Introduction
The 21st century has witnessed the rapid proliferation of online intermediaries. However, this expansion has also exposed significant regulatory gaps, particularly in how these platforms are legally classified and held accountable. The current Indian taxonomy largely treats intermediaries as passive facilitators, granting them negative or limited liability under the assumption that they do not exercise significant control over the services or goods availed through their platforms. This blanket classification fails to account for the diverse roles these intermediaries now perform, especially as many platforms actively influence consumer interactions, service delivery, and outcomes. This approach overlooks key distinctions in the degree of control, intervention, and operational oversight exercised by different intermediaries. As online platforms and aggregators expand, these outdated classifications allow corporations to obscure their functional roles, thereby evading liability for misconduct or harm caused through their services.
The judiciary has attempted to navigate these ambiguities by borrowing foreign legal principles and applying fragmented tests to determine intermediary liability. However, the absence of a consistent and functional framework creates uncertainty and leaves room for errors and exploitation. This paper advocates for the adoption of a functional taxonomy perspective on online intermediaries: one that distinguishes intermediaries based on their level of control and engagement. This approach would enable courts to move beyond rigid classifications and impose liability where platforms act as more than neutral conduits, and adequately distinguish whether a platform is merely an access provider or influencing host.
The Judicial Inclination
The Supreme Court has noted the variations in employer-employee relationships and the difficulty in ascertaining liability almost half a century ago. This difficulty has only been exacerbated with the advent of divergent forms of digital technology and large corporations aiming to exclude themselves from liability. However, the judiciary still uses the same principles in attempting to adjudicate on such new cases.
The post 2010 era has seen multitudes of cases against online intermediaries across the country. Considering the recent case of cab aggregators, the court in Ms. X vs Ani Technologies Private Ltd held that the parent company of OLA can be made liable to pay compensation arising due to a scenario where a female passenger was sexually harassed in 2019 when availing a cab from the company. She subsequently filed under the POSH Act, arguing that the taxi drivers are employees of OLA. The court analysed the function that the online plays in each ride along with the level of control exerted by it on the drivers and thereby found the company liable to pay compensation.
Although the order has been stayed by the HC currently, the court, when granting compensation to the victim, inadvertently took a functionalist interpretation in ascertaining liability. The initial route and hesitant view taken by the HC show the necessity of classifications based on the function and subsequent control of an online intermediary. This functionalist rationale used by the court to place liability on the online platform, has also been used previously in another case made against a Dunzo delivery agent when awarding compensation. A similar rationale has also been adopted in holding Amazon liable for consumer disputes. The court looked at the functions Amazon holds in the procurement of 3rd party sellers, payment process and consumer redressal and held the platform liable.
Contemporary Issues from Misclassification
As shown by the above discourse, the judiciary has strengthened itself to adopt a functionalist rationale in adjudicating liability all but in name. However, newer apps that have been in the market for a shorter span have attempted to make certain functions inconspicuous, which would necessitate that the judiciary explore alternative measures to hold such apps liable.
While digital technology has evolved in the past few years, the present terminology of online intermediaries still reflects a 20th-century static view. Take, for example, the case of Onlyfans, a website that is indirectly and subtly advertised as a commercial sexual platform with minimal intervention. As per Section 2(w) of the IT Rules, they would fall under the ambit of a ‘social media intermediary’. Legally clothing them as an intermediary allows them to be a ‘neutral actor’ and utilise the defence of being a third party, unaware of the activities on their platform, having no duty to rectify or regulate them. Classifying them with the taxonomy of an ‘intermediary’ thereby disregards their passive participation in the illicit activities such as CSAM and violence on their website, essentially absolving them of liability. Similarly, various Indian video-chatting apps would be entitled to the same safe harbour despite advertising themselves with efforts to promote illicit sexual activity.
There have also been recent concerns on the roles of major social media players such as Facebook and Instagram in curating addictive content for teenagers as well as curating harmful content such as CSAM and child abuse and facilitating child exploitation. A complaint has been filed against META for facilitating and subsequently profiting off the solicitation, trafficking and abuse of children. This further highlights the functions and active engagement undertaken by these intermediaries, exacerbating the need for a functionalist taxonomy.
