Nicolo Zingales (17/12/2021). Liability. In Belli, L.; Zingales, N. & Curzi, Y. (Eds.), Glossary of Platform Law and Policy Terms (online). FGV Direito Rio. https://