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Evolving Legal Regime for Internet Intermediaries in India

December 10, 2019

The Internet was launched in India on 15 August 1995 and today India has 451 million active internet users, second only to China, as per a recent study by the Internet and Mobile Association of India. Considering that this number covers only 36% of the Indian population there is tremendous headroom for growth. With rock bottom data prices, access to the Internet, primarily via mobile phones, is increasing at a rapid pace. Global internet giants like Facebook, Google and Amazon see India as the next big market following the saturation of growth in the USA and the problems in China. It is estimated that India will have 448 million social media users by 2023. India is the largest market for Facebook and its messaging application, WhatsApp. At present, WhatsApp has more than 400 million users in India. In e-commerce space Amazon and Walmart owned Flipkart sold merchandise of more than USD3 Billion in over five days of festival sales in October 2019.

The spread of the internet-based economy has given rise to a number of legal issues, primarily related to dissemination due to so-called "fake news", defamation and intellectual property infringement through online platforms and mobile applications. The liability of these platforms, which allow third party users to upload and disseminate content, is becoming a contentious legal issue in India. These platforms are typically called “intermediaries”.

An intermediary, as per the OECD is defined as a system that “brings together or facilitates transactions between third parties on the internet. They give access to, host, transmit and index content, products and services originated by third parties on the internet to provide internet-based services to third parties”. Intermediaries are essentially entities that facilitate a user’s access to content on the internet, either by acting as a platform to host content or as a conduit to facilitate transmission. They facilitate the exchange of information and materials between third parties over the internet.

The issue as to whether the intermediaries should be held liable for the activities carried out by third parties on their platforms is as old as the existence of internet as we know it today. Different approaches to intermediary liability have been adopted by different countries all over the world. While countries like China make intermediaries liable for content on their networks with strict disclosure requirements. Europe and United States largely give immunity to the intermediaries, subject to their following of certain due diligence.

In India, the internet is regulated primarily under the Information Technology Act 2000 (the “Act”). The Act deals with issues such as cybercrime, e-commerce and collection and recording of electronic evidence. The Act is based on the Model Law on Electronic Commerce, issued by the United Nations Commission on International Trade Law (UNCITRAL) and to which India was a signatory.

An Intermediary is defined under Section 2(1) (w) of the Act as “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 service with respect to that record and includes telecom service providers, network service providers, Internet service providers, web-hosting service providers, search engines, online payment sites, online-auction sites, online-market places and cybercafes”. Therefore, an intermediary is any person who, on behalf of another person, receives, stores or transmits a record or provides any service with respect to that record; this includes telecom service providers, network service providers, internet service providers, web hosting service providers, search engines, online payment sites, online-auction sites, online market places and cybercafes.

Section 79 of the Act is the provision that guarantees "safe harbour" protection to intermediaries for third-party content. The original Section 79 protected only network service providers from liability arising from third-party content if they proved absence of knowledge or they exercised full due diligence to prevent commission of an offence or contravention. Subsequently, as internet penetration and use of internet-based products and services expanded, an amendment to the Act was made in 2008.

This amendment made substantial changes to Section 2(w) (intermediaries) and to Section 79 (the safe harbour provision). The new provisions led to the specific inclusion of telecom service providers, network service providers, internet service providers, web-hosting service providers, search engines, online payment sites, online-auction sites, online-market places and cybercafes on the list of intermediaries. It also widened the safe harbour protection given under Section 79 to all intermediaries. It also protected intermediaries from all unlawful acts in addition to the offences and contraventions covered under the Act itself.

The section now states that an intermediary shall not be liable under any law for any third-party content hosted by them if the function of the intermediary is limited to:

providing access to the communication system over which information made available by third parties is transmitted, temporarily stored or hosted;
the intermediary does not initiate the transmission, select the receiver of the transmission or selects or modifies any information in the transmission; and
the intermediary was mandated to observe due diligence and follow the guidelines under the Act.
The Act provided that the safe harbour shall not be applicable:

if the intermediary was aware or was an active participant of the unlawful act; and
if it does not expeditiously disable the access to the link on being made aware of the unlawful nature of the material transmitted through the link.
Subsequent to the amendment to the Act, the Government of India, in 2011, notified The Intermediary Guidelines 2011 (“Guidelines”), which were to be actively followed by all intermediaries. The Guidelines were notified in the year 2011 as rules exercising of powers conferred under Section 87 of the Act. The objective of these guidelines was to regulate the intermediaries who on their platforms host third party user generated content.

