The Internet has had a major impact on the world of computing, communications, business, and the way people connect with each other. Naturally, it could not be long before its enormous potential for the development of e-commerce was discovered. Different segments of industry and service providers found on the Internet a tool to reduce purchasing costs and to speed up procurement, logistics and inventory and production planning relationships.
This new form of commerce has given rise to the phenomenon of the “virtual company”, which, through computer networks, advertises its goods and services, carries out its transactions and also links up with other companies.
Internet intermediaries
The presence and role of internet intermediaries has been central to users’ access and use of content on the Internet. Examples of types of Internet intermediaries include Internet service providers, search engines, social networks, cloud service providers, e-commerce platforms, hosting companies, domain name registries, among others.
E-commerce service providers are those who, through the use of technological resources, make available, mediate, or operate an environment or platform that enables commercial transactions and activities to be carried out between third parties.
The main service provided by digital e-commerce platforms consists of technological intermediation that enables users of the system to exchange goods and services. On these digital platforms, thousands of legal relationships take place on a daily basis, most of them consumer relations, which produce different legal derivations, particularly when it comes to determine the liability of the owner of the platform in the event of damage to the rights and interests of third parties.
The liability of Internet intermediaries for content provided or activities carried out by third parties is a matter of debate.
Different liability regimes are distinguished. The “absolute immunity regime” which stipulates that no intermediary should be liable for illegal content posted or shared by individuals on their platforms. The perceived disadvantage here is that intermediaries have no incentive to monitor, block or filter content, creating an ideal scenario for affecting rights.
The “strict liability regime” where the intermediary is liable for content generated by third parties and published on its media, regardless of whether or not it had knowledge of that content.
The “subjective liability” model wich poses the need to analyze the intermediary’s conduct in order to determine whether he has taken all the necessary precautions to remove the content deemed illegal or whether he has been negligent. The criterion for judging fault on the part of the platform arises from the moment in which it becomes aware of the unlawfulness of the published content and, despite this, omits to block or remove it. The intermediary’s liability arises when it does not remove the unlawful content from its database, once it has been notified of this by the injured party.
The evolution of jurisprudence in Argentina
Argentina does not yet have a legal framework that provides a specific solution to this issue, but it does have valuable jurisprudential precedents that have contributed to providing a legal framework that confers some certainty.
One of the first precedents in the debate on the liability of intermediaries is the case “Claps, Enrique vs Mercado Libre SA” decidedy the National Civil Court of Appeals, Chamber K, on October 5, 2012. The Chamber condemned Mercado Libre, holdingthat the owner of the online sales marketplace is obliged to guarantee the effective fulfilment of the contracted service to those who contract through its platform. This means that it must respond in the event that the service is not provided. The court added that the owner of the platform receives a compensation for the publication, or for the sale, which shows that the company not only profits from the space it provides to users, but also from the transactions they carry out.
In the field of industrial property, the precedent that reached relevance was the case in which Nike International Ltd. filed lawsuit against Compañía de Medios Digitales S.A. claiming the cease of use of its well-known trademarks “Nike and design” and compensation for damages. In order to resolve the dispute, Chamber III of the Federal Civil and Commercial Court on May 21, 2015, held that when an operator assists in optimizing the presentation of sales offers or in promoting such offers, it has not occupied a neutral position between the client-seller and the potential buyers. On the contrary, it has played an active role that allows it to acquire knowledge or control of the data relating to those offers.
The judgment affirmed that the grounds for liability lay in circumstances that had been proved in the case: (i) the defendant’s websites had favored and increased the commercialization of counterfeit products, through electronic sales on a very large scale, and (ii) the advertisements and transactions referring to counterfeit products were evident from mentions such as “not original”, “excellent quality replicas”, etc., and also from the simple observation of the prices or quantities offered.
It is clear from this precedent that the discussion begins to identify the degree of participation that the platform may have had in each particular e-commerce operation. The question to be resolved is to determine whether the platform in question played an active role or a merely passive or neutral role in the infringement of a right.
Another step forward was taken by Chamber D of the National Chamber of Commercial Appeals when it ruled in “Kosten, Esteban vs Mercado Libre SRL” on March 22, 2018. In this precedent, the Chamber ruled that: (i) an exemption from liability of the operator of an electronic marketplace for online sales or auctions may be admitted when it has not played an active role that allows it to acquire knowledge or control of the data stored, i.e. when it has merely provided a forum for a transaction between a buyer and a seller, (ii) such an exemption is based on the fact that the operator cannot be held liable when it effectively acts as a mere intermediary, i.e. by adopting a neutral, purely technical and passive position between the recipients of the service (buyer and seller), which makes it impossible for it to have knowledge and control of the information stored.
Another more recent precedent is “Iglesia Mesiánica Mundial, Sekai Kyusei Kyo, en la Argentina vs Mercado Libre SA”. The plaintiff filed a lawsuit for plagiarism against the material author of the alleged plagiarism, against the distribution company involved in the distribution chain of the book in question, and Mercado Libre, which had facilitated the uploading of the book by the defendant Mr. Ferrari through its virtual platform. Based on the “Kosten” precedent, on March 28, 2022, the Civil Chamber considered that Mercado Libre was exempt from liability as it was an operator of an electronic marketplace without having played an active role that would allow it to acquire knowledge or control of the stored data. The court stated that the electronic marketplace operator could only be held liable if it had or could have had actual knowledge of the unlawful nature of the offer, or if, having acquired such knowledge, it did not act with the diligence required to withdraw the publication. It follows the line that this is a “subjective” liability due to the intermediary’s own actions.
Conclusions
These precedents set out a clear path for the resolution of future cases in this area, applying the factor of attribution of subjective liability. In all cases, liability will be attributed to an omission or inadequate or unjustifiably late removal of content, or the failure to adopt preventive measures to block it.
The search for solutions to this issue requires balance and prudence in order to delicately harmonize all the relevant interests involved. Any solution that turns the platform owner into a sort of guarantor and jointly and severally liable for everything that is traded on the platform will end up affecting this type of commercial operation, and the main losers will be the suppliers of goods and consumers who intend to market their products through this simple and inexpensive modality. Any legislative treatment of the issue should take into account the judicial precedents that have sought to maintain a healthy balance between the interests at stake.
This report cannot be considered as legal or any other kind of advice by Allende & Brea.
