REGULATION OF INTERNET INTERMEDIARIES: LIABILITY, IMMUNITY, AND ACCOUNTABILITY

Abstract

This paper explores the regulation of internet intermediaries, focusing on the complex interplay between liability, immunity, and accountability in the modern digital ecosystem. Internet intermediaries, including social media platforms, search engines, and online marketplaces, serve as essential facilitators of online communication and commerce. However, their role in mediating the spread of both legitimate and harmful content has sparked significant legal and regulatory debate. By examining the historical context of intermediary regulation, including key legislation like the Communications Decency Act (CDA) and the Digital Millennium Copyright Act (DMCA), this paper outlines the evolving landscape of intermediary liability and the role of immunity provisions. It also reviews international regulatory frameworks, such as the European Union’s Digital Services Act (DSA) and India’s Information Technology Act, to compare different approaches to regulating these entities. The paper delves into the types of liability intermediaries may face, including direct, indirect, and vicarious liability, illustrated through case studies on copyright infringement, defamation, and hate speech. The limitations of current immunity provisions, particularly Section 230 of the CDA, are critiqued, and the rise of accountability mechanisms—such as content moderation, transparency reporting, and notice-and-takedown procedures—are discussed in detail. The study concludes by evaluating potential regulatory approaches, highlighting sector-specific regulations, co-regulation models, and the challenges posed by jurisdictional conflicts, technological advancements, and human rights concerns. It ultimately argues for a nuanced regulatory framework that balances the need for free speech with effective accountability measures for harmful content.

Keywords

Internet Intermediaries, Liability, Immunity, Accountability,Content Moderation, Digital Services Act, Communications Decency Act

Introduction

In today’s digital world, internet intermediaries are major players that facilitate communication, commerce and content distribution across the globe.^[1] These intermediaries, which include social media platforms such as Facebook and Twitter, search engines such as Google and online marketplaces such as Amazon and eBay, are critical to how we interact with information and their content. Because they mediate interactions between users and a large amount of information, their impact on the new internet ecosystem cannot be overstated. Not only do they provide platforms for free speech and economic activity, but they also regulate the spread of information that can be illegal or sometimes harmful.

However, the role of defenders as gatekeepers is a serious challenge to the law. Policymakers are increasingly grappling with the question of how to regulate these entities to protect public interests without stifling innovation or infringing on free speech. The main legal question here is whether, and to what extent, these intermediaries should be held liable for illegal content or actions that occur on their platforms. The balance between liability and immunity is delicate, especially in the face of issues like copyright infringement, defamation, hate speech, disinformation, and online harassment.

Given the evolving nature of the internet and its global reach, regulatory frameworks must not only address liability and immunity but also ensure accountability. This paper explores how intermediaries should be regulated to balance these three objectives—liability, immunity, and accountability—while fostering a healthy digital ecosystem that respects both user rights and legal responsibilities. The study suggests that while media protection is important to the growth of the Internet, a more robust approach to accountability is needed to prevent abuse and harm.

Background and Context

The legal regulation of internet intermediaries has its roots in the early days of the commercial internet. The U.S. Congress, aware of the potential chilling effect that liability could have on the development of the internet, introduced laws like the Communications Decency Act (CDA) of 1996 and the Digital Millennium Copyright Act (DMCA) of 1998^{^[2]}. Section 230 of the CDA became particularly significant, offering broad immunity to intermediaries from liability for user-generated content, effectively shielding them from lawsuits related to defamation, obscenity, and negligence. Congress aimed to protect online platforms from being held responsible for every piece of content their users generated, encouraging the growth of vibrant digital spaces. Similarly, the DMCA’s safe harbor provisions were designed to protect online service providers from copyright infringement claims, provided they promptly removed infringing material upon notification.

In the EU, the Electronic Commerce Directive of 2000 mirrored some aspects of the US law, but moved closer to diplomatic rules and focused more on consumer protection and privacy . The directive created a mandatory ban for intermediaries, as long as they only participate and do not control the projects they manage. Under this policy, platforms such as eBay or YouTube can avoid liability by acting as a conduit for user activity. However, lawyers have to work if they understand the legal stuff, which lays the groundwork for the notice and takeover practices found in many jurisdictions today.