Additionally, Section 79 of the IT Act provides a safe harbour to intermediaries from any information or content that is posted on them. Section 79(3)(b), attempting to curb the blanket safety given to intermediaries, states that such an exemption will not be granted if the intermediary has acted to vitiate such content after being notified by the government. However, the present section places the onus on the state to observe irregularities and therein notify intermediaries, rather than placing the onus on the intermediaries to mitigate such content within its boundaries in the first place.
The present lacuna in law and the possibility for corporations to absolve themselves from liability occurs as they are classified as intermediaries despite their functional utilization and controlling power, which should not be the case in the 21st-century digital world. While the intent behind the IT Rules is commendable, and the legislation has attempted to distinguish between different types of social media intermediaries, the current definition has been so broadly construed that all communication platforms come under this ambit and avail the same protection. The legislature, thus, simply cannot keep up with the changing models of information technology. This is precisely why adopting a functional taxonomy perspective when adjudicating online intermediaries is needed, as it allows the judiciary to be flexible while staying within an objective framework.
Adopting A Functional Taxonomy
The present classification regime under Section 2(w) of the IT Act wholly disregards the ever-changing diversity of forms among intermediaries, the copious differences in the services provided by them, the level of access to sensitive information, intervention by the intermediary, and the heterogeneity of their functions. For example, internet service providers and domain name registrars are required to comply with the same provisions as social media platforms and E-commerce websites.
Whereas, adopting a functional taxonomy perspective on their classification would better ascertain their liability in such cases and lay to rest the question of whether they would constitute a ‘neutral party’ or not. Looking at the Australian framework in the Online Safety Act, online sectors have been divided into various areas with different provisions. Further, the framework also holds that industries must develop new codes to regulate illegal content such as CSAM and violence, which enables the legislation to be flexible with digital development.
Additionally, Article 14 of the e-Commerce Directive makes a stride forward in ascertaining liability despite the platform being an intermediary. It observes two thresholds in doing so; firstly, how active was the online platform in the alleged illegal activity? Secondly, did the provider attempt to remove or disable access to the illegal information on the platform? On a similar note, a functional taxonomy perspective can also lay down objectives and empirical requirements of control that can adequately establish whether the online platform is an active participant or a neutral party.
Employing thresholds similar to the e-Commerce Directive in India would allow the judiciary to efficiently ascertain the level of engagement and function played by the online platform and thereby proffer liability accurately. This, grouped with the Australian classification on the basis of functional differentiation as well as harsh penalties on the online platform if found contravening codes of conduct, thereby places the onus on the company to ensure regulation, rather than the state to ensure compliance. Such a perspective would also aptly address the question of liability and allow for efficacious adjudication in the online sphere.
Conclusion
The current legislative framework in India, which broadly categorizes all intermediaries under a static taxonomy, fails to reflect the diverse roles these platforms assume today. A functional taxonomy perspective, which assesses intermediaries based on their degree of control and active involvement, offers a pragmatic solution to address these gaps. As demonstrated by recent judicial trends, courts are already inclined to adopt this reasoning, albeit inconsistently. A reclassification based on the actual functions and control of online platforms would ensure greater accountability and reduce the misuse of safe harbour protections. Drawing from international frameworks like the Australian Online Safety Act and the EU’s e-Commerce Directive, India must pivot towards a more dynamic model that aligns with the realities of the digital ecosystem, and adapt to keep up with the harsh realities of the digital system.
(This post has been authored by Tanya Sara George, a third-year student at Maharashtra National Law University, Mumbai)
CITE AS: Tanya Sara George, ‘A Functional Taxonomy On Online Intermediaries In India’ (The Contemporary Law Forum, 13 December 2024) <https://tclf.in/2024/12/13/a-functional-taxonomy-on-online-intermediaries-in-india/>date of access.