Indian Journal of Law and Legal Research Volume III Issue II | ISSN: 2582-8878

ANALYSIS OF INTERMEDIARY LIABILITY

Aditi Chaudhary & Sanjana Mehta, Jindal Global Law School

I. INTRODUCTION

Today’s digital era brings with it an expanding online world which needs special laws for the
protection of its users from various forms of criminal acts. New challenges arise especially in
the context of copyright infringement as now anyone and everyone has the tools to copy and
distribute copyrighted content to the masses across the world with a mere click. Technology
allows users to stay anonymous and commit such acts at no additional costs to them and at
huge perils of the intellectual property rights holders. To overcome this problem and to offer
substantial reliefs to the rights holders, the legal liability is placed upon the intermediaries who
allow and at times facilitate such wrongs. This is known as intermediary liability.

An intermediary is any person, business or entity that provides the place where people can
publish possibly infringing content.1 It is an actor which provides numerous functions to its
users such as uploading, storing and archiving data and providing access to the internet,
physical or otherwise.2 The Information and Technology Act of India defines intermediaries as
the person who on behalf of someone else receives, stores or transmits information to others
and such person may include internet service providers (hereafter “ISPs”), search engines,
online marketplaces, cyber cafes and more.3 Social networking sites are also considered
intermediaries.4

Around the world, governments are putting liability on intermediaries to take down and block
the content of their users in case it infringes on protected material or is obscene or qualifies as
hate speech.5 Most victims of online copyright infringement choose to take legal action against

1
Vatsalya Vishal; Aditya Sharma, "Into the Crosshairs - The Liability of Online Intermediaries in Case of
Copyright Infringement," Nirma University Law Journal 8, no. 1 (December 2018): 89-96. HeinOnline,
https://jguelibrary.informaticsglobal.com:2055/HOL/P?h=hein.journals/nulj8&i=99.
2
BAILEY, RISHAB. "Censoring the Internet: The New Intermediary Guidelines." Economic and Political
Weekly 47, no. 5 (2012): 15-19. Accessed November 2, 2020. http://www.jstor.org/stable/41419840.
3
Information Technology Act, 2000, India Code, s 2(1)(w)
4
Jhunjhunwala, Garima, and Prashant Kumar. "Developments in India—Website Owner and Service Provider
Liability for User-Generated Content and User Misconduct." The Business Lawyer 70, no. 1 (2014): 307-12.
Accessed November 2, 2020. http://www.jstor.org/stable/43665705.
5
“Intermediary Liability.” Center for Internet and Society, October 30, 1970.
http://cyberlaw.stanford.edu/focus-areas/intermediary-liability.

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the intermediaries, such as ISPs, in addition to the actual infringers for a multitude of reasons.
It is easier to trace the ISPs used to publish illegal content then to trace the individual
contributing user.6 ISPs are usually in a better position to pay the damages arising out of the
liability as opposed to the private infringing party.7 Further ISPs may be in a position to control
the content displayed on their platforms and will be able to remove infringing content from
their servers at the least cost possible. Therefore, it is more reasonable and advantageous for
the copyright owners to hold ISPs accountable for either direct or contributory infringement.

II. INTERMEDIARY LIABILITY- LEGISLATIONS AND CASE LAWS

Different jurisdictions have taken different approaches to what extent should the intermediaries
be held liable. The two main approaches generally taken are the strict liability approach and
notice and take down approach or the Safe Harbor approach. Under the strict liability approach
countries hold the intermediaries unconditionally liable for any user generated content
available on their platforms.8 The Safe Harbor approach, on the other hand, provides immunity
to ISPs provided they fulfill certain conditions.9 Herein, if the intermediary is liable to take
down particular content on being served a notice detailing it to be copyrighted content. If the
intermediary fails to do so, then it will lose its immunity and will be vulnerable to legal action
for infringement. The safe harbor approach is followed in the USA as well as in India which
will be discussed further in detail.