In India, the Information Technology (IT) Act of 2000, the Indian code(2000)^{^[3]} seems to balance the need for Internet freedom with protecting citizens from harm. Section 79 of the Information Technology Act grants intermediaries immunity from liability for third-party content provided they comply with guidelines for editing content and procedures for reading and downloading . However, like other jurisdictions, the ban imposed under the IT Act has been challenged in court, with Indian courts demanding that regulators step up their efforts to check for offensive content.

These basic rules have shaped the work of Internet advocates around the world, but they are also the subject of much debate. With the rise of social media, the spread of fake news, and the rise of bad news, the public and the government have been forced to rethink these health protections.

Liability of Internet Intermediaries

Internet intermediaries may face a range of legal liabilities depending on the context in which the wrongdoing occurred and these liabilities can be classified as direct liability, indirect liability and vicarious liability. Direct liability arises when the intermediary engages in illegal activities. For example, if the platform engages in the sale of counterfeit goods or pirated content, it may be liable for infringement.

Indirect or contributory liability arises when an intermediary conducts or allows third parties to engage in illegal activities, even if the intermediary did not engage in such activities. A famous example of this is the case of A & M Records, Inc. v. Napster, Inc. 239 F.3d 1004 (9th Cir. 2001) , where Napster is liable for allowing users to share copyrighted music without a license. Although Napster did not directly infringe copyright, the court found that it provided the tools and infrastructure to enable widespread infringement.

On the other hand, vicarious liability is based on the consequences of mediation from wrongful acts of third parties. in MGM Studios Inc. v. Grokster, Ltd. 545 U.S. 913 (2005) Grokster was found liable under the theory of vicarious liability because it profited from copyright infringement by users through its peer-to-peer file sharing network.

In defamation cases, the legal principles of vicarious liability are influenced by section 230 of the CDA, which protects most defendants from defamation claims. In the previous case Zeran v. America Online, Inc., the court held that Internet service providers cannot be held liable for defamatory information posted by users. This decision reinforced the idea that intermediaries should not be treated as publishers of third-party content for liability purposes.

Immunity for Internet Intermediaries

Section 230 of the CDA and the DMCA’s safe harbor sections have two main sections. Section 230 provides broad protection from vicarious liability for content posted by their users, allowing platforms to host a wide range of content without fear of legal penalties. However, this is not a complete illness. For example, mediators may lose access to information or participate in legislative initiatives.^[4]

The DMCA safe harbor provisions provide similar protections, but focus more on copyright infringement. The DMCA is a response to growing concerns about how administrators can be held accountable for the amount of copyrighted material posted on their platforms. Under the DMCA, third parties are not liable as long as they remove infringing content immediately after being notified through appropriate legal channels.

The limits of these protective measures have been tested in numerous court cases. In Viacom Int’l Inc. v. YouTube, Inc.2012^{^[5]}, Viacom sued YouTube for hosting and profiting from copyrighted content submitted by users. While YouTube argued that it was protected by the DMCA’s safe harbor provisions, Viacom argued that the platform had an opportunity to remove infringing content. The court ultimately sided with YouTube, reinforcing the idea that defendants can enjoy immunity if they respond to infringing notices in a timely manner.

Opponents of proxy bans argue that these protections allow people to escape liability for hosting offensive content, including misinformation, defamation and legal action. Some have called for a rethink of these safeguards, especially given the growing social and political influence of platforms such as Facebook, Twitter and YouTube.

Accountability Mechanisms

Accountability measures for Internet moderators have become increasingly scrutinized because of their role in hosting offensive or offensive content. Many moderators have responded by using internal content moderation systems, which include removing or flagging illegal or offensive content, banning accounts, or restricting access to certain content.

Content moderation policies vary among platforms, some, such as Twitter, take a more proactive approach to content moderation, while others, such as Reddit, have more manual labor. However, even the most thoughtful content moderation systems face criticism. Users often complain about the lack of transparency and equality in decision-making, but free speech advocates say the power of moderation prevents free speech.

