Bummer! Blogs, Review & Social Sites Termed Agents; Would Be Now Accountable For All Hosted Content

Under Section 79 of Information Technology Bill 2000, review websites, blogs, social media portals like Facebook, Twitter, Youtube etc are free from any responsibility of the hosted content. This section says, “an intermediary shall not be liable for any third party information, data, or communication link made available or hosted by him”.

Hence, if a review website like Zomato praises the food quality of any restaurant, and in case, God forbid, a customer gets motivated to order a food item and gets diarrhea after eating a dish from that restaurant; then Zomato would not be liable for any damages.

But things may change soon as Govt. is considering to put responsibility of the content on the website which is hosting it. This provision would be made under the new GST Bill (Goods and Services Tax Bill) which can be soon approved in the Parliament, and give some restless nights to publishers and online reviewers.

As per the new provisions mentioned in the updated GST Bill,Blogs, Review Sites Would Be Now Accountable For Hosted Content; GST Bill Will Declare Them As ‘Agent’ and goods on ‘behalf of others’ and then generate commission from the same.

Internet and mobile Association of India or IAMAI warned about this possibility as they said, “The new GST Bill clubs all intermediaries as ‘agents’ who ‘carries on the business of supply or receipt of goods and/or services on behalf of another'(emphasis added) and clubs these entities together with commission agents, brokers, etc,”

Who Is An Agent?

Within a business process, an agent is the one who acts as an intermediary between the end user, and the business. The GST bill defines an agent as “a person who carries on the business of supply or receipt of goods and/or services on behalf of another, whether disclosed or not and includes a factor, broker, commission agent, arhatia, del credere agent, intermediary or an auctioneer or any other mercantile agent”.

When Govt. amended Real Estate Bill 2013, then agents active in real estate deals were asked to disclose all information in the public domain, and were held accountable for any misdoings in terms of delivery and broken promises. Something similar is now being implemented for the Internet and Ecommerce market as well, under the new GST Bill.

Why This Will Harm Digital Businesses?

Billions of pages of User generated content (UGC) is created every year, and thousands of hours of videos are uploaded every minute. Youtube India alone gets 600 hours of content every minute, and it will become just impossible to monitor and approve each and every bit of UGC.

The example of Zomato is a small instance of the ensuing chaos and confusion which can happen if such websites are declared as agents, and held responsible for the hosted content.

Indian Courts can overflow with litigations and petitions against content hosting websites, online marketplaces and review websites as end-user will now get an easy target to aim their frustrations. Say, for example, a terrorist makes a bomb by using Youtube tutorials and blows up a home. Youtube can now be held responsible for hosting such content, and enabling the terrorist to create a bomb.

Assume such myriad examples for Facebook, LinkedIn, Twitter, Flipkart (its an online marketplace) and you can very well imagine what consequences it can produce.

IAMAI has clearly stated their displeasure over these provisions included in the new GST Bill, as they said, “This would effectively stop free and easy hosting services that the platform offers. Similar restrictions would be applicable for other services like social networking sites, online marketplaces, etc. In short, doing business in India just got complicated for Internet Service providers,”

IAMAI has specifically stated that Indian Govt. needs to implement Section 79 of the IT Bill 2000 and create a friendly environment for all Internet based businesses and startups.

Earlier, IAMAI had said that failure to implement GST Bill will destroy Indian ecommerce sector, and Assocham had termed GST Bill as ‘brahamastra’ for Indian economy.

As per latest updates, the current monsoon session of Parliament may pass GST Bill.

We will keep you updated as more details come in.

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