A. United states of America

In 1998, US government added a new section, i.e. Section 512, to its Copyright Act by enacting
the Digital Millennium Copyright Act (hereafter “DMCA”).10 Under the DMCA, ISPs were
given protection from copyright infringement liability in certain circumstances such as
engaging in activities of system cashing, transitory digital network communications storing
information at the direction of users and information location tools.11 The DMCA would be

6
Mittal, Raman. "ONLINE COPYRIGHT INFRINGEMENT LIABILITY OF INTERNET SERVICE
PROVIDERS." Journal of the Indian Law Institute 46, no. 2 (2004): 288-321. Accessed November 2, 2020.
http://www.jstor.org/stable/43951908.
7
Ibid.
8
Viswanath, Anjana. “Intermediary Liability For Intellectual Property Infringement - Intellectual Property -
India.” Welcome to Mondaq. Singh & Associates, March 3, 2020.
https://www.mondaq.com/india/trademark/899230/intermediary-liability-for-intellectual-property-infringement.
9
Ibid.
10
Mittal, Raman. "ONLINE COPYRIGHT INFRINGEMENT LIABILITY OF INTERNET SERVICE
PROVIDERS." Journal of the Indian Law Institute 46, no. 2 (2004): 288-321. Accessed November 2, 2020.
http://www.jstor.org/stable/43951908.
11
Ibid.

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further dependent on ISPs being mere passive actors in the distribution of information and
thereby adhering to the notice and takedown system.12 The provisions under the DMCA have
been criticized on account of granting ISPs the right to easy censorship which often results in
removal of content on the mere suspicion of being infringing without any due process.13 In the
US, indirect copyright liability is also dealt with as vicarious and contributory liability.
Vicarious liability applies in an event where direct infringement has occurred and the defendant
has a right to guard against infringement and some financial interest in the infringement.14
Contributory liability applies when the defendant has the knowledge of direct infringement and
induces or contributes in such infringement.15

The collaborative action of Copyright Act and secondary liability in the form of vicarious and
contributory liability can be seen through the case of Perfect 10 v. Amazon16. Perfect 10, the
plaintiff filed a copyright infringement action against Google, and sought a preliminary
injunction to prevent Google from infringing Perfect 10’s copyright in its images and linking
to websites that provide full-size infringing versions of Perfect 10’s photographs. The District
Court and the Court of Appeals concluded that Google had not infringed Perfect 10’s right of
Display. They also held that Google’s in-line linking and framing of Perfect 10’s full-size
images infringed neither Perfect 10’s display rights nor its distribution rights. The question
then arose whether Google’s use of the Thumbnail images and their process of “in-line-linking”
is infringing Perfect 10’s copyrights on the images and if Google can use the ‘Fair Use’ defense
against this claim?

The court then observed that although the original work is taken but it has been transformed
by Google’s search engine, particularly in light of its public benefit and thus the use is
transformative in nature and there was no spotted evidence of market harm to the plaintiff’s
full-size images and any potential harm to Perfect 10’s market remains hypothetical. Moreover,
Perfect 10 had already exploited the right to first publication and had gained commercially,
therefore it was not entitled to get protections that are available for unpublished works. The
court said, Google’s use of the entire photographic image was reasonable in light of the purpose

12
Ibid.
13
BAILEY, RISHAB. "Censoring the Internet: The New Intermediary Guidelines." Economic and Political
Weekly 47, no. 5 (2012): 15-19. Accessed November 2, 2020. http://www.jstor.org/stable/41419840.
14
Haskel, David. "A Good Value Chain Gone Bad: Indirect Copyright Liability in Perfect 10 v. Visa." Berkeley
Technology Law Journal 23, no. 1 (2008): 405-36. Accessed November 2, 2020.
http://www.jstor.org/stable/24118311.
15
Ibid.
16
Perfect 10 v. Amazon case, Inc 508 F.3d 1146 (9th Cir, 2007)

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of a search engine and since using less than the entire image would defeat the purpose of the
17
search engine to a computer user. Consequently, it was believed that this use by Google's
search engine amounted to a fair use since it had put Perfect 10’s thumbnail images to a use
fundamentally different from the use intended by plaintiff and therefore provided significant
benefit to the public.