In addition to content moderation, regulators are increasingly using transparent reporting as an accountability tool. Platforms like Google and Twitter regularly release transparency reports that detail the number of takedown requests they requests they receive, the nature of the content removed, and the geographic origins of these requests. These reports provide insight into how platforms are responding to legal and regulatory demands for content removal, but they are not without limitations. Critics argue that the lack of independent oversight and auditing makes it difficult to assess the accuracy and completeness of these reports. Additionally, concerns have been raised about the potential for platforms to obscure the extent of harmful or illegal content, either by underreporting or manipulating the criteria by which they categorize flagged material.

Accountability mechanisms also extend to partnerships with third-party fact-checkers and non-governmental organizations (NGOs) aimed at addressing misinformation and harmful content. For example, Facebook has partnered with independent fact-checking organizations to combat the spread of false information on the platform. These links allow platforms to assume some responsibility for identifying false or fraudulent content, but the final decision to remove or flag content rests with the intermediary.

The EU’s Digital Services Act (DSA) has introduced additional accountability measures by requiring major platforms to provide transparent reports on their content editing practices and to cooperate with national authorities. to administer the constitution. This legislative move reflects a growing awareness that media self-regulation may not be sufficient to address the problems of managing hate speech online. The DSA approach points the way to stronger accountability frameworks that require the media to be more transparent about their work and responsive to public concerns.^[6]

Regulatory Approaches

Regulatory approaches to Internet intermediaries vary across jurisdictions. Some countries, such as the United States, prefer a hands-on approach, focusing on protecting mediators from liability to promote innovation and freedom of expression. This approach is outlined in section 230 of the CDA, known as “the law that created the Internet”. The US system relies heavily on self-regulation, with intermediaries developing policies and guidelines for content regulation. However, growing problems such as whistleblowing, election interference, and cyberbullying have led to calls for reform, and lawmakers have called for reform or repeal. or Section 230.

In contrast, the EU has stepped up its intervention with legislation such as the e-commerce directive and the Digital Services Act (DSA). The DSA represents a major change in the way the EU regulates internet intermediaries, introducing new obligations on content regulation, transparency and accountability. DSA seeks to find a balance between promoting innovation and protecting users from harmful content, with a focus on large media and a large influence on public discourse. The provisions of the DSA require regulators to take preventive measures to prevent the spread of illegal content, such as defamation, and to implement clear procedures that allow users and administrators to know how to make decisions.^[7]

Other countries, such as India, have enacted diplomatic laws that increase government control and strengthen restrictive practices. The Information Technology in India (Digital Mediation Guidelines and Code of Conduct), 2021 provides framework for setting up grievance redressal officers and provides a mechanism for authorities to request removal of illegal content. The laws have been controversial, with critics arguing that they stifle free speech and give the government too much power over online content. However, the Indian government believes that laws are necessary to prevent the spread of misinformation, disinformation and illegal activities online.

The Internet Marco Civil da Brasil, also known as the “Internet of Laws”, is a unique example of diplomatic law that balances the principles of freedom of expression, privacy and accountability. This rule exempts intermediaries from liability for user-generated content, but imposes restrictions on transparency and user privacy. In addition, Marco Civil da Internet imposes certain restrictions on the ability of platforms to download user content, thereby promoting freedom of expression and maintaining accountability for legal actions.

These different legal approaches reflect the ongoing debate about balancing the rights of defenders and users with the need to protect against illegal and harmful online content. While the American model favored manual labor, trends in other regions, such as the EU and India, indicate a growing need for greater access to law. As mediators play an important role in international communications and trade, the question of how best to regulate them remains at the forefront of legal debate.

Challenges and Controversies

There are many challenges and controversies in the legalization of internet ombudsman, especially regarding the balance between protecting freedom of expression and ensuring accountability for constitutional purposes. The main concern is that placing too much responsibility on moderators will lead to more censorship, and platforms will become more content than content to avoid legal consequences. It can suppress legitimate information, especially on political and social issues. On the other hand, the lack of laws allows the spread of negative information, including hate speech, misinformation and propaganda, which can benefit the world.

Another challenge is the global nature of the internet, which complicates legal action. Different jurisdictions have different legal standards for issues such as hate speech, defamation and privacy, and defenders often struggle to keep up with conflicting laws. For example, what is considered free speech in the US is considered hate speech in Germany, creating a complex legal environment for media operating internationally.

