Report on Intermediary Liability in India

The question of when intermediaries are liable, or conversely not liable, for content they host or transmit is often at the heart of regulating content on the internet. This is especially true in India, where the Government has relied almost exclusively on intermediary liability to regulate online content. With the advent of the Intermediary Guidelines 2021, and their subsequent amendment in October 2022, there has been a paradigm shift in the regulation of online intermediaries in India. 

To help understand this new regulatory reality, the Centre for Communication Governance (CCG) is releasing its ‘Report on Intermediary Liability in India’ (December 2022).

This report aims to provide a comprehensive overview of the regulation of online intermediaries and their obligations with respect to unlawful content. It updates and expands on the Centre for Communication Governance’s 2015 report documenting the liability of online intermediaries to now cover the decisions in Shreya Singhal vs. Union of India and Myspace vs. Super Cassettes Industries Ltd, the Intermediary Guidelines 2021 (including the October 2022 Amendment), the E-Commerce Rules, and the IT Blocking Rules. It captures the over two decades of regulatory and judicial practice on the issue of intermediary liability since the adoption of the IT Act. The report aims to provide practitioners, lawmakers and regulators, judges, and academics with valuable insights as they embark on shaping the coming decades of intermediary liability in India.

Some key insights that emerge from the report are summarised below:

Limitations of Section 79 (‘Safe Harbour’) Approach: In the cases analysed in this report, there is little judicial consistency in the application of secondarily liability principles to intermediaries, including the obligations set out in Intermediary Guidelines 2021, and monetary damages for transmitting or hosting unlawful content are almost never imposed on intermediaries. This suggests that there are significant limitations to the regulatory impact of obligations imposed on intermediaries as pre-conditions to safe harbour.

Need for clarity on content moderation and curation: The text of Section 79(2) of the IT Act grants intermediaries safe harbour provided they act as mere conduits, not interfering with the transmission of content. There exists ambiguity over whether content moderation and curation activities would cause intermediaries to violate Section 79(2) and lose safe harbour. The Intermediary Guidelines 2021 have partially remedied this ambiguity by expressly stating that voluntary content moderation will not result in an intermediary ‘interfering’ with the transmission under Section 79(2). However, ultimately amendments to the IT Act are required to provide regulatory certainty.

Intermediary status and immunity on a case-by-case basis: An entity’s classification as an intermediary is not a status that applies across all its operations (like a ‘company’ or a ‘partnership’), but rather the function it is performing vis-à-vis the specific electronic content it is sued in connection with. Courts should determine whether an entity is an ‘intermediary’ and whether it complied with the conditions of Section 79 in relation to the content it is being sued for. Consistently making this determination at a preliminary stage of litigation would greatly further the efficacy of Section 79’s safe harbour approach.

Concerns over GACs: While the October 2022 Amendment stipulates that two members of every GAC shall be independent, no detail is provided as to how such independence shall be secured (e.g., security of tenure and salary, oath of office, minimum judicial qualifications etc.). Such independence is vital as GAC members are appointed by the Union Government but the Union Government or its functionaries or instrumentalities may also be parties before a GAC. Further, given that the GACs are authorities ‘under the control of the Government of India’, they have an obligation to abide by the principles of natural justice, due process, and comply with the Fundamental Rights set out in the Constitution. If a GAC directs the removal of content beyond the scope of Article 19(2) of the Constitution, questions of an impermissible restriction on free expression may be raised.

Actual knowledge in 2022: The October 2022 Amendment requires intermediaries to make reasonable efforts to “cause” their users not to upload certain categories of content and ‘act on’ user complaints against content within seventy-two hours. Requiring intermediaries to remove content at the risk of losing safe harbour in circumstances other than the receipt of a court or government order prima facie violates the decision of Shreya Singhal. Further, India’s approach to notice and takedown continues to lack a system for reinstatement of content.  

Uncertainty over government blocking power: Section 69A of the IT Act expressly grants the Union Government power to block content, subject to a hearing by the originator (uploader) or intermediary. However, Section 79(3)(b) of the IT Act may also be utilised to require intermediaries to take down content absent some of the safeguards provided in Section 69A. The fact that the Government has relied on both provisions in the past and that it does not voluntarily disclose blocking orders makes a robust legal analysis of the blocking power challenging.