As much as this case reinforces the role of the intermediaries like search engines as they play
are vital to facilitate discharge of information to the public, it subsequently calls for a liability
for infringing committed while using their technology.18 The line of reasoning reflects that the
use by Google being for the social benefit and serving the interest of the public, it amounts to
fair use. This demonstrates that the court is promoting a liberal standard for defining the
transformative nature unlike the previous ideology. Nevertheless, the court doesn’t completely
try to evade responsibility but it does suggest that there’s a way out to impose a minimum
liability on the party who could have terminated the event of copyright infringement at the least
cost via imposing a secondary and not a direct liability.19 Further, this case elucidates the issue
and difficulty of protecting the rights of intellectual property holders against such
intermediaries and role of secondary liability in consonance.20

Therefore, it was propounded by the idea of “simple measure”21 which states that a lesser
burden be imposed on the holders of generic tools like search engines and have a higher burden
of liability on the specific functionality tools. This would serve both the purpose of providing
information to the public as well as will protect the copyright infringement.

B. India

Section 79 of Information Technology Act, 2000 (hereafter “IT Act”) provides an exemption
from the liability of an intermediary which could emerge out of legal action initiated in lieu of
the user generated content which is said to be illegal as per the IT act or any other legislation.

17
Ibid.
18
Ding, Meng. "Perfect 10 v. Amazon.com: A Step Toward Copyright's Tort Law Roots." Berkeley Technology
Law Journal 23, no. 1 (2008): 373-403. Accessed November 2, 2020. http://www.jstor.org/stable/24118310.
19
William Landes & Richard Posner, The Economic Structure of Intellectual Property Law 119 (2003).
20
Haskel, David. "A Good Value Chain Gone Bad: Indirect Copyright Liability in Perfect 10 v. Visa." Berkeley
Technology Law Journal 23, no. 1 (2008): 405-36. Accessed November 2, 2020.
http://www.jstor.org/stable/24118311.
21
Ibid at 16.

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This amended provision gives Safe Harbor Protection to the intermediaries.22

In 2008, it was observed in the case of Avnish Bajaj v. State and the Amendment to IT Act
(2008)23, that there’s a need for expanding the scope of protections granted to the intermediaries
and it was then that the safe harbor regime was included under Section 79 of the IT Act and
the definition of intermediaries was amended. The exemption provision provided a safe harbor
from all the unlawful acts as long as they comply with the provisions of the section. In addition
to this, it required proper due diligence on their part to claim safe harbor.

Thereafter in 2011, in furtherance of the 2008 amendment to IT Act, the Information

Technology (Intermediaries Guidelines) Rules, 2011 were issued and certain instructions were
passed, and it was made mandatory for all the intermediaries to follow in order to claim the
safe harbor protection which are to be read in consonance with IT Act. Although even after
these amendments to IT Act and the new the Intermediary Guidelines, there were several issues
like intermediary’s autonomous decisions, dubious content prohibition and anyone could
request for content to be taken down to the intermediaries. The Shreya Singhal v Union of
India24 case resolved all these issues in 2015 wherein the citizens right to free speech was
recognized. It was held that the intermediary, only on the notification of inappropriate content
either by court order or by the government or its agency, will be liable to take down the content.