The Guidelines prescribe the conduct to be followed by an intermediary. An intermediary is required to publish privacy policy and terms of use; the terms of use should clearly inform users that no illegal content shall be uploaded on the website. Illegal content includes content which is harmful, harassing, blasphemous defamatory, obscene, pornographic, paedophilic, libellous, invasive of another's privacy, hateful, or racially, ethnically objectionable, disparaging, infringing intellectual property, relating or encouraging money laundering or gambling, or otherwise unlawful in any manner whatever. If any content on the platform is against the terms of use, it should be disabled by the intermediary; if any third party informs intermediary of any illegal content, the intermediary has to disable the content within 36 hours. Furthermore, all intermediaries are required to appoint a grievance officer who can receive and resolve any complaints and the contact details of such grievance officer are to be prominently displayed.

Sections 52(b) and (c) of the Copyright Act, 1957, provide protection to intermediaries in case of copyright infringement. The Act protects intermediaries in the case of the transient or incidental nature of the process of electronic transmission or communication to the public of content, and the provision of electronic links, access or integration of content, when not expressly prohibited by the copyright owner. Further, Section 52(c) provides for a notice and takedown mechanism, wherein copyright owners could request intermediaries to remove protected content from their platforms for a minimum period of 21 days, within which the copyright owner has to secure a court order.

In view of various litigations and proliferation of so-called "fake news", the government of India is proposing an overhaul the Guidelines to bring them in line with present requirements. Some of the salient features of the draft Guidelines are:

Intermediaries are required to prohibit the publication of content that threatens public health or safety in addition to requirements of the Guidelines.
Intermediaries are required to deploy automated tools for removing access to unlawful content.
Intermediaries must provide assistance to government agencies (based on a lawful order) within 72 hours. Further, they must enable the tracing of the originator of the information on its platform.
Intermediaries with more than five million subscribers will have to incorporate entities in India and will need to have a grievance officer located in India.
The following provides information on significant cases worth mentioning.

Baazee.com

One of the triggers for amending the Act in 2008, specifically for widening the protection given to intermediaries, was the MMS scandal affecting Baazee.com, the Indian arm of eBay. In this case, a pornographic MMS clip was listed for sale on Baazee.com. For selling the illegal content on its website, Avnish Bajaj, the then Managing Director of Baazee.com, was arrested and criminally charged with provisions dealing with pornography and obscenity under the Indian Penal Code, 1860 (the “IPC”), and the Act. In a petition challenging the criminal charges against him, the Delhi High Court in Avnish Bajaj v State held that a prima facie case for obscenity could be made against Baazee.com, and although a case could not be made against Avnish Bajaj for provisions under the IPC, he could be charged for the publishing of obscene content in electronic form as per Section 67 of the IT Act. On an appeal made by Avnish Bajaj against the charge under Section 67 of the IT Act, in 2012 the Supreme Court of India quashed the proceedings against him on the ground that the prosecution of the Managing Director could not go ahead without arraigning the company as an accused party. Subsequent to this case, the Act was amended to avoid the possibility of a repeat of this event.

Shreya Singhal v Union of India

This is perhaps the most significant case concerning the Act in India. In Shreya Singhal v Union of India, the interpretation of the safe harbour provisions under Section 79 of the Act was dealt with extensively by the Supreme Court of India. Two girls, namely Shaheen Dhada and Rinu Srinivasan, were arrested by the Mumbai police in 2012 for expressing their displeasure at a strike called in the wake of the death of a local political leader in Mumbai. The women posted their comments on Facebook and, by virtue of the comments being posted there, the police invoked Section 66A of the Act and arrested the girls. It was felt that the police have misused its power by invoking Section 66A of the Act, which gave police the power to arrest any person who sends an offensive and inflammatory message via a computer resource. The Supreme Court tested the validity of Section 66A, 69A and the scope and responsibility of an intermediary to monitor user generated content under Section 79. The petitioners contended that powers under these sections violate the freedom of speech and expression guaranteed under Article 19 (1) (A) of the constitution of India. The Supreme Court struck down Section 66A of the IT Act as unconstitutional for having a chilling effect on free speech.

