Get limited liability

//Get limited liability

In the past, various Internet service providers (ISPs) and publishers have been held liable for the unlawful action of others. For example, ISPs have  been held liable for the data hosted on one of their servers by a customer. So, a user opens a hosting account with an ISP and puts up a website on one of the ISPs servers that defames a company. The company decides to sue the ISP rather than the user. Another example is where the content on one of the websites on one of the ISPs servers infringes the copyright of another company.

This doesn’t seem fair does it?  The ISP might not even be aware that the content exists.  If ISPs where held liable for all unlawful acts, it would be an untenable situation.

Are ISPs liable for content displayed on their websites?  Should ISPs be exempt from all liability?

Well, it is possible for certain Internet service providers to get limited liability at a low cost courtesy of the law. Sounds too good to be true, doesn’t it?  Well it’s not.

Chapter XI of the Electronic and Communications Transaction Act (ECT Act) deals with the limitation of the liability of service providers (or Internet service providers) in cases where they may otherwise have been liable for third party content.  Chapter XI thus creates a safe harbour for online service providers who were previously exposed to a wide variety of potential liability by virtue of merely fulfilling their basic technical functions.

Who is an Internet Service Provider?

It is basically those who make the Internet available to users. Chapter XI defines a “service provider” to mean any person who provides information system services. An “information system” is defined as:

a system for generating, sending, receiving, storing, displaying or otherwise processing data messages and includes the Internet“.

So basically anyone who provides Internet services – an Internet service provider.  An “information system service” includes:

  1. the provision of connections
  2. the operation of facilities for information systems – for example, hosting services
  3. the provision of access to information systems – for example, Internet access
  4. the transmission or routing of data messages between or among points specified by a user – for example, mail relay
  5. the processing and storage of data, at the individual request of the recipient of the service

Internet service providers are eligible for limited liability.

If your business provides any of those services, then you are an Internet service provider.  If you don’t do one of the things specially mentioned, you might still be a Internet service provider, but it might be harder to prove.  Internet service providers are eligible for limited liability.

There are conditions attached

There are always conditions attached to good things. In this case, there are two main conditions:

  1. the ISP must be a member of a representative body recognised by the Minister; and
  2. the ISP must have adopted and implemented the official code of conduct of that representative body.

There was much excitement when on 20 May 2009, the Internet Service Providers’ Association (ISPA) was recognised by the Minister as a representative body. You can read their press release for more information. If you want limited liability (who doesn’t?), then you should become a member of the Internet Service Providers’ Association (ISPA) and adopt and implement their official code of conduct. You can find out about their membership fees and apply on their web site.

I wonder if the Digital Media and Marketing Association (DMMA) (previously known as the Online Publishers Association (OPA)) has applied to the Minister to be recognised as a representative body under the ECT Act. If it hasn’t, then it should.

Then there are also further conditions or requirements in each of the relevant sections of Chapter XI of the ECT Act. Read them carefully.

A limitation of liability clause

ISPs should also exclude or limit their liability, for content displayed on websites they host, contractually in their website terms and conditions or Terms of Service.

By | 2017-12-07T07:01:39+00:00 May 27th, 2012|Categories: Contracts|Tags: , |