The number of active internet users in India has increased by leaps and bounds to 800 million compared to 5.5 million users in the year 2000. The year 2000 was a revolutionary year of the internet in India not only because it saw the advent of cable internet and launch of sites like Yahoo and eBay, but also because of the enactment of the Information Technology Act, 2000.
The IT Act was enacted keeping in view the country's digital landscape and technologies as it existed at that point in time, to provide a legal framework for the promotion of e-commerce and e-transactions in the country.
Need for Digital India Act
Technology is operating under outdated statutes which have not yet caught up to the latest advancements. The IT Act is one such law which had been long criticised for not keeping up with new technologies like artificial intelligence (AI) and multiple types of intermediaries. No doubt, since the time of its enactment in 2000, there have been numerous amendments to the IT Act with respect to regulation of new-age technologies and the paradigm shift with respect to e-commerce business. These include the amendments made in the year 2008 to include a definition for the term "intermediary" and the insertion of Section 79 into the IT Act. However, it still seems to be obsolete and inadequate to handle technology-related matters.
The Ministry of Electronics and Information Technology (MEITY), after carefully examining the existing lacunae and inadequacies in the IT Act, has officially announced that the two-decade-old legislation will be finally replaced with a new Digital India Act (DIA). Though the draft of the DIA is yet to be circulated for public comments, it is understood that MEITY is conducting rounds of consultations and soliciting feedback from various stakeholders. The DIA will not only be reflective of the recent developments in the digital ecosystem, but it is also expected to address the asymmetry between digital news publishers and big tech platforms in the revenue-sharing model.
Apart from including regulations to address AI-generated deep fake videos, electronic contracts and digital signatures, DIA is also expected to address the liability of intermediaries. Recent instances of increase in the use of social media platforms has led to issues related to misinformation, hate speech, cyberbullying. and defamation. This has forced the MEITY to establish mechanisms for content takedown, and hold intermediaries accountable for illegal or harmful content.
Regulatory framework of intermediaries
India’s intermediary liability regime flows from Section 79 of the IT Act. This provision accords safe harbour to intermediaries and exempts them from any liability for third-party content on their service, provided they are meeting the requirements to avail such exemptions as provided under Section 79(2) and 79(3) of the IT Act. Under Section 79(2)(c) of the IT Act, an intermediary is expected to observe due diligence and any other guidelines prescribed by the Central government while discharging its duties under the IT Act to claim safe harbour. However, such protection lapses if despite receiving the “actual knowledge” of any information or data connected to the computer resource of the intermediary being used to commit an unlawful act, or on being notified of such content, it fails to remove or disable access to it.
The true ambit of the safe harbour principle has been etched out through a series of judgments including Shreya Singhal v. Union of India, which held that the ‘knowledge’ of content to be taken down must only be construed as being brought to the intermediary through the medium of a court order. Recently, the High Court of Delhi also extended safe harbour exemptions available to intermediaries in criminal proceedings in the case of Flipkart Internet Private Limited v. State of NCT of Delhi.
By way of the DIA, the MEITY is also planning to reconsider the safe harbour exemptions which are currently available to all intermediaries including e-commerce and AI-based platforms, irrespective of their nature and functions. The Central government is of the opinion that social media intermediaries should not enjoy a free pass in the garb of 'safe harbour' and it cannot be an excuse to let any objectionable or controversial posts remain on it.
Safe harbour has often led to a lack of content moderation, inadequate fact-checking and content violations on platforms, and thus default exemption to intermediaries is likely to be provided only on a “case-to-case basis” upon the enactment of the DIA. If reports are to be believed, it would be the Central government which would be notifying which intermediary shall be eligible to claim safe harbour protection.
Safe harbour or no harbour?
Intermediaries in India are always looked at from a social media lens and they are also regulated accordingly. However, all intermediaries cannot be controlled and regulated in the same way. Therefore, removing the default exemption available to intermediaries might prove to be a harsh step, especially for e-commerce-based intermediaries. This is simply because the Central government needs to understand that certain intermediaries simply cannot function without availing safe harbour protection.
Intermediaries in India are anyway abiding by draconian and tight government regulations like the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 (IT Rules 2021) which places more onerous obligations on them to avoid liability for third party content on their platform. The proposed changes go beyond regulating intermediaries and grant unbridled powers to the government and its agencies to control intermediaries. Such an approach giving the authority to the government with no judicial oversight will open the door for those authorities to harass such intermediaries who might be implicated unnecessarily in any random proceedings for any third-party information, data, or communication link made available or hosted by them.
Despite the existence of Section 79 of the IT Act providing safe harbour to intermediaries, even today, prosecution agencies fail to follow the same, resulting in constant harassment of the social media intermediaries. FIRs have been lodged against e-commerce-based intermediaries for allegedly selling the fake or counterfeit products merely because the same was put for sale by third-party sellers on their platform. Now, if the intermediaries are further obligated to comply with the proposed changes and the safe harbour protection is taken away, it will lead to a situation where the intermediaries could be named as a party or respondent in an FIR or a criminal complaint every time an offensive post or tweet is made by any individual or any fake or counterfeit products are listed for sale on their platform.
The fact that an intermediary ought to be protected because of the safe harbour protection is still not clear to the prosecution agencies and thus changing the law could prove dangerous. Intermediaries will have to specifically apply for this exemption every time a case is registered against them and present their case leading to a full-fledged trial, which will make it difficult for them to function in the normal course.
In effect, the proposed changes might also spur censorship by intermediaries, especially the social media intermediaries. Further, to avoid any adverse orders against them and shield themselves from liability and criminal prosecution, the intermediaries will have no option but to comply with the proposed changes. Compliance with the proposed changes will lead to a situation where intermediaries will start monitoring content on their platforms and filter out content, going against their basic tenets. Therefore, clubbing e-commerce intermediaries with social media intermediaries will be an unfair and irrational classification as far as the removal of safe harbour is concerned.
Further, the proposed changes with respect to removing the blanket exemption available to intermediaries will impact certain small-scale intermediaries who will have to incur heavy costs in deploying AI tools to control and monitor content on their platforms to avoid any legal responsibility for any harmful, controversial, or objectionable content being shared on their platforms.
By way of the DIA, the MEITY might even consider fixing the gaps in the implementation of the IT Rules 2021, as the Central government in its new term is expected to carry forward key IT policies that it enacted or proposed in its previous term. MEITY might incorporate amendments with respect to due diligence to be observed by intermediaries brought in by way of the IT Rules 2021. These include enabling the identification of the first originators of information on end-to-end encrypted messaging services within the ambit of the parent statute itself, rather than regulating through subordinate legislation. The main point of contention in the petitions challenging the IT Rules 2021 was that the new rules consists of provisions which travel beyond the parent statute and thus are ultra vires to the IT Act.
Ankit Tripathi is lawyer who practices before the Supreme Court of India, the Delhi High Court, and various forums across Delhi.