Certificate Course on Interplay

of Technology and Law

June 23 - 25, 2023
Shashank Mishra and Mitali Daryani
Shardul Amarchand Mangaldas
 Module I
Intermediary Liability and
AR/VR, Web3
What is an Intermediary?
Intermediaries are entities that store or transmit data on behalf of other persons,
and include telecom and internet service providers, online marketplaces, search
engines, and social media sites. The Information Technology Act, 2000 defines an
intermediary as, “any person who on behalf of another person receives, stores or
transmits that record or provides any service with respect to that record and
includes telecom service providers, network service providers, internet service
providers, web-hosting service providers, search engines, online payment sites,
online-auction sites, online-market places and cyber cafes”
Different kinds of intermediaries
● telecom service providers
● network service providers
● internet service providers
● web-hosting service providers
● search engines
● online payment sites
● online auction sites
● e-commerce platforms
● social media platforms
● gaming platforms
Classification under Indian Law
‘social media intermediary’ means an intermediary which primarily or solely
enables online interaction between two or more users and allows them to create,
upload, share, disseminate, modify or access information using its services;

‘significant social media intermediary’ means a social media intermediary

having number of registered users in India above such threshold as notified by the
Central Government;

‘online gaming intermediary’ means any intermediary that enables the users of
its computer resource to access one or more online games;
Intermediary Liability and Safe Harbour
Immunity
Intermediary Liability and Global Perspective

Models of Intermediary
Liability

Broad
Lorem Ipsum
Strict Liability Safe - harbor
Immunity
Model Model
Model

Vertical Horizontal
Model Model

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World Intermediary Liability Map
The WILMap documents laws around the world that govern Internet
intermediaries and shape users’ digital rights. It provides both basic and
advanced tools to search for and visualize how legislation, decisions and public
policies are evolving globally.
Intermediary Liability Regime in India
• India follows the safe-harbour model.
• India’s safe harbour regime under the IT Act has changed substantially since it
was first adopted in the year 2000. Evolution of the immunity under Section 79
and its cognate regulations in four stages:

