The infamous (Now called case where the CEO of was once arrested by Delhi Police on application of the provisions of Section 67 of Information Technology Act 2000 (ITA 2000) has been a landmark case in India for ITA 2000 observers.

The incident invoked such hot passions that the Ministry of Communications and Information Technology (MCIT), Government of India thought it fit to propose amendments to ITA 2000 and exempt “Intermediaries” as a whole from liabilities for any criminal activity committed by network users. In the process the law makers in India were ready to sacrifice the principle of “Due Diligence” as a requirement for every Intermediary to avoid such liabilities.

Finally with the intervention of the Parliamentary standing committee, the changes proposed were ordered to be reviewed again and the same is back with MIT. Though there are some stories in the media that the MIT has re submitted the recommendations, MIT is tight lipped on the issue. There is therefore a speculation that another attempt for dilution of ITA 2000 is on cards.

The essence of the argument in the case is the “Vicarious Liability” of an intermediary when an offence is committed by a third party using the resources of the Intermediary.

In this context, the recent decision of a French Court making e-Bay liable for selling Counterfeit goods and imposing a fine is of significance.

In this case eBay has been convicted of selling counterfeit goods and ordered to pay $32, 497 (Approximately Rs 1.3 million) as damages to Hermes on charges that two counterfeit Herms bags were sold on the site.

The arguments which clinched the decision included

“eBay is an active player in the transaction because not only does it offer a number of services to improve the sale, but when it does not work well enough or fast enough, they intervene with the client,” “They are perfectly informed of the transactions since they take a percentage cut.”

It is reported that more such actions are pending in French Courts.

This development has serious implications on the “Security of Online transactions”. The Netizens have a right to expect that online auction houses donot breed fraudsters. The reason why Netizens would like to buy goods from a reputed auction place instead of an unknown website is the trust that they would get a fair deal. If the owners of such sites disown their responsibility to take sufficient precautions to weed out fraudsters then they cannot claim a “Brand” value for their business and attract Netizens soley on the basis of attractive advertisements on and offline.

This is what we call as “Cyber Law Compliance” which is considered necessary for all Intermediaries. We urge all Intermediaries to undertake “Cyber Law Compliance Audit” and upgrade their security for the Netizens and at the same time protect themselves from liability.

Naavi  of

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