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Liability of ISP revisited under the Information Technology (Amendment) Act, 2008-Not liable if acts as “Mere Conduit”

Section 79 of the IT Act has been revisited in the line with EU Directives on E- Commerce to determine the extent of responsibility of intermediaries for third party data or content. The objective of the directive is to promote free flow of information between the member states. The EU Directive provides for the liability of the intermediaries in a very detailed manner, which includes not only intellectual property rights and associated liabilities but also general content liability. The directive refers to intermediaries as “Information Society Services” which it defines as “Any service normally provided for remuneration, at a distance, by electronic means and at the individual’s request of a recipient of a service”. Thus, the definition is wide enough to include a wide range of intermediaries including content providers and traditional Internet service providers.

The directive recognized the fact that the development of information society services within the Community is hampered by a number of legal obstacles to the proper functioning of the internal market, which make less attractive the exercise of the freedom of establishment and the freedom to provide services. The directive seeks to exempt the intermediary from liability when it acts as “mere conduit” i.e. when he is in no way involved with the information transmitted (Article 12 of EU Directive). The exemption available to intermediary is not available in case he modifies or any way interferes with the information, which alters the integrity of the information (not manipulations of a technical nature which take place in the course of the transmission). Thus, A service provider who deliberately collaborates with one of the recipients of his service in order to undertake illegal acts goes beyond the activities of "mere conduit" or "caching" and as a result cannot benefit from the liability exemptions established for these activities. The EU directive shows that they support the liberalized regulatory/legal measure on intermediary for the free flow of the information. However at the same time, they do not grant any blanket protection to the intermediary.

In line and in consonance with the aforesaid EU directive, the IT AA, 2008 revisited the wordings of Section 79 describing the liability of the intermediary and liberalized the liability of the intermediary which was hitherto strict under the existing section. Now the intermediary is not liable for third party information, data or communication link hosted by him if –

  • The intermediary function is limited to providing access to communication system (transmissions, temporary storage etc.)
  • The intermediary has not initiated the transmission, selected the receiver of the transmission and interfered/modify the transmission.
  • The intermediary observes due diligence and guidelines of the central government.
However, the intermediary would be liable,
  • 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 or
  • if it has actual knowledge or the appropriate government or its agency has notified it that any information, data or communication link residing in or connected to a computer resource controlled by it is being used to commit the unlawful act, and it fails to expeditiously remove or disable access to that material on that resource without vitiating the evidence in any manner

One of the significant amendments in the section 79 is the shift of liability on prosecution to prove the intermediary liable, i.e. prove the preconditions viz. "conspiracy" or "abetment" in commission of offence. Hitherto under the old provision the onus was on the intermediary itself to prove its innocence. Another significant implication of the proposed amendment to the wordings of Section 79 IT Act is that it absolves the ISPs from liability not only for offences or violations under the IT Act but also any other law for instance; Copyright Act, or liability for defamation under IPC.
However, the amended section 79 does not specify as to what constitutes actual knowledge. Does it mean that the intermediaries can even stop access to data/content on receiving frivolous complaints without verifying their genuineness in fear of legal action or liability u/s 79 or if we look it other way would the intermediary require a detailed notice before they remove or disable access to content. The section also does not protect intermediaries from legal action if they, in good faith, remove data or content to prevent possible unlawful activity. The section also does not provide a mechanism for restoring access to data if false complaints are registered with them with respect to data/content as is done in the DMCA of the USA.
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