Safe harbour for e-commerce intermediaries shields a neutral marketplace from criminal liability for third-party seller conduct.
A neutral e-commerce intermediary that merely facilitates buyer-seller transactions and does not take title to goods is protected by the safe harbour under Section 79 of the Information Technology Act, 2000 when it satisfies the statutory due diligence requirements. The platform's terms showed that commercial terms, product content and sale obligations belonged to the buyer and seller, not the intermediary, so alleged defects in the goods were attributable at most to the seller. On that basis, the FIR did not disclose the essential ingredients of the offences against the intermediary, and the criminal proceedings were liable to be quashed.
Issues: Whether an e-commerce marketplace intermediary, acting as a neutral platform between buyer and seller, can be fastened with criminal liability for alleged defects in goods supplied by the seller, and whether the FIR discloses an offence against the intermediary warranting quashing.
Analysis: The petitioner was found to be an intermediary within the meaning of the Information Technology Act, 2000, operating a marketplace platform and not taking title to the goods sold. The decision turned on the safe harbour under Section 79, read with the requirement of due diligence under the Intermediaries Guidelines Rules, 2011. The platform's contractual terms showed that the commercial terms, product content, and sale obligations were those of the buyer and seller, while the intermediary merely facilitated the transaction. The Court held that the intermediary had complied with the statutory conditions and that the alleged misconduct concerned, at best, the seller's supply of goods, not the intermediary's own acts. In such circumstances, the essential ingredients of the alleged offences were not made out against the intermediary on the face of the FIR.
Conclusion: The FIR and the consequential police report, so far as the petitioner was concerned, were liable to be quashed; the protection of Section 79 of the Information Technology Act, 2000 was available to the petitioner.
Final Conclusion: Criminal proceedings could not be sustained against a neutral e-commerce intermediary for third-party seller conduct where statutory safe-harbour conditions and due diligence were satisfied.
Ratio Decidendi: A neutral e-commerce intermediary that merely facilitates transactions and satisfies the statutory conditions of safe harbour and due diligence under Section 79 of the Information Technology Act, 2000 is not criminally liable for third-party seller conduct disclosed on its platform.
TaxTMI 
AI Drafter ✕
TaxTMI 