Stage I Stage II Stage III Stage IV

● Challenges
● IT Act 2000 ● Shreya ● 2021 IT to the 2021
● 2008 Singhal and Rules IT Rules
Amendment its
● 2011 IT aftermath ● 2022 IT
Rules Rules
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Amendments
Intermediary Liability Regime in India- Interpretation
of ‘actual knowledge’
• Section 79 of the IT Act: Intermediaries can claim immunity under Section 79 of the IT Act when
the function of an intermediary is limited to providing access to a communication system over
which information made available by third parties is transmitted or temporarily stored or hosted; or
the intermediary does not initiate the transmission, select the receiver of the transmission, and
select or modify the information contained in the transmission.
• Section 79(3): This immunity will not apply when the intermediary:
■ has conspired or abetted or aided or induced, whether by threats or promise or otherwise in
the commission of the unlawful act;
■ upon receiving actual knowledge, or on being notified by the appropriate Government or its
agency that any information, data or communication link residing in or connected to a
computer resource, controlled by the intermediary is being used to commit the unlawful act,
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the intermediary fails to expeditiously remove or disable access to that material on that
resource without vitiating the evidence in any manner.
• Failure to comply with the due diligence obligations envisaged under 2021 IT Rules can also lead
to an intermediary losing its safe harbour immunity under Section 79.
Relevant Judgments regarding intermediary liability
• Actual Knowledge
■ Pre 2015: Intermediaries were deemed to have actual knowledge as soon as an affected
person had communicated their grievance to the intermediary.
■ Post 2015: In the landmark judgment of Shreya Singhal v Union Of India (2015) 5 SCC
1, the Court held that an intermediary is obligated to take down content only based on a
valid court order or direction from an appropriate government agency. Intermediaries were
no longer deemed to have actual knowledge only on the basis of user complaints.
■ In Amazon Seller Services Pvt. Ltd. v. Amway India Enterprises Pvt. Ltd. & Ors., 2020
SCC Online Del 454, the Delhi High Court explained that Section 79 of the IT Act provides
a “safe harbor” to intermediaries, under which plaintiffs “have to first show that there ha[s]
been a violation of any of their rights due to the Defendants’ activities before the
‘affirmative defence’ of Section 79 could be sought to be invoked.” (Paras 123-124).
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Relying on the Shreya Singhal decision, the Delhi High Court further held that the
“obligation of an intermediary to remove content under Section 79(3)(b) of the IT Act arises
only if there is a Court order or a notification from a government agency on the grounds
mentioned under Article 19(2) of the Constitution.” (Para 128).
Relevant Judgments regarding intermediary liability
• Determination of whether an entity is an intermediary:
■ Courts have often ruled that the question of whether an entity is an intermediary under Section
2(1)(w) of the IT Act should be answered at trial (as opposed to an interim or preliminary stage)
(Google India Pvt. Ltd. v. Vishakha Industries 2020 (4) SCC 163, Para 153). For example,
where a party alleged that Amazon was acting beyond the scope of an intermediary through its
active involvement in selling products, the Delhi High Court held that “[g]iven the disputed
questions of facts that emerge from the pleadings in the suit, it is obvious that the issue of
whether an entity is an intermediary or not can be decided only after a trial” (Amazon Seller
Services Pvt. Ltd., Para 141)
■ In Myspace Incv Super Cassettes Ltd 2016 SCC Online Del 6382, the Delhi High Court held
that a share' button on a platform does not amount to the intermediary initiating a transmission or
selecting a receiver, as the decision to click the button rests with the user.
■ The Court also found that an automated editorial system which inserted
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advertisements into
infringing content did not amount to modifying the "content" of the transmission, prima facie
satisfying the threshold of Section 79(2)(b) (Para 64).
■ In Amazon Seller Services Pvt. Ltd. the Delhi High Court held that in the case of e-commerce
platforms, it was the customer who initiated the transmission and the e-commerce platforms did
not modify the information contained in the transmission (e.g. choice of product and number of
units) when they transmitted this information to sellers (Para 139-144).
Relevant Judgments regarding intermediary liability
• Intermediary cannot be tasked with judging which material on their platforms is lawful
or unlawful.
■ In Shreya Singhal, the Supreme Court expressly declined to impose a proactive
monitoring obligation on intermediaries, concluding that intermediaries cannot be tasked
with judging which material on their platforms is lawful or unlawful.
■ Instead, the Supreme Court clarified that intermediaries only have a duty to remove or
disable access to unlawful content upon receiving “actual knowledge” through a court
order sufficiently identifying the content that is unlawful.
■ “Section 79(3)(b) has to be read down to mean that the intermediary upon receiving
actual knowledge that a court order has been passed asking it to expeditiously remove or
disable access to certain material must then fail to expeditiously remove or disable access
to that material. This is for the reason that otherwise it would be very difficult for
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intermediaries like Google, Facebook etc. to act when millions of requests are made and
the intermediary is then to judge as to which of such requests are legitimate and which are
not.” (Para 122, Para 124.3).
■ The Supreme Court reiterated this reasoning in Google India: “Shreya Singhal makes it clear
that an intermediary’s liability will not arise unless it failed to take down material upon there
being actual knowledge by court order or government communication. This safeguard has
been put in place to avoid the chilling effect on free speech. The intermediaries would, if a
contrary view is taken, stand elevated to the status of super censors and denude the internet
of its unique feature of a democratic medium for all to publish, access and read any and all
kinds of information.” (Para 54).
■ The Delhi High Court in Kent RO Systems Ltd. v. Amit Kotak, (2017) 240 DLT 3 held that the
IT Act does not require an intermediary to “screen all information being hosted on its portal for
infringement of the rights of all those persons who have at any point of time complained to the
intermediary.” (Para 31).
■ The judgment in Kent RO Systems relied on Myspace Inc., which held that an intermediary
can only be denied immunity if it receives “actual knowledge,” and that “general awareness” is
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not sufficient. (Paras 38 and 77(b)). The Delhi High Court found that: “In case of Internet
Intermediaries, interim relief has to be specific and must point to the actual content, which is
being infringed.” (Para 77(b)). The Court also recognised that tasking an intermediary with
determining which content infringes and which does not infringe would have a chilling effect on
the fundamental right to free speech (Para 71).
Regulating
Emerging
Technologies
Augmented Reality (AR)
Augmented reality is an enhanced, interactive version of a real-world
environment achieved through digital visual elements, sounds, and other
sensory stimuli via holographic technology. AR incorporates three features: a
combination of digital and physical worlds, interactions made in real time, and
accurate 3D identification of virtual and real objects.

Examples:
● Apple Vision Pro
● Snapchat AR filters
● Pokemon Go
Virtual Reality (VR)
It is fully immersive, which tricks your senses into thinking you’re in a different
environment or world apart from the real world. Using a head-mounted display
(HMD) or headset, you’ll experience a computer-generated world of imagery and
sounds in which you can manipulate objects and move around using haptic
controllers while tethered to a console or PC.

Examples:
● Metaverse
Offences in AR/VR/MR
● Assault
● Theft
● Privacy violation
● Real-world injuries
● Identity thefts
● Financial crimes
● Others (such as IPR violations, hacking)
Elements of MUIEs that can impact content policies
Web 3.0
A new version of the web, built
on blockchains, that would (in
theory) be de-centralised,
democratic, and peer-to-peer.
Cryptocurrencies, NFT, and
DAOs (Decentralised
autonomous organisation, a
headless corporation where
decisions are voted on by
members, and executed by
encoded rules on blockchain) are
all part of Web3 and enable a
read/write/own internet.
Can blockchain enable free speech?
Key Questions:
● Whether current Indian law sufficiently covers these emerging
technologies?
● How will liability be ascertained in a decentralised web?
● What are the gaps in law?