This was a landmark judgment in the Supreme Court’s jurisprudence as, for the first time, the court recognised the free speech rights held by users of the Internet. On the issue of intermediary liability, the Supreme Court held that the "actual knowledge" requirement for an intermediary to take down content under Section 79 (3) (b) has to be read to mean either an intimation in the form of a court order or, on being notified by the government and/or requests by courts or governments, must be restricted to the limitations listed by Article 19(2) of the Constitution. The court similarly interpreted the "actual knowledge" requirement from the Guidelines to mean knowledge through court order.

MySpace Inc. v Super Cassettes Industries Ltd

In this case, the division bench of the Delhi High Court reversed the judgement of a single judge which had held MySpace liable for copyright infringement in the case of the upload of infringing content by users. This case is significant as the court adjudicated on the liability of intermediaries who let third parties upload user generated content protected by copyright laws. In this case, the court distinguished Intellectual property infringement cases from the issue of free speech cases and read the meaning of the words "actual knowledge" under Section 79 to mean “…In the case of copyright laws it is sufficient that MySpace receives specific knowledge of the infringing works in the format provided for in its website from the content owner without the necessity of a court order…”.

The court further held that, should a copyright owner provide a list of specific links infringing copyright to an intermediary and the intermediary does not remove the infringing content, safe harbour may be denied. However, the onus is on the plaintiff to show that, despite giving specific information, the defendant did not comply with the copyright owner’s request. The court also dwelled on the advent of private censorship and the chilling effect on free speech if private entities are tasked with identifying infringing content.

Kent RO Systems v Amit Kotak

In this case, defendants included eBay, on whose platform the products infringing the design registration of the plaintiff were listed for sale. The plaintiff wanted the intermediary (eBay) not only to remove existing infringing products, but to screen similar listings in future and remove any infringing products without the need for the plaintiff to raise the issue every time. The court rejected the claim and held that intermediaries cannot be expected to exercise such vigilance over their platforms, nor adjudicate on the issue of infringement, thought they are liable, and obliged, to remove infringing content on being notified by the rights owner.

Christian Louboutin v Nakul Bajaj & Ors.

This is a significant judgement from the Delhi High Court in context of IP infringement on e-commerce platforms. The court was answering a pivotal question: can an entity which actively promotes sales on its platforms and provides value added services to facilitate these sales be categorised as an intermediary under Section 79. The Court, in this case, listed 26 points to determine if an entity can claim safe harbour protection for intermediaries. The list was based on the role played by the intermediary in the transaction between the seller listing the product on the website and the buyer buying the product through the website.

In this case Christian Louboutin’s products were listed on the defendant’s e-commerce website, www.darveys.com. The defendant’s website listed a complete catalogue of the plaintiff along with an assurance that the products were genuine. The plaintiff had not authorised the defendant's use of its registered trademarks and logos. The defendant argued that it is an intermediary, hence will not be liable for trade mark infringement. With respect to the arguments of "safe harbour protection" taken by the defendant, the plaintiff argued that, since the defendant assured authenticity and genuineness of the products, it could not make use of the protection, and its activities amounted to active participation rather than passive participation.

The High Court, after careful scrutiny, listed factors to be considered while deciding if a platform is an active or passive intermediary. Safe harbour protection can only be accorded to the passive intermediary who can claim lack of knowledge. The Court further held that, besides the list of factors to consider if the platform is an intermediary, the court may consider the following additional factors to determine if the intermediary carries the due diligence of its sellers:

the existence of agreements between sellers and the platform;
the manner in which terms are enforced;
the consequences of any violation of terms of use by the sellers;
whether adequate measures are in place to ensure that rights of trade marks owners are protected; and
whether the platform has any knowledge of the unlawful acts of the seller.

Subodh Gupta vs Herdsceneand & Ors.

This case has been filed by the plaintiff, a reputed artist, against allegations of sexual harassment by the anonymous Instagram handle @Herdsceneand. The allegations were afterwards reported by other media. The Delhi High Court, after hearing arguments, directed Defendant No.1, Google and Facebook to take down the defamatory posts which had made the anonymous allegations. On 30 September 2019, Facebook entered an appearance and undertook the removal of the weblinks of the defamatory posts. On 14 October 2019, Google argued that, being a search engine, it cannot remove or take down links unless the links are available online through other media outlets and such an order of court will stifle free speech. Facebook has also been ordered to disclose the identity of the anonymous handle in a sealed cover on next date of hearing. Google Inc. reiterated that it is merely a search engine and is, therefore, unable to control the content uploaded but, if the content is available on any website, Google Inc. would disclose the same.

The Ld. Single Judge enquired of Google Inc. counsels whether it is technically feasible for them to devise technology with respect to taking down particular content as and when the court passes an order, and further directed Google Inc. to file an appropriate reply in this respect by 18 November 2019, the next date of hearing.

Patanjali Ayurved Ltd. v Google LLC

In this case, the plaintiffs were a reputed Indian Fast-Moving Consumer Goods (FMCG) company, Patanjali Ayurved Limited, and a renowned Yoga guru, Swami Ramdev, who is closely associated with the FMCG Company. The case was filed in relation to certain videos containing defamatory, disparaging and threatening statements against the plaintiffs, and had been filed against Google, Facebook and YouTube. In the course of the hearing, it was even conceded by the intermediary (YouTube) that the video in question was against their community guidelines and policies and that they had suo-motu blocked the relevant URL’s from their platform, across the globe. The Delhi High Court held that the video must be taken down by the intermediaries in the Indian, as well as the global, domain since the plaintiffs conduct business internationally and have a global reputation that stood to be hurt by the video. Since the content violated the community guidelines and policies of the social media companies, they complied with the order.

Swami Ramdev & Anr. v Facebook Inc & Ors

This is recent judgement of Delhi High Court where defamatory content was posted against Swami Ramdev, represented by Athena Legal. The Single Judge of Delhi High Court issued a global injunction a global injunction and directed removal of defamatory content against Swami Ramdev. The court relied on Section 79 of the IT Act which gives extra territorial jurisdiction to Indian courts in relation of issues covered under the IT Act. The court directed:

Removal of defamatory content globally in cases where such content was uploaded from IP addresses based in India to ensure that such content is not accessible anywhere in the world.
In case any content is uploaded from outside India such links will be removed from Indian domain to ensure that users in India are unable to view the same.
Facebook has filed an appeal before two judge bench of the High Court against the said order contending among other things that since defamation laws vary in each country hence global injunction interferes with laws of other countries and the plaintiff has alternate remedies under the Indian laws against the persons uploading the content hence global injunction is not required. The two judge bench has admitted the petition while not staying the order of the single judge but also directed the respondent not to file any contempt applications till the appeal is decided.

Social media accounts and proof of identity (Aadhaar) linking cases

Anonymous social media handles starting rumours and spreading so-called "fake news" is a rampant, and growing, problem in India. Two petitions were filed before the Madras High Court in July 2018, by animal welfare activists Antony Rubin and Janani Krishnamurthy, calling for Aadhaar, or any government-authorised proof of identity, to be mandatory for any email or social media accounts. Similar pleas were filed before the High Court of the State of Madhya Pradesh and the Bombay High Court. Facebook decided to approach the Supreme Court, requesting the transfer of all petitions seeking similar relief to the Supreme Court, negating the possibility that all three high courts may give a different opinion.

The Supreme Court vide order, dated 24 September 2019, has observed that some mechanism needs to be evolved whereby the originators of so-called "fake news", rumours and individuals indulging in criminal activities could be traced. The court has not yet taken a view on the linking of social media accounts with a government issued identity card. The court has sought a reply from the government regarding a proposed amendment to the Guidelines and the associated timeline. However, at the same time court has made it clear that under no circumstances may the privacy, dignity and reputation of any person be compromised. The matter is still being heard by the apex court of India. Subsequently, the government, in its affidavit to the court, has said that the revised Guidelines would be implemented in the next three months and consultations with respect to the same are ongoing. The court has also accepted the transfer petitions and will now hear the matter.

Conclusion

Over last few years, initiating from the Shreya Singhal judgement in 2012 (see below), the courts in India have been proactive in adjudicating on internet intermediary related issues. The analysis shows:

Aspects of Intellectual Property (IP) infringement and hate speech are fundamentally different and the same set of intermediary guidelines may not work for both.
In the context of combating so-called "fake news" and online rumours, courts need to be careful about the individual’s rights of privacy and reputation.
Going forward, safe harbour will have limits and intermediaries will need to show their passive role in online transactions to avail safe harbour.
Indian courts are increasingly seeking the removal of defamatory content globally, rather than only within India. 

practiceguides.chambers.com/practice-guides/litigation-2019-second-edition/india/trends-and-developments

Trends and Development
Authors

  

         Rajat Prakash                            Siddharth Mahajan                   Simranjeet Singh

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