Hearing originators when blocking: The decision in Shreya Singhal and the requirements of due process support the understanding that the originator must be notified and granted a hearing under the IT Blocking Rules prior to their content being restricted under Section 69A. However, evidence suggests that the government regularly does not provide originators with hearings, even where the originator is known to the government. Instead, the government directly communicates with intermediaries away from the public eye, raising rule of law concerns.

Issues with first originators: Both the methods proposed for ‘tracing first originators’ (hashing unique messages and affixing encrypted originator information) are easily circumvented, require significant technical changes to the architecture of messaging services, offer limited investigatory or evidentiary value, and will likely undermine the privacy and security of all users to catch a few bad actors. Given these considerations, it is unlikely that such a measure would satisfy the proportionality test laid out by current Supreme Court doctrine.

Broad and inconsistent injunctions: An analysis of injunctions against online content reveals that the contents of court orders are often sweeping, imposing vague compliance burdens on intermediaries. When issuing injunctions against online content, courts should limit blocking or removals to specific URLs. Further courts should be cognisant of the fact that intermediaries have themselves not committed any wrongdoing, and the effect of an injunction should be seen as meaningfully dissuading users from accessing content rather than an absolute prohibition.

This report was made possible by the generous support we received from National Law University Delhi. CCG would like to thank our Faculty Advisor Dr. Daniel Mathew for his continuous direction and mentorship. This report would not be possible without the support provided by the Friedrich Naumann Foundation for Freedom, South Asia. We are grateful for comments received from the Data Governance Network and its reviewers. CCG would also like to thank Faiza Rahman and Shashank Mohan for their review and comments, and Jhalak M. Kakkar and Smitha Krishna Prasad for facilitating the report. We thank Oshika Nayak of National Law University Delhi for providing invaluable research assistance for this report. Lastly, we would also like to thank all members of CCG for the many ways in which they supported the report, in particular, the ever-present and ever-patient Suman Negi and Preeti Bhandari for the unending support for all the work we do.

To B2B or Not: Brief on E-Commerce and FDI Policy in India

By Madhulika Srikumar

Justice Rajiv Sahai Endlaw when hearing a petition in the Delhi High Court on the 23^rd of September this year had this to say about ecommerce, “Prima facie, the Union of India/State Governments cannot, on the one hand, for the purpose of tax, treat such sales as retail and on the other hand, for the purposes of investment, not treat the same as retail sale”.  This effectively sums up the confusion around ecommerce and Foreign Direct Investment (FDI) policy in India. Whether ecommerce should be considered as B2B (business to business) or B2C (business to consumer) under the FDI Policy is the question.

The above petition was filed by the Retailers Association of India (RAI) and the All India Footwear Manufacturers and Retailers Association (AIFMRA) seeking clarity on FDI in e-commerce, arguing that ecommerce companies have been acting like retailers which is in violation of the current FDI norms. In the beginning of this month, the Confederation of All India Traders (CAIT) had also raised similar objections in a complaint sent to the Secretary of Department of Industrial Policy & Promotion (DIPP) at the Ministry of Commerce and Industry. The letter in particular singled out Flipkart, Amazon and Snapdeal for flouting FDI regulations when offering huge discounts during the festive season sales. The commerce ministry in turn has requested the Enforcement Directorate (ED) and RBI to look into these companies and examine if they are indeed engaging in retailing activity.

This is not the first time that these ecommerce companies have been pulled up by the authorities. A similar probe was said to have been carried out by the ED placing Flipkart under the scanner back in late 2012. None of them to date have been found to be violating the FDI Policy to date. This could change with the Delhi High Court issuing a notice in the above case to the government (the matter is said to be heard by the High Court sometime soon) directing them to file their affidavit on the matter.

At this point there is no doubt about the increasing importance that ecommerce is going to play in India’s economy, with the industry said to cross the $100-billion mark over the next five years according to an Assocham-Pricewaterhouse Coopers study. Meanwhile the regulatory landscape for ecommerce looks quite shaky and that includes the FDI regulations.