The increased use of artificial intelligence (AI) and automated content moderation systems by proxies will increase the risks. While AI can help platforms handle the volume of content delivered daily, it’s not without its flaws. Automated systems can identify content, remove appropriate postings, or prevent harmful content from being detected. The lack of clarity about how these systems work raises concerns about transparency, fairness and accountability.^[8]

Conclusion

The regulation of internet intermediaries remains a pressing and evolving issue in the global legal landscape. While the immunity provided by laws like Section 230 of the Communications Decency Act and the DMCA’s safe harbor provisions has been vital for the growth of the internet, these protections are increasingly being questioned in light of the significant influence intermediaries wield over public discourse and commerce. This paper has examined the key areas of intermediary regulation, exploring liability, immunity, and accountability within various legal frameworks.

A key takeaway is that the balance between liability and immunity must be carefully managed to prevent over-regulation, which could stifle innovation and free expression, while also ensuring that intermediaries do not escape responsibility for the illegal or harmful content they host. Emerging accountability mechanisms, such as content moderation policies and transparency reports, are steps in the right direction, but they require further refinement and oversight to ensure fairness, transparency, and effectiveness. Internationally, frameworks such as the EU’s Digital Services Act and India’s Information Technology Act provide valuable insights into the future of intermediary regulation, offering models that balance the need for innovation with robust protections against harm.

The challenges posed by jurisdictional conflicts, cross-border content, and the rapid pace of technological advancements, including artificial intelligence and encryption, highlight the need for a flexible and adaptive regulatory approach. Policymakers must carefully navigate the intersection of free speech, privacy, and public safety in crafting laws that hold intermediaries accountable without curbing the benefits of an open internet. The future of intermediary regulation will likely involve a mix of self-regulation, co-regulation, and targeted government interventions, aimed at fostering a safe, innovative, and democratic digital environment.

To enhance the article, we can incorporate a section discussing the existing legal framework governing internet intermediaries, analyzing how different jurisdictions approach intermediary regulation and the implications of these legal structures. Below is a suggested addition that outlines this in greater depth:

Legal Framework Governing Internet Intermediaries

Internet intermediaries operate within a complex and evolving legal framework that varies significantly by jurisdiction, reflecting differing cultural, political, and legal priorities. This framework typically balances intermediary immunity with certain obligations to manage harmful content, protect user privacy, and support regulatory goals. Here, we review key components of the legal frameworks in prominent jurisdictions, with a focus on the United States, European Union, India, and Brazil.

1. United States: Section 230 of the Communications Decency Act (CDA) and the DMCA

In the U.S., Section 230 of the CDA has been a foundational law in shaping internet intermediary regulation. Often referred to as “the law that created the internet,” Section 230 grants broad immunity to platforms, shielding them from liability for user-generated content as long as they do not directly create or significantly alter that content. This provision has enabled the rapid growth of online platforms by reducing the risk of legal repercussions over user actions, supporting free expression and innovation. Additionally, the DMCA’s safe harbor provisions protect intermediaries from copyright liability provided they comply with “notice-and-takedown” requirements. While both laws have been pivotal in promoting an open internet, they face growing scrutiny due to concerns over harmful content, disinformation, and election interference.^[9]

2. European Union: Digital Services Act (DSA) and the E-Commerce Directive

In contrast to the U.S., the European Union’s approach to intermediary regulation emphasizes accountability alongside immunity. The E-Commerce Directive of 2000 introduced intermediary liability exemptions similar to those in the U.S., but it also placed stronger obligations on platforms to act when notified of illegal content. The 2022 Digital Services Act (DSA) builds upon this framework by mandating transparency in content moderation practices, requiring platforms to conduct risk assessments, and obligating larger platforms to cooperate with regulatory bodies. The DSA reflects the EU’s commitment to balancing innovation with stringent protections against harm, making intermediaries more accountable for their role in online discourse.^[10]

3. India: Information Technology Act and Intermediary Guidelines

India’s regulatory framework combines aspects of intermediary immunity with an increasing emphasis on government oversight. Section 79 of the Information Technology Act, 2000, offers immunity from liability for third-party content, provided intermediaries follow due diligence requirements, such as implementing grievance redressal mechanisms. The 2021 Intermediary Guidelines and Digital Media Ethics Code further strengthen these requirements, obligating intermediaries to appoint compliance officers and quickly address content deemed illegal by the government. While these measures aim to curb disinformation and harmful content, they have sparked debates over government overreach and potential impacts on free expression.

