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Ad-fraud – intermediaries and the safe harbour protection.



The IT act provides safe harbour protection to intermediaries as per the amended Section 79 of the act.  The genesis of this protection is to give a benefit of doubt to the intermediaries as they don’t have any editorial control on such information which they purely disseminate to the audiences.  However, the rule is not without exceptions!

One of the key conditions of safe harbour protection is adherence to a sub-section provision [Sub-section 2(b)ii] which reads that the intermediary should not select the receiver of the transmission.  The provisions further lay that the intermediary should observe due diligence.

Source: SLFC ebook on IT Act 2000

By the wider definition of intermediaries, all sorts of publishers also fall in it and they publish ads of advertisers.  The publishers do not have editorial control on the advertisement content.  But at the same time, they select the receiver of the ads. That is target marketing, one of the key advantages of digital marketing.

In the backdrop of definition of intermediaries and the safe harbour protection provisions, publishers – owners of digital platforms which publish content as well as display ads, are very much responsible for the ads that are displayed and, since they select the recipients of these ads, the safe harbour protection ceases.  At the same time, rarely any publisher goes for due diligence in the form of ad-fraud protection services.

So, any ad, which appears on a publisher site having an ad-fraud issue, which may go as serious as a malware installation on a smartphone, laptop, or PC and now even Smart TVs, goes against the IT law and its provisions.

The publishers along with advertisers and their digital agencies must ensure together that they do not become the carriers of and ad-fraud which harms beyond monetary loss for the advertisers.  Such ads are responsible for misinformation as well as a threat to privacy of data of the digital audiences which engage with it.

At the government has time and again explicitly and strongly expressed its views about intermediaries requiring abiding by law of the land, it is equally important that ad-fraud is also brought into the purview of key concerns such as dissemination of fake content, infringement of IP and bogus engagement.  In fact, ad-fraud leads to all these concerns.

In India, we see average ad-fraud rate of 27.8% across leading sectors spending on digital advertising.  While businesses are primarily focused on plugging this monetary loss, the government has to get deeper in the issue that snowballs to potentially all vices that can occur over digital platforms.

Safe harbour protection is an enabling provision of the IT act which is based on just reasoning that the intermediary would not have any control on what passes through its platform.  But digital ads do not exactly fit into it.  They are controlled by the intermediaries when they target them as per the audiences and communities they configure while serving these ads.  The issue becomes more challenging with AI playing the role of defining audiences intelligently to deliver the best of the ROI to the advertisers.

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