Regulatory Framework for FDI

FDI in India is regulated under the Foreign Exchange Management Act, 1999 (FEMA). The Ministry of Commerce comes out with the investment policy and the amendments in consultation with the DIPP. This is then notified by the Reserve Bank of India (RBI) through press notes and circulars. It is the Directorate of Enforcement (ED) that carries out investigations when it comes to possible violations of FDI Policy.  Penalty under the Act can go up to thrice the sum[1] involved for the guilty entity resulting in the possibility of Flipkart facing a whopping 1400 crore penalty had the earlier ED probe in 2014 found them guilty.  This kind of penalty can reduce a company to bankruptcy quite easily.

This is what Amazon’s options look like currently

Now India‘s FDI Policy (Consolidated FDI Policy, 2015) permits FDI up to 100% in e-commerce activities.[2] This however applies only to B2B ecommerce (under the Automatic Route) and not to online retailers/e-retailers also known as B2C ecommerce[3]. B2B stands for Business to Business where the trading is between business entities such as manufacturers and wholesalers or between wholesalers and retailers. B2C on the other hand stands for Business to Consumers where online businesses sell directly to the customers.

In September 2012, the Indian government allowed 51% FDI in multi-brand retail, subject to certain conditions. Whereas retail trading in ecommerce for companies with FDI (single[4] or multi brand[5]) is not allowed under the FDI Policy. The 51% FDI limit in multi-brand retail is subject to some conditions where the states take the final call, which might be difficult to translate into ecommerce which has no geographical boundaries.

All this is not to say that Amazon and the rest haven’t found a way out under the existing FDI framework to attract foreign investment. Amazon follows what is known as the marketplace model that is compliant with the FDI Policy of India. A marketplace model in ecommerce, as a Snapdeal spokesperson explained, “(Snapdeal) is a technology platform that connects sellers with buyers to facilitate transactions”. In the marketplace model, the ecommerce company only engages in the activity of buying and selling which is considered B2B and not retail trading under the Policy (see footnote n.3). Therefore under this model the ecommerce company does not carry out any retail transactions and does not directly sell anything to the customer. Instead the ecommerce platform earns commission from sellers of goods/services for their services. This move to operate as a marketplace enables Amazon[6]and Flipkart which are both majority-owned by foreign investors to still function in the Indian market without running afoul of the FDI Policy.

What Amazon can’t do is run an inventory based model. In this model, ownership of goods and services and the marketplace vests with the same entity. As a comparison India is said to be the only one among a list of developed and developing economies that does not allow FDI in inventory based ecommerce. Keep in mind that in the marketplace model, ownership of the inventory vests with the enterprises who are the ultimate sellers of the goods/services.

Does Ecommerce fall under B2B or B2C?

This section looks at what CAIT, AIFMRA and other brick and mortar associations are complaining about when it comes to e-commerce companies like Amazon, Flipkart among others. Their primary concern is that e-commerce companies are acting like B2C retailers while enjoying foreign investment that is only legal for B2B enterprises.

One of the possible FDI Models as laid out in the paper by Arkay & Arkay and Medianama

The CAIT has pointed out that the intensive advertising campaigns carried by the marketplaces should not be considered B2B activity as these initiatives are directed towards the consumers to promote their sales.  Further, the CAIT questions how these ecommerce platforms offer such massive discounts when they have no inventory at their disposal. AIFRMA in their Delhi HC petition argued that marketplaces in ecommerce in India operate as retailers since the payment, delivery, returns and refund are all handled by these companies.

The other accusation made against these companies is that they do in fact have inventories and do not perform as mere marketplaces. In September 2014, the ED was directed to look into Amazon and examine if they are making the sales instead of the vendors. The Karnataka Government also had suspicions about the “fulfillment centres” belonging to Amazon alleging that Amazon “owned” the products in such centres.  Interestingly when Flipkart was incorporated in 2008, it started out as an inventory-based B2C model that had to be changed to the B2B marketplace model after raising foreign funds in 2012.  The change however was made only in April 2013 leading to an investigation by the ED on Flipkart functioning as a B2C with FDI during 2012-2013. Again, none of these ecommerce companies have ever been found to be violating FDI Policy.

