The Indian ITAct,2000 stipulates that Network service providers are not liable in certain cases, for any third party information or data made available by an ISP, if it proves that the offence was committed without his knowledge[1],, or that he had exercised all due diligence to prevent the commissioning of such offence
[2]. A ‘network service provider’ means any person who provides access to information service in electronic form. For example: Internet service provider, cellular mobile services, customer access services, mobile satellite services etc. It essentially performs two tasks-to provide access to the network and to act as intermediary between an originator and addressee with respect to any particular electronic message.

The position on ISP liability in India is the same as prevailing in other countries. However, with the enforcement of the IT Amendment Bill 2008, certain additional grounds will be added whereby an intermediary shall not be liable for any third party information, data, or communication link made available or hosted by him if the function of the intermediary is limited to providing access to a communication system over which information made available by third parties is transmitted or temporarily stored or hosted; or the intermediary does not initiate the transmission, select the receiver of the transmission, and select or modify the information contained in the transmission and the intermediary observes due diligence while discharging his duties under the Act .The amended Section 79 of the IT Act ( yet to be enforced) provides that intermediaries will be held liable if the intermediary has conspired or abetted or aided or induced, whether by threats or promise or otherwise in the commission of the unlawful act; or upon receiving actual knowledge, or on being notified by the appropriate Government or its agency that any information, data or communication link residing in or connected to a computer resource controlled by the intermediary is being used to commit the unlawful act, the intermediary fails to expeditiously remove or disable access to that material on that resource without vitiating the evidence in any manner.

U.S Courts have ruled in some decisions that an ISP may be held liable incase of defamation, copyright infringement, child pornography, false advertisement or fraudulent misrepresentation by facilitating distribution of such material[3].However, passage of communications Decency Act 1996, particularly Section 230 (c)(1) has thrown more light on the issue and it aims to restrict the scope of liability of network service providers. In Zeran v America Online Inc[4], court held “Congress enacted Section 230to remove disincentives to selfregulation fearing that the specter of liability would deter service providers from blocking and screening offensive material. Section 230 forbid the imposition of publisher liability on a service provider for the exercise of its editorial and self regulatory functions”. In Doe v America Online , Inc[5] , the plaintiff sued AOL for allowing a subscriber named Russell to use its chatrooms for marketing videotapes and photographs consisting of child pornography in which plaintiff’s minor son appeared. The complaint alleged that AOL was negligent per se in allowing Russell to use its facilities for criminal distribution of obscene materials and it was negligent on common law principles. It was alleged that AOL had received complaints about Russell’s use of its facilities for unlawful purposes but that AOL neither warned Russell nor suspended his service. The Supreme Court of Florida held that Section 230 immunised AOL from liability for negligence based on a subscriber’s use of its facility to distribute child pornography. However, this unqualified immunity is lost if it either provides proprietary content or knowingly distributes the unlawful content. Therefore, Section 230 creates federal immunity to any cause of action that would make service providers liable for information originating with a third party user of the service[6]. In U.K strict rules on ISP’s liability exist.
In Godfrey v Demon Internet ltd[7], the defendant ISP carried a newsgroup ‘soc.culture.thai.’ and stored postings for few days. Some one unknown in US made a defamatory posting about a U.K citizen who complained to remove the posting which remained displayed for long .The court held that Demon was informed of publishing a defamatory matter and he neither took reasonable steps to remove content and nor can be said to have no knowledge of the same. Hence, he could not escape liability under UK defamation Act 1996.

[1] Knowledge here means actual or constructive knowledge of contents of the material which would put a reasonable person on notice

[2] Section 79- Explanation- For the purpose of this section –
(a) “network service provider” means an intermediary;
(b) “Third party information” means any information dealt with by a network service or provider in his capacity as an intermediary.

[3] See United States v. X .Citement Videos, 115 S.Ct. 464 (1994); Playboy Enterprises, Inc v. Frena, 839 F. Supp. 1552 (M.D. Fla 1993); See also Intellectual Property and the National Information Infrastructure: The Report of the Working Group on Intellectual Property Rights (Sept. 1995); Mark A. Lemley, “ The Economics of Improvement Intellectual Property Law”, 75 Tex. L. Rev. 989 (1997); Martin H. Samson, “ Trademark Lawsuits in Cyberspace”, N.Y.L.J., Dec. 2, 1996, at S10; Alan J. Hartnick, “ Copyright & Trademark on the Internet” (visited Oct. 23, 1997) Alan J. Hartnick, “ Copyright & Trademark on the Internet And Where to Sue”, N.Y.L.J., Feb. (1997).

[4] 129F.3d 327,330-31(4th Cir. 1997)

[5] 783 So.2d 1010 ( Fla. 2001)

[6] See also Ben Ezra, Weinstein & Co v America online inc 206F.3d 980 (10th Cir.2000 ) and Schneider v,Inc 31P.3d 37(Was.Ct.App.2001). see EUDirective (2000/31/EC, dated June 8,2000) which is consistent with S.230 of Communications Decency Act,1996:Articles 12,13,14. ISP is not liable incase of automatic , intermediate and transient storage of information transmitted if storage is for purpose of transmission.ISP is not liable if provider has no actual knowledge of illegal activity or information or on gaining such knowledge acts expeditiously to remove unlawful content.

[7] 4 AllER342High Court