An Indian Supreme Court hearing starting Monday on whether the local unit of Google Inc. is liable for allegedly defamatory comments made on its blogging site, will help decide how Internet companies do business in the growing south Asian market.
The Supreme Court is scheduled to start hearing arguments from the U.S. tech giant on Monday in the case brought by Visaka Industries Ltd., a construction materials company, which claims an activist used the Google blogging site Blogspot.com to spread false information about Visaka
Google lost the case in a High Court and appealed to the Supreme Court, saying it should not be held responsible for everything on its sites as it cannot control what users post.
Other search engines, blog sites, social media sites and even online retailers could be affected by the outcome of the case, lawyers said. The hearing could take months before a final judgment is delivered.
“People may not even roll out new products,” in India, depending on the outcome of the case, said an executive at a global technology firm. “It’s not worth the effort of investing.”
Google India argues that it can’t be held liable for content posted by users on a platform which is hosted by its parent company Google Inc.
Google Inc. didn’t immediately respond to an email seeking comment on the case.
India represents one of the last great untapped markets for Internet companies. The number of Internet users in Asia’s third largest economy is likely to jump to more than 500 million by 2015 from around 200 million today, according to an estimate by consulting firm McKinsey and Co.
The case against Google was brought by Visaka Industries–a company based in the southern Indian city of Hyderabad which makes corrugated cement and asbestos fiber sheets—after an anti-asbestos blog hosted by Google’s Blogspot.com contained allegations that Visaka was being protected because it was backed by leaders of the ruling Congress party.
The author of the post Gopala Krishna said he still stands by his post, though he hasn’t been formally informed of the charges or the case.
“Whatever Google has said (in court) has supported freedom of expression,” Mr. Krishna told The Wall Street Journal. “They have done the right thing by not removing the content.”
A spokesman for the Congress party could not be reached for immediate comment.
Visaka said it had no connection to the party and filed a case charging Google India with criminal conspiracy, defamation and publishing content which is defamatory.
Google India challenged the charges at the High Court in the Southern Indian State of Andhra Pradesh and lost in 2011. It appealed to the Supreme Court which is beginning hearings on Monday.
If Google loses again it will be “liable for criminal activities on its network,” and have to step up its monitoring of what goes on online in India “Exercising of due diligence is a critical aspect for limiting liability of intermediaries.”
Google managers could be punished with up to life imprisonment and fines from 100,000 rupees ($1,595) to 1.0 million rupees and could also be asked to pay damages of up to 50 million rupees per violation.
India has started restricting Internet freedom in recent years, raising concerns among free speech activists.
In 2009 it amended its laws to hold Internet firms liable for “offensive,” “defamatory” or “blasphemous” content. The amendments have been challenged in the Supreme Court but it has yet to rule.
In 2011, India’s technology and telecommunications minister Kapil Sibal urged Internet companies to take down derogatory content from their websites
India needs to loosen these rules, regulations and political pressures or risk missing out of the Internet revolution, said Mishi Choudhary executive director of the Software Freedom Law Center based in New Delhi.