While the marketplace model is practiced by Amazon, Flipkart and others, there are also other structures through which foreign investors can enter the Indian ecommerce market legally.  One of the structures for instance can be found in the image above.  The Delhi HC petition also addressed concerns that ecommerce companies have been creating complex business structures to evade the law. One such case study is that of Amazon Asia’s stake in Cloudtail (see image below), one of the largest sellers on Amazon India. Amazon through Cloudtail can therefore dictate pricing among other things and in effect acts like a retailer. This of course pales in comparison when it comes to Flipkart and their dominant seller WS Retail that accounts for 85% of the total products sold on the portal over the past three years.  Flipkart does have operational control over WS Retail even now. This, after the famous corporate restructuring that Flipkart carried out in 2012 which included the divesting of WS Retail.  Ecommerce companies are doing all this to make sure that the companies are an arm’s length from directly selling to the consumers.

Amazon being clever: image from ISID paper by Rahul Nath Choudhury

Way Forward

Which brings us to the next question of whether companies should be penalized for creating such business structures or is it time to allow for FDI in B2C ecommerce instead? The DIPP considered the pros and cons of doing so in their Discussion Paper that came out in January 2014 and sought out public opinion. The government has held discussions with several stakeholders including ecommerce companies and bodies such as FICCI, NASSCOM and CII this year. There have also been several reports of foreign retailers like Amazon and Ebay lobbying with the Indian government to permit FDI in online retail in India. It is clear that there are valid arguments both for allowing FDI in e-retail and not. It is crucial however that the government decides on this soon to ensure that the current FDI framework is not manipulated and its purpose defeated. It is also worth exploring how the government can impose conditions (and what conditions) on companies with FDI in online retail, if it were to be allowed.

Fundamentally more clarity is required with respect to the definition of the term marketplace and the difference between retail and wholesale trading[7] on online platforms. With FDI not being the only regulatory concern for ecommerce in India, seeing as concerns regarding taxation of these goods/services and anti-competitive behavior by these companies have also been brought out, maybe it is not a bad idea to go back to the drawing board to figure out the definition of ecommerce in India. A better understanding of what ecommerce in India entails will help characterize it either as B2B or online retail which in turn can bring the “violations of FDI Policy” debate to an end.  Answers are expected soon from the government after the commerce and industry ministry received responses from various states on this matter a few days ago. The Vidhi Centre for Legal Policy in a report has proposed for a law to be passed by the Parliament under Entry 42 of the Union List[8] to govern goods/services of online marketplaces and those sold directly on the Internet. Moving forward a uniform policy on ecommerce across states will provide much-needed clarity albeit it has to be done in the near future.

[1] As per S.13 of FEMA, 1999, penalty imposed can be thrice the sum involved in the contravention where such amount is quantifiable.

[2] DIPP Press Note No. 8 of 2015, Annexure 1, paragraph 6.2.16.2.1 allows 100% FDI in B2B Ecommerce activities.

[3] Under paragraph 6.2.16.2.1 of the Consolidated FDI Policy of 2015 (effective from May 12, 2015), 100% FDI is permitted only in B2B ecommerce activities, “E-commerce activities refer to the activity of buying and selling by a company through the e-commerce platform. Such companies would engage only in Business to Business (B2B) e-commerce and not in retail trading, inter-alia implying that existing restrictions on FDI in domestic trading would be applicable to ecommerce as well.”

[4] Under paragraph 6.2.16.3 of the Consolidated FDI Policy of 2015, “Retail trading, in any form, by means of e-commerce, would not be permissible, for companies with FDI, engaged in the activity of single-brand retail trading.”

[5]  Paragraph 6.2.16.4 of the Policy provides, “Retail trading, in any form, by means of e-commerce, would not be permissible, for companies with FDI, engaged in the activity of multi-brand retail trading.”

[6] Amazon India (Amazon Sellers Services Private Limited) for instance was set up as a wholly owned subsidiary by Amazon Asia-Pacific Resources Pvt. Ltd., Singapore in 2012, incorporated in Bangalore. They had entered the Indian ecommerce market before through the acquisition of Junglee.com way back in 1998 which came into operation in 2012. Junglee.com, a price comparison website, was also set up under the marketplace model.

[7] Currently under paragraph 6.2.16 of the Consolidated FDI Policy of 2015, B2B ecommerce is considered as wholesale trading.

[8]  Entry 42 of the Union List covers inter-state trade and commerce.

