1. Legal Framework Governing Intermediary Liability

(a) Section 79 of IT Act, 2000 – “Safe Harbour Protection”

Section 79 provides a safe harbour immunity to intermediaries, meaning they are not liable for third-party content if:

• They only provide access to communication systems, and
• They do not:
  • Initiate the transmission,
  • Select the receiver, or
  • Modify the information.

However, immunity applies only if:

• The intermediary observes due diligence, and
• Removes unlawful content upon receiving actual knowledge or court/government order.

(b) Intermediary Guidelines Rules, 2021

These rules impose additional obligations:

• Appointment of grievance officers
• Removal of unlawful content within 36 hours of order
• Due diligence in monitoring illegal listings (especially in e-commerce)
• Mandatory traceability for significant social media intermediaries (in some cases)

(c) E-Commerce Rules under Consumer Protection Act, 2019

For e-commerce entities:

• No manipulation of search results
• No false product listings
• Clear disclosure of sellers
• Responsibility for counterfeit goods if due diligence is lacking

2. Types of Intermediary Liability

(A) Passive Intermediary Liability (Protected)

• Platforms acting neutrally (hosting content only)
• Eligible for safe harbour protection

(B) Active Intermediary Liability (Not Protected)

• Platforms that:
  • Modify content
  • Curate illegal listings
  • Exercise editorial control
• Lose safe harbour protection

3. Landmark Case Laws on Intermediary Liability in India

1. Shreya Singhal v. Union of India (2015)

Facts:

Challenge to Section 66A and intermediary liability provisions.

Issue:

Whether intermediaries should remove content on mere “knowledge” or only after court order.

Judgment:

• Supreme Court struck down Section 66A.
• Interpreted “actual knowledge” under Section 79(3)(b) narrowly.

Principle:

Intermediaries are only required to act upon:

• Court order, or
• Government notification

They are not required to proactively monitor content.

2. MySpace Inc. v. Super Cassettes Industries Ltd. (2016)

Facts:

Copyrighted music uploaded on MySpace without authorization.

Issue:

Whether MySpace was liable for user-uploaded infringing content.

Judgment:

• Delhi High Court held MySpace not liable under safe harbour if it acts upon notice.
• However, it must remove infringing content after notice.

Principle:

Intermediaries have conditional immunity, not absolute protection.

3. Kent RO Systems Ltd. v. Amit Kotak & Ors. (2017)

Facts:

Defamatory content about Kent RO products posted online.

Issue:

Liability of intermediaries hosting defamatory reviews.

Judgment:

Court held:

• Intermediaries are not required to proactively monitor content.
• But must remove content after receiving valid notice.

Principle:

Reinforces notice-and-takedown system, not proactive policing.

4. Christian Louboutin SAS v. Nakul Bajaj & Ors. (2018)

Facts:

Counterfeit luxury shoes sold on online marketplace Darveys.com.

Issue:

Whether e-commerce platform is only an intermediary or an active participant.

Judgment:

• Delhi High Court held Darveys was not a passive intermediary.
• It curated listings and exercised quality control.
• Therefore, it lost safe harbour protection.

Principle:

If an e-commerce platform:

• Curates listings, or
• Enhances product presentation,

it becomes an active participant and is liable for infringement.

5. Amazon Seller Services Pvt. Ltd. v. Amway India Enterprises (2020)

Facts:

Amway alleged sale of unauthorized products on Amazon marketplace.

Issue:

Whether Amazon is liable for third-party seller actions.

Judgment:

• Court held Amazon is an intermediary with conditional protection.
• Must ensure due diligence and comply with takedown orders.

Principle:

Marketplaces are protected only if they:

• Do not alter goods,
• Remove infringing listings when notified.

6. Swami Ramdev & Anr. v. Facebook Inc. (2019)

Facts:

Defamatory content about Baba Ramdev circulated online.

Issue:

Whether intermediaries must remove global content once ordered.

Judgment:

• Delhi High Court held intermediaries must remove content globally if ordered.
• Recognized expanding obligations of platforms.

Principle:

Intermediaries may be required to ensure effective removal beyond India in certain cases.

7. Amazon Seller Services v. Modicare Ltd. (2020)

Facts:

Allegations of unfair trade practices and unauthorized product listings.

Issue:

Extent of Amazon’s liability as marketplace operator.

Judgment:

• Court held Amazon is an intermediary but must maintain transparency.
• Cannot interfere in seller pricing or listings beyond permissible limits.

Principle:

E-commerce platforms must remain neutral facilitators, not controllers of trade.

4. Key Principles from Case Law

From judicial decisions, the following principles emerge:

1. Safe Harbour is Conditional

Intermediaries are protected only if they act neutrally and with due diligence.

2. No General Monitoring Duty

As held in Shreya Singhal, intermediaries are not required to proactively monitor content.

3. Notice-and-Takedown System

Liability arises when intermediaries fail to act after receiving:

• Court order, or
• Government directive

4. Active Role Removes Protection

If platforms:

• Curate content,
• Promote listings, or
• Exercise editorial control,

they lose immunity (Louboutin case).

5. E-Commerce Platforms Have Higher Responsibility

Under Consumer Protection (E-Commerce) Rules:

• Transparency is mandatory
• Fake or misleading listings must be prevented

5. Practical Implications for E-Commerce Platforms

To maintain safe harbour protection, platforms must:

• Maintain grievance redressal mechanisms
• Remove unlawful listings promptly
• Avoid modifying seller content
• Ensure seller verification
• Follow due diligence rules strictly

6. Conclusion

India follows a balanced intermediary liability model:

• Protecting innovation and free flow of information through safe harbour (Section 79 IT Act)
• While ensuring accountability through due diligence obligations and judicial oversight

Case law shows a clear evolution:

• From passive hosting protection → to conditional liability based on platform involvement

E-commerce platforms in India are safe only as long as they remain neutral intermediaries, act quickly on takedown requests, and avoid editorial control over third-party content.