Rajeev Talwar: E-auctions: legitimate legal concerns

The recent revelations about the sale of obscene material on e-Bay subsidiary Baazee.com has brought the issue of law relating to the e-auction to the forefront.

Incidentally, this is not first of its kind. In September 1999, it was reported that three men attempted to auction marijuana on e-Bay. Though e-Bay pulled the plugs the very next day, the incident was reported on Auctionwatch.com.

Though the auction sites do have a self-imposed policy, which is displayed on their website, this may be good only so far as the civil rights of the auction seller, purchaser or the portal are concerned. However, the dominant issue that has arisen after the criminal action initiated against the CEO of Bazee.com is one of criminal liability.

The relevant provision here is Section 67 of Information Technology Act, 2000, which holds that a person who publishes or transmits or causes to be published in electronic form any obscene material, is guilty of offence under that provision.

In such circumstances, an auction seller may be accepted as a person who published an obscene material, but the claim of an auction portal or even Internet service provider (ISP) that it is not guilty of transmitting such obscene material in electronic form is something that needs to be tested.

It is difficult to accept that all intermediaries "" be it an e-auction portal, an ISP or telephone/ cellphone company "" would be covered under the provision since all of them "transmit".

Though parallels have been drawn of communication over Internet with the transmission over telephone or newspaper, the US Supreme Court did not accept such comparisons in a decision in 1997 (Reno vs American Civil Liberties Union).

In a recent case in Chicago (USA), a complaint arose from a secret video of athletes in various positions in the rooms and bathroom showers, which was subsequently sold over the Internet.

The complaint was lodged against the ISP.

In 2003, the US Court of Appeal for the 7th circuit, in John Doe vs GTE, while relying upon the Section 230(c) of the Communication Decency Act, 1996, held that the ISPs are protected from liability for the actions of wrong doers who use their services.

Section 230(c) set forth, among other things, that "no provider or user, an interactive computer service, shall be treated as a publisher or speaker of any information provided by another information, content provider" and that "no provider or user of an interactive computer service, shall be held liable on account... of an action taken in good faith to restrict access to or availability of material that the provider or user considers to be obscene or other objectionable....". The court rejected the contention that ISPs could be held liable for aiding or abetting.

In fact, the Supreme Court of Canada, in a ground-breaking pronouncement in SOCON vs CAIP early this year, unanimously ruled that ISPs do not "communicate" works nor "authorise" the communication of works.

It held that so long as the Internet intermediary does not itself engage in acts related to the content of the communication, that is, whose participation is content-neutral, it will be a mere "conduit" for information communicated by others.

The Supreme Court, while describing the Internet as "one of the great innovations of the information age," held that the use of Internet "should be facilitated rather than discouraged".

Although these decisions relate to American and Canadian laws, they ought to be adopted as a persuasive tool to interpret the expression "transmit" under Section 67 of IT Act.

Accordingly, the expression "transmit" used against either ISPs or e-auction portals should not make them guilty under the provisions unless or until the intermediary itself engage in acts.

Thus, an auction website, which is content-neutral and confines itself to providing "a conduit" for information communicated by others only, cannot be deemed to have transmitted electronic material as envisaged under Section 67.

The other thing that must be noted with concern is the recognition of the Internet by the courts as a medium that needs encouragement. Certainly, its abuse has to be controlled.

But any attempt to interpret the provisions of the IT Act to discourage the growth of Internet or the Internet intermediary is not good. The law facilitating its growth ought to be the goal.

(The writer is an advocate, Supreme Court of India and member, Computer Law Association, Washington DC)