(Madhulika Srikumar is a Research Assistant at CCG and a final year student at GNLU)

Information Gatekeepers and Article 19(1)(a) of the Indian Constitution

I have put a draft of my paper titled ‘Gatekeeper Liability and Article 19(1)(a) of the Indian Constitution on SSRN. You can read it here. It will eventually be published in the NUJS Law Review.

Alternatively, this essay (written for a UPenn/ CIS/ ORF publication) based on the paper sets out my argument briefly.

Introduction

The press was once the most important medium of mass communication. Indira Gandhi understood this well and used the gatekeeping function of large media houses to prevent citizens from accessing critical information. The press’s function as an information gatekeeper is protected by jurisprudence, but this protection is articulated as ‘freedom of the press’, making it a medium-specific protection. As the Internet increasingly replaces the press as the most important source of information for citizens, structural protections need to extend online. The online intermediary may be the new avatar of the information gatekeeper, third parties who perform an essential function in transmitting information from speakers to audiences – they are potential choke points that the state can use to cut off flows of information.

Aside from the press freedom norms, much of our freedom of expression jurisprudence deals with the state’s relationship with the speaker. The contours of our freedom of expression rights have formed in this context. It is relatively easy for the judiciary to grasp how statutory provisions like section 66A of the Information Technology Act impact freedom of expression. Here the law targets the speaker directly and any unjust application or chilling effect is more visible. It is also more likely to be resisted by the target of regulation, since the speaker is always interested in her own right to speak.

Indirect regulation of speech is quite different. The law is aimed at information gatekeepers, who may choose not to publicise censorship and who may not be as interested in protected the speech as the original speaker. Scholars have described these gatekeepers as the ‘weakest link’, through which speech is most vulnerable to state excesses.

Information gatekeepers and Indian law

It is common enough for states to use ‘middle-men’ to enforce change in behaviour when it is difficult to control the primary offender’s conduct directly. For example, since it is difficult to directly compel minors to avoid drinking, the law targets alcohol-sellers, leveraging their gatekeeping function to cut off the supply of alcohol to minors.

Information gatekeepers were used to regulate the flow of information even in the pre-digital world. Publishers and booksellers were held liable for circulating banned publications in many countries including India. India has a particularly pernicious rule criminalizing the circulation of obscene content. This comes from the Supreme Court’s judgment in Ranjit Udeshi v. State of Maharashtra, that is well known for its interpretation of obscenity law in the context of D.H. Lawrence’s ‘Lady Chatterley’s Lover’. The other critical element of this judgment received almost no attention – the liability of a bookseller for the circulation of obscene content.

D.H. Lawrence was never prosecuted in India for his book. The ‘Lady Chatterley’s Lover’ case in the Supreme Court was about the liability of the owners of Happy Book Stall, a bookshop at which ‘Lady Chatterley’s Lover’ was sold. The Supreme Court said the booksellers were liable for circulation of the obscene content even if they argued that they were unaware that a book contained such content. Consider what this means: booksellers cannot plead ignorance of obscene content within any of the books they sell, and will be liable nonetheless. The state only has to prove that the booksellers circulated obscene content, and not that they did so knowingly. It is lucky that this part of the Supreme Court judgment went largely unnoticed since it could easily be used by the intolerant file criminal complaints that shut down large bookstores all over the country – all they need to do is look for a few books that the law would categorise as obscene. Booksellers would then have to scour every page and paragraph of each book they sell to weed it out content that might get them arrested – this would make it very difficult to do business.

Online intermediaries as information gatekeepers

Intermediary liability first received attention in India after the infamous ‘DPS-MMS’ explicit video, featuring two minors, ended up being sold on Baazee.com. The Managing Director of the company that owned the website was arrested. The fact that he had no knowledge that this content was shared on the website was irrelevant thanks to the Supreme Court’s ‘Lady Chatterley’s Lover’ verdict. This situation made it clear that if the law applicable to bookshops continued to apply to online intermediaries, online platforms would not be able to function in India. A platform like Facebook or Youtube hosts too much user content to be able to sift through it and proactively filter out everything obscene.

