Civil Liability of Intermediaries

The exchange of billions of dollars in money and goods each year in the field of e-commerce provides sufficient motivation for encroaching upon the rights of others. Such encroachment, at times, is deemed a criminal offense under electronic commerce laws, with prescribed penalties. In other cases, it can simply give rise to civil liability, whether contractual or tortious in nature. In contractual realms, a breach of contract accompanied by resulting harm can easily establish liability. However, in non-contractual realms, proving fault is not as straightforward for users and consumers of electronic services, which in turn provides a platform for service providers to exploit and engage in improper actions against users. Therefore, we must seek solutions to identify various harms and, by establishing liability for service providers and e-commerce entities, prevent such damages to users. Failure of the legal system to address this issue over time leads to a loss of user trust and a decline in the use of this domain, resulting in economic losses in e-commerce.

One of the institutions whose liability should be examined in the field of e-commerce is intermediaries. "Intermediary" is a term that has been chosen by the regulations governing information service providers and internet entities. This term is the equivalent of the English expression "ISP" or "Internet Service Providers." Intermediaries provide a range of online and offline value-added services to their users and can offer various informational and communication services within the boundaries of laws and regulations.

The legal system in Iran, following European guidelines and those of many other countries, obliges intermediaries to comply with certain rules and regulations aimed at protecting users. Any deviation from these rules is identified as a harmful act and a detrimental element. In the following discussion, we will address these issues.

  1. Liability of intermediaries regarding website content:
    Those websites that engage in receiving orders and advertising must exercise caution to prevent the dissemination of false information, presentation of misleading content, distortion of facts, etc., which could result in harm to third parties. This issue is particularly critical for companies that provide specific information to users, such as those involved in supplying pharmaceutical, healthcare, and financial services, and depending on the applicable law, it may lead to the suspension or cessation of their activities.

Furthermore, intermediaries must respect the intellectual property rights of third parties in their data. Failure to do so will result in civil liability arising from the infringement of rights, which will be the responsibility of the website owner.

  1. Liability of intermediaries for unauthorized access to trade secrets:
    Some intermediaries may need to access content related to individuals in order to carry out their activities. If this content contains trade secrets, intermediaries will be responsible for any breach of information or disclosure thereof.
  2. Liability of intermediaries for viruses:
    Since viruses can cause financial harm, website owners must take necessary precautions to prevent the dissemination of viruses and avoid liability. It is important to note that intentionally distributing viruses is a criminal act and subject to punishment. However, the absence of intent does not absolve legal liability.

Methods for Liability Reduction:

Given the broad scope of intermediaries' activities and the potential increase in their liability, the following solutions are proposed to limit and reduce the liability of intermediaries:

  1. Continuous inspection: The website owner should conduct regular inspections of all online activities of their employees to ensure compliance and reduce potential liability.
  2. Online complaint handling: Providing an online mechanism for addressing user complaints and criticisms can help intermediaries promptly address user concerns and prevent the escalation of issues.
  3. User agreements: Implementing user agreements that clearly state that users are solely responsible for any changes or additions they make to the website's content can shift the overall liability for such modifications to the users rather than the intermediaries.
  4. Employee training: Ensuring that employees receive proper training on respecting the rights of third parties and preventing the expansion of intermediary liability can be an effective measure.
  5. Insurance coverage: Obtaining insurance coverage that aligns with the nature and activities of the website can transfer the risk of liability and damages to the insurance company. This can significantly reduce the scope of liability for intermediaries.

By implementing these methods collectively, intermediaries can effectively reduce their liability. It is important for intermediaries to seek legal and insurance advice to determine the most appropriate strategies for mitigating their liability.