4. Brazil: Marco Civil da Internet

Brazil’s “Marco Civil da Internet,” or “Internet Bill of Rights,” presents a unique model that enshrines both user rights and intermediary responsibilities. Enacted in 2014, this law provides immunity to intermediaries for user-generated content while promoting user privacy and transparency. The Marco Civil establishes clear guidelines for content removal and strengthens user data protection, but it also encourages a balanced approach by limiting government interference in content moderation. This model highlights a commitment to both free expression and accountability, with safeguards to prevent undue censorship and maintain user rights.

References

Communications Decency Act of 1996, 47 U.S.C. § 230.
Council Directive 2000/31, 2000 O.J. (L 178) 1.
Information Technology Act, No. 21 of 2000, INDIA CODE (2000).
A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004 (9th Cir. 2001).
MGM Studios Inc. v. Grokster, Ltd., 545 U.S. 913 (2005).
Zeran v. America Online, Inc., 129 F.3d 327 (4th Cir. 1997).
Viacom Int’l Inc. v. YouTube, Inc., 676 F.3d 19 (2d Cir. 2012).
Jeff Kosseff, *The Twenty-Six Words That Created the Internet* 1 (Cornell Univ. Press 2019).
Facebook, Community Standards Enforcement Report (2022).
Twitter, Transparency Report (2022), https://transparency.twitter.com.
Facebook, *Fact-Checking on Facebook: How it Works* (2022), https://www.facebook.com/business/help/2593586717571940.
Regulation (EU) 2022/2065, Digital Services Act, 2022 O.J. (L 277) 1.
Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, Gazette of India, Feb. 25, 2021.
Kate Klonick, *The New Governors: The People, Rules, and Processes Governing Online Speech*, 131 Harv. L. Rev. 1598 (2018).
Tarleton Gillespie, *Custodians of the Internet: Platforms, Content Moderation, and the Hidden Decisions that Shape Social Media* 45-50 (Yale Univ. Press 2018).
Lei No. 12.965, de 23 de Abril de 2014, DIÁRIO OFICIAL DA UNIÃO [D.O.U.] de 24.04.2014 (Braz.).

^[1] “DEPARTMENT OF JUSTICE’S REVIEW OF SECTION 230 OF THE COMMUNICATIONS DECENCY ACT OF 1996.” Department of Justice, April 2018, https://www.justice.gov/archives/ag/department-justice-s-review-section-230-communications-decency-act-1996.

^[2] Band, Jonathan, and Matthew Schruers. “Safe Harbors Against the Liability Hurricane: The Communications Decency Act and the Digital Millennium Copyright Act.” Cardozo Arts & Ent. LJ 20 (2002): 295.

^[3] Sumanjeet. “The state of e‐commerce laws in India: a review of Information Technology Act.” International Journal of Law and Management 52.4 (2010): 265-282.

^[4] Yannopoulos, Georgios N. “The immunity of internet intermediaries reconsidered?” The responsibilities of online service providers (2017): 43-59.

^[5] Ficsor, Mihaly, and J. Mihály. “The WIPO „Internet Treaties” and Copyright in the „Cloud”.” ALAI Congress. 2012.

^[6] Chiarella, Maria Luisa. “Digital markets act (DMA) and digital services act (DSA): new rules for the EU digital environment.” Athens JL 9 (2023): 33.

^[7] Kosseff, Jeff. The twenty-six words that created the Internet. Cornell University Press, 2019.

^[8] “About Fact-checking on Facebook, Instagram and Threads | Meta Business Help Center.” Facebook, https://www.facebook.com/business/help/2593586717571940?id=673052479947730.

^[9] Sharp-Wasserman, Julio. “Section 230 (c)(1) of the Communications Decency Act and the Common Law of Defamation: A Convergence Thesis.” Colum. Sci. & Tech. L. Rev. 20 (2018): 195.

^[10] Schwemer, Sebastian Felix. “Digital Services Act: a reform of the E-Commerce Directive and much more.” Research handbook on EU internet law. Edward Elgar Publishing, 2023. 232-252.

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