Fortunately, the amendment of the Information Technology Act (IT Act) gave Internet intermediaries immunity from this liability for third party content. The immunity was conditional. Intermediaries that edit or otherwise have knowledge of the content that they transmit are not immune from liability. To remain immune from liability, intermediaries must comply with certain legal obligations to take down content or block it in response to government orders or court orders. These obligations also leverage the gate-keeping function of these intermediaries to regulate online content – internet service providers and online platforms can ensure that certain kinds of content are inaccessible in India.

Why gatekeepers matter

Although information intermediaries existed in the pre-internet information ecosystem, their role is critical in the context of online content – several intermediaries mediate our access to online content. Some of these, like the gateways through which the Indian network connects to the global network, are located in India and are easy for the government to control since they are subject to onerous licenses and are few enough in number for the state to be able to control all of them successfully. Other intermediaries like Facebook or Google, are online platforms, and most of these have offices outside Indian jurisdiction.

Discussions about freedom of expression that focus on the direct relationship between the state and the speaker are not helpful in this context. This kind of reasoning tends to ignore the collateral effects of certain kinds of regulation of speech – the ‘Lady Chatterley’s Lover’ case case is a classic illustration of this with its tremendous impact on the liability of all booksellers and later on Baazee.com and other web based platforms.

As the new media make gatekeepers and intermediaries more critical to the controlling the flow of information, we need to focus on other dimensions of freedom of expression if we are ensure that effective safeguards are put in place to protect speech. Our jurisprudence on freedom of the press offers some degree of protection to newspapers so that regulation of their business structure cannot be used to influence their content, but this form of gatekeeper protection is limited to the press. There are information gatekeepers other than the press in India, and it is time that we think carefully about protecting the information ecosystem. Free speech principles need to accommodate themselves to a media ecosystem that is increasingly dependent on information gatekeepers.

Freedom of expression and access to information

It is time that our jurisprudence started focusing more on citizens’ rights to access information. Although this right that has been recognized in India, it needs to be outlined in more detail. In the well-known judgment in Shreya Singhal v. Union of India, which struck down section 66A of the Information Technology Act, the Supreme Court failed to deal with intermediary liability adequately because it did not use the lens of access to information and gatekeeper liability. Using traditional jurisprudence that focuses on the direct impact of regulation of speech, the court gave content-creators the right to a hearing and a right to appeal blocks and removals of their content wherever possible. However, it completely disregarded the rights of citizens to access online content.

The content blocking system in India makes all government blocking orders confidential. This means that when an intermediary is required to block content under the IT Act, users might imagine that the decision was a private decision made by the intermediary. Since the intermediary is unlikely to be willing to spend resources battling for the various kinds of content it hosts, any blocking process that counts on the intermediary to offer up sufficient resistance to unconstitutional blocking orders errs egregiously. The law must offer those who are actually affected – the publishers and the readers of the information – a chance to fight for content that they have the right to circulate and access. Of these, the publishers of information do have some right to make their case before the government committee making the blocking decision thanks to the Supreme Court’s decision in Shreya Singhal v. Union of India. But this judgment does nothing for citizens who could lose access to a wealth of information if the government might unreasonably blocks content created by someone in another country. The content publisher would not be in a position to defend its content in India, and citizens have not been given any avenue to defend their rights to view the content before the government committee making the decision.

The focus on access to information has been discussed many scholars, from Alexander Meiklejohn onwards. Amartya Sen has written about the salience of public discourse in a democracy. Robert Post and Jack Balkin have articulated in the detail the importance of focusing on the free flow of information or access to information, rather than on the right of individual speakers. The right we refer to as ‘freedom of expression’ is about much more than the freedom to say what one pleases. It is the foundational principle from which our rules about free flow of information have been built.

Conclusion

Section 66A was an example of what Jack Balkin characterises as ‘old school’ regulation of speech. This consists of criminal penalties, injunction and damages aimed directly at the speaker or publisher. The Supreme Court’s treatment of section 66A reflects its comfort with this form of regulation and its implications for freedom of expression.