In 2017, the court observed that in cases of copyright infringement, if intermediaries were given
the sole right to identify and take down illegal content then it would lead to private censorship
and would further have a chilling effect on the right to freedom of speech.25 It was held that
intermediaries will be liable if, despite the actual or specific knowledge of the illegal content
on their website and the notification of the same, they do not takedown the content. It was
ultimately held that there’s no such requirement for a court order in such cases. Further, it was
reiterated that holding intermediaries liable for having the vesting right to filter will interfere
with their rights.26

In 2018, law minister, Ravi Shankar Prasad suggested that the IT act should be revised and
changes be made to the Section 79 in order to curb the growing violence and lynching via social

22
Software Freedom Law Centre, Intermediaries, users and the law – Analysing intermediary liability and the
IT Rules, https://sflc.in/sites/default/files/wp-content/uploads/2012/07/eBook-IT-Rules.pdf
23
Avnish Bajaj v. State, 29 May, 2008
24
Shreya Singhal v. Union of India, MANU/SCOR/58393/2014
25
Myspace Inc. v..Super Cassettes Industries Ltd., MANU/DE/3411/2016
26
Kent Ro Systems Ltd & Anr v. Amit Kotak & Ors, 2017

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media platforms. This led to the advent of the Draft Information Technology Intermediary
guidelines (Draft Rules), 2018. These rules imposed various obligations on the intermediaries,
like enabling traceability to know the originator of such information, proactive monitoring of
content via automated tools, takedown of infringing content within 24 hours.

Thereafter, the court held that any non-compliance of due diligence mandate for intermediary
and in case of failure of abiding by their own policies, the intermediary or the e-commerce
platform shall be held liable and would not be entitled to safe harbor protection.27

India is advancing towards a strict liability of intermediaries, though the rights and protections
along with the liabilities of such intermediaries if evolving. Till date, the Shreya Singhal case
and Section 79 of IT Act are the authoritative law and therefore intermediaries cannot be held
liable unless they fail to comply with the order from court of any competent authority or they
have the knowledge of the illicit content. Although, they are expected to do proper due
diligence in order to avoid any contempt.

III. ANALYSIS OF LAWS IN LIGHT OF THE RIGHT TO FREE SPEECH

The Draft Rules, 2018 proposed to tackle growing disinformation circulation of obscene
content and dissemination of terrorist content on the internet in order to ensure that social media
are not misused by those who want to harm the integrity of the nation as a whole and the
harmony of the Indian society in general. The draft rule holds intermediaries responsible to
proactively filter and take down content using artificial intelligence tools and enable
traceability to figure out the origin of the messages.

While doing this, the government fails to inform the user of the social media platform that their
expression is being censored by the platform on the nudge of the government. Rather than
breaking the discretion and the authority of the intermediaries over the content and its
censorship, these rules gave them further power to do so which resulted in a lack of
transparency and accountability.28 In order to resolve this issue, the government could have
mandated that the intermediaries have to perform the censorship and filtering of content openly
and on a fair and transparent basis and ensure that they will be held liable under the due process.
The users or customers could be given a right to report any illicit content and thereafter the

27
Amway India Enterprises Pvt Ltd v. 1Mg Technologies Pvt Ltd & Anr., 2019
Joshi, Divij. “Accountability, Not Curbs on Free Speech, Is the Answer to Harmful Content Online.” The
28

Wire, December 26, 2018. https://thewire.in/law/accountability-free-speech-online-content.

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necessary steps could be taken by the intermediary to review the complaint and take down the
content. For example, social media handles like Instagram and Facebook give the right to users
to report any abusive or illegal content or behavior to the service providers. Additionally, both
the government and intermediaries should inform the affected user about content take down
instances concerning them. If the content is of public interest, like an investigation report about
corporate corruption, then the public at large should be informed about it. This would further
ensure the transparency via intermediaries in their functioning.

Section 79 which tells us about the exception of Intermediary’s liability is vague and
cumbersome and it is difficult to practically apply this section. There are multiple issues arising
out of the language of Section 79 namely, class of intermediaries include search engines, cyber-
cafes and the internet service providers thereby providing a generality of applicability on all.
Under Indian law, since all types of intermediaries are treated similarly, it becomes difficult to
impose different guidelines for the preliminary examination of the content, depending upon the
type of intermediary.29 Therefore, a single watertight guideline should not be applied to all and
there’s a need to add certain measures which are adapted on the basis of the functional
differences of intermediaries and the section should provide for specific clarification with
regards to the same.

