This is possibly why in its report last month on the Information Technology (Amendment) Bill 2006, the committee headed by Congress MP Nikhil Kumar has called upon the government to abandon the proposal to reduce the liability of service providers or intermediaries in the wake of industry outrage over the 2004 arrest of Baazee.com's CEO for the auction of a CD containing an infamous student porn MMS.

The bone of contention is Section 79 of the IT Act 2000 which says that no service provider shall be liable for any third party information if he proves that the offence was committed ``without his knowledge or that he had exercised all due diligence'' to prevent the commission of such contravention.

Since the existing safeguard failed to save Baazee.com CEO Avnish Bajaj from being subjected to the ignominy of arrest and detention, the government sought to reduce the liability further in its 2006 Bill. The Bill raises the bar for taking action against ISPs by stipulating that they are not liable unless it is proved that they have conspired or abetted in the commission of the unlawful act.

Service providers under no obligation in US, EU

This is really how the law is in both Europe and in the US. To the industry here, the proposed amendment seemed a fair safeguard. But the standing committee, far from endorsing the change, has recommended that the existing Section 79 should be strengthened by casting ``a definite obligation'' on the service providers to ensure that the third party information was within the parameters of the law especially because ``it is very difficult to establish conspiracy or abetment'' on their part.

The committee also took objection to the Bill's proposal to relieve the service providers of the burden of demonstrating that they had exercised due diligence to prevent the third parties from misusing online market places and auction sites. ``The committee are of the firm opinion that if explicit provisions about blocking of objectionable material through various means are not codified, expecting self-regulation from the intermediaries, who basically work for commercial gains (sic), will just remain a pipedream,'' it said.

For all its efforts to make out a case for increasing the liability of service providers, the committee glossed over the fact that the Bill was in tune with the approach adopted by advanced countries that have given sufficient thought before framing their Internet laws. Take, for instance, the relevant law in the European Union. It says that a service provider storing third party information is liable to criminal action only when he ``by intent is storing illegal information or assisting in illegal activities.''

What is even more contrary to the committee's report is the express clarification in the European law that its provisions ``do not impose a general obligation on service providers to monitor the information, which they transmit, or store on the request of a recipient for the service, nor a general obligation to seek facts or circumstances indicating illegal activities.'' Similarly, in the US, both courts and legislation broadly seek to reduce the liability of service providers on charges such as copyright infringement and defamation.

The Digital Millennium Copyright Act, for instance, spells out the criteria for establishing liability and makes it difficult to sue service providers vicariously for copyright infringement committed by third parties. So, which way should Indian laws go? The way the advanced countries have gone, or in accordance with the wishes of some misinformed MPs that would spell the death of Internet in India?