Intermediary liability, and the use of Internet gatekeepers to control the flow of online information follows a different system: it uses control over the infrastructure or platforms of speech to exercise control over speech. Jack Balkin characterizes this as ‘new school’ regulation. Through ‘collateral censorship’, a third party is made to block or remove a primary speaker or publisher’s speech. For example, a government order or a court order requiring that certain online content be blocked, does this by requiring and internet service provider or online platform to censor the information. New school regulation works necessitates co-operation of these third party intermediaries like internet service providers and online platforms with the government, and this can be achieved by compelling them to co-operate through the law or by using softer means to co-opt them.

New school regulation must be assessed in terms of the collateral harm that it causes. It is not a question of whether online pornography should be blocked or not anymore. It is a question of whether the process used to get intermediaries to block the pornography can be abused to block constitutionally protected speech. We have already recognized the collateral effects of structural regulation in the context of press freedom, and the Supreme Court has barred certain kinds of structural interference with the media that might impact their reporting. It is time to create a version of this principle for online speech, and to think in terms of access and free flow of information.

References

Ranjit Udeshi v. State of Maharashtra

Shreya Singhal v. Union of India

Secretary, Ministry of Information & Broadcasting, Govt. of India v. Cricket Association of Bengal, (1995) 2 SCC 161.

Sakal Papers v Union of India

Amartya Sen, Idea of Justice, 321-337 (2009)

Chinmayi Arun, Gatekeeper Liability and Article 19(1)(a) of the Constitution of India, NUJS Law Review [forthcoming-2015]

Jack Balkin, ‘Old School/ New-School Speech Regulation’, 127 Harv. L. Rev. 2296

Jack Balkin, ‘The first amendment is an information policy’, Hofstra Law Review 41 (2013)

Robert Post, Participatory Democracy and Free Speech, 97 Virginia L. Rev. 3 (2011).

Seth Kreimer, Censorship by Proxy: the First Amendment, Internet Intermediaries, and the Problem of the Weakest Link, Penn Law: Legal Scholarship Repository (2006)

Panel discussion on Intermediary Liability & Freedom of Expression: Report

(L-R: Professor Ranbir Singh, Mr. Siddharth Varadarajan, Mr. Jermyn Brooks, Mr. Shyam Divan)

(Report by Divya Srinivasan and Manish)

The Centre for Communication Governance at National Law University Delhi in association with the Global Network Initiative, Washington D.C., organised a panel discussion on Intermediary Liability & Freedom of Expression at the India International Centre Annexe, New Delhi on 26 March, 2014. The panel consisted of three experts: Shyam Divan, Senior Advocate, Supreme Court of India; Siddharth Varadarajan, Journalist and Senior Fellow, Centre for Public Affairs and Critical Theory, New Delhi; and Jermyn Brooks,Independent Chair, Global Network Initiative, Washington D.C.

The objective of the panel was to focus on the Indian legal framework governing Internet platforms, and explore questions related to the liability of Internet intermediaries for online speech and the balance that should be involved in regulations affecting user-generated content, in the context of the civil liberties, key to democracy, in particular free speech and privacy. The discussion was aimed at drawing connections between this ostensibly Internet-related issue and the traditional media, to highlight recurring issues and useful perspectives.

The Vice-Chancellor of National Law University Delhi, Professor Ranbir Singh, delivered the opening remarks, beginning with a brief introduction to the University and its commitment to research in this field. He then laid out the context of the discussion which was framed in anticipation of the Supreme Court of India taking a decision about online intermediary liability in the near future. This decision will have significant consequences for the rights of Indian citizens to freedom of expression and their right to receive information through the Internet. He provided an overview of the ongoing petitions before the Supreme Court, particularly those filed by MouthShut.com, Rajeev Chandrasekhar and People’s Union for Civil Liberties, challenging the Information Technology (Intermediaries Guidelines) Rules 2011, and the Procedure and Safeguards for Blocking for Access of Information by the Public Rules 2009, as being ultra vires both the Constitution as well as the Information Technology Act, 2000 itself.

Professor Singh explained the safe harbour framework for intermediaries in Section 79 of the Information Technology Act, which recognises that while intermediaries need protection from any obligation to actively monitor content, their co-operation is also necessary for the removal of illegal content. He outlined the ‘due diligence’ obligations of intermediaries that the safe harbour protection is subject to, the ambiguity surrounding what is meant by ‘due diligence’, and highlighted the problems caused by the 2011 Rules.  Instead of clarifying what is meant by ‘due diligence’, the Rules create a notice and takedown system, forcing intermediaries to be excessively cautious such that they prefer removing content to challenging a takedown notice [See Pritika Rai Advani’s ‘Intermediary Liability in India’ for a detailed discussion on the notice and takedown procedure]. Professor Singh concluded by emphasising the disastrous consequences this would have for free speech and the critical role of the Supreme Court in protecting this crucial fundamental right.