Furthermore, Intermediaries, in order to deflect liability on themselves and avail safe harbor
protection, are required to remove any content which attracts an objection notice without giving
the content creators an opportunity to be heard and defend their work.30 This leads to excessive
and unnecessary censorship as the accuracy of the complaints filed cannot be determined
without proper judicial review. This subjective discerning of intermediaries has severely
negative implications towards the right to free speech and there is an urgent need to replace
this procedure with a more objective one.

The provisions under Section 79 use expressions such as “grossly harmful” and “disparaging”
to describe the content that intermediaries are supposed to take down on account of being
prohibited. However, such terminologies are vague and unclear which may lead to deletion of
more content that is required as it would further minimize the liability risk of these

29
ADVANI, PRITIKA RAI. "Intermediary Liability in India." Economic and Political Weekly 48, no. 50
(2013): 120-28. Accessed November 2, 2020. http://www.jstor.org/stable/24479053.
30
Ibid.

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intermediaries.31 This prohibition may also possibly exceed reasonable restriction to freedom
of speech under Article 19 (2) of the Constitution of India.

Most jurisdictions following the notice and take down approach with intermediary liability,
including India and USA, try to create a balance between safety and accountability of the
consumers of ISPs and the right to exercise their freedom of speech. While it is necessary to
hold ISPs and other intermediaries accountable for the transmission of objectionable content,
it is also imperative to formulate a mechanism wherein the intermediaries are held answerable
to the content creators following a due process of law in instances where non-objectionable
and non-threatening content is taken down by them. The threat to freedom of speech is to be
weighed against the realities of fake news and misinformation provided by ISPs who are the
sole economic beneficiaries of all available information.32 In this regards we propose the
following suggestions, in addition to the above submissions, that should be incorporated in the
laws across the world;

Firstly, there should be a framework of checks and balances. There needs to be a clear
established definition of what social media companies need to do in case the government wants
to take down content. This should also include what rights the user has in case a takedown has
been initiated.

Second, there should be a proper process which allows content take down for every flat instance
where the government finds content problematic. They must approach and send requests to all
social media platforms according to an established process. There should be a noble person
who could act as an authorized representative of the intermediary to coordinate with law in
enforcement agencies. There should be different take down timelines and procedures for
different types of content depending on the severity.

Thirdly, the intermediary should have the right to protect the privacy of the user since take
downs have a possibility of misuse by power hungry people, the intermediaries must act as a
wall between the government and the user unless there is a legitimate case involving ill
intentions the government should not be able to track the identity of an anonymous user.

31
Ibid.
32
Khetarpal, Sonal. “The Delicate Job of Protecting Online Free Speech.” Business Today, January 20, 2020.
https://www.businesstoday.in/current/economy-politics/regulations-are-important-to-protect-free-speech-online-
say-experts-at-sflc-panel-on-intermediary-liability-law/story/394161.html.

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Fourth, intermediaries should not be the arbitrator for deciding what content is good or bad
social media platforms provide space for all sorts of content but if there is anything problematic
that the users think should not be on the platform, they should have the power to decide the
intermediaries. The law should not mandate social media companies to proactively decide what
is acceptable or what is not.

IV. CONCLUSION

With the growing internet usage and technological advancement, the service providers and
search engines avail enormous opportunity and authority to circulate information to the public.
The struggle between accountability and free speech essentially boils down to the contradicting
purposes of copyright to protect exclusive rights while also encouraging public’s access to
information. Using secondary liability to create a balance between the two could be effective
however if brings with it a multitude of problems as seen through this paper. If these four basic
solutions discussed above are put in place, this would ensure a balance between user’s rights,
social media platform, business operation and governance mandate to govern.