goods have been delivered to the buyer 1) what is the recourse that the aggrieved party has? 2) does it fall under IT act or can IPC be applied to it since it basically involves non payment by an agent to a principle ?

I would be grateful if you could throw some light on the above. thanks a lot.