Mr. Shyam Divan provided an overview of the constitutional scheme governing freedom of expression in India, and the exhaustive list of grounds mentioned in Article 19(2) under which Parliament can impose reasonable restrictions on the freedom of speech and expression. He listed the four options available to the Supreme Court while adjudicating the cases that Professor Ranbir Singh had discussed: (i) striking down the entire law as unconstitutional; (ii) giving time to the Government to amend the provision to bring it in line with the Constitution; (iii) striking down only the offending provision in the law, and not the whole statute; (iv) dismissing the petition if the law was found to be valid. He mentioned that in the present litigation, the Rules would have to survive two challenges: firstly, that of validity under the Information Technology Act, (i.e.) the Rules were consistent with and within the scope of the Act; and secondly, that of validity under Articles 19(1) (a) and 14 of the Constitution.

Mr. Divan then discussed the constitutional infirmities in the 2011 Rules in detail. He pointed out the absence of legal certainty and the use of language, such as “grossly harmful, harassing or otherwise unlawful in any other manner” which has resulted in a vague law. He also made reference to a Parliamentary committee report which made similar observations regarding the vagueness of the Rules and recommended that these terms be defined. Moreover, the Rules seek to regulate speech on grounds that are far beyond the scope of the restrictions contemplated by Article 19(2) of the Constitution, such as speech that “deceives the addressee”or “impersonates another person”. Mr. Divan also pointed out that the excessively short time frame of 36 hours for taking down content results in an indirect form of censorship by the intermediaries themselves, who will opt for the easy way out, and take down the content in almost all cases. He concluded by suggesting that despite the Supreme Court’s largely satisfactory record at protecting freedom of speech, this problem is unlikely to attain final resolution with a judgment by the Supreme Court as the issue of intermediary liability is one of transnational importance, necessitating the development of an international convention or protocol dealing with issues of intermediary liability.

Mr. Siddharth Varadarajan drew upon his experience as a journalist and editor of a newspaper and a website, highlighting the paradox in India when it comes to the Executive’s approach in treating different forms of the media in different ways. He pointed out that the same police authorities, who on more than one occasion had failed to take any action against people making hate speeches in front of crowds and inciting violence, have become excessively sensitive with regard to online speech and are arresting people for merely “liking” comments made on Facebook. He also raised concerns about increasing threats to freedom of expression in India, alluding to Penguin’s decision to pulp Wendy Doniger’s book in the face of protests from fringe groups.

Mr. Varadarajan argued that speech on the Internet is inexplicably being held to a higher standard in India than speech in conventional media, and that in framing the 2011 Rules, India has moved away from international best practices. He observed that these Rules placed a lot of pressure on intermediaries, and in a situation where even Penguin, which despite being the largest publishing house in the country, did not contest a case even in the lower Court, one could not expect intermediaries to stick their necks out to protect free speech. He expressed hope that the Supreme Court will strike down the Rules as unconstitutional, suggesting that if the restrictions on Internet speech are allowed to stand, there is every danger of them being extended to speech in the traditional media as well.

Mr. Jermyn Brooks wrapped up the panel by providing an overview of Global Network Initiative’s activities and explaining the challenges in law reform relating to free expression on the Internet, given the lag between technology and the law. He opined that the 2011 Rules are not just constitutionally unsustainable in India, but also fall foul of international standards. He also pointed out that the Rules are affecting the emancipating, wealth-creating nature of the Internet and emphasised the need to focus on the adverse economic impacts of having these restrictions in place. He suggested that this could be used as a means to convince politicians to reform the law, but acknowledged that in India, since one did not expect politicians to grapple with reforms in the law on intermediary liability, the only remedy lay in challenging the validity of the Rules in Court.

The panel was followed by an open discussion where the panellists responded to queries from the audience and members of the audience who were experts in the field offered their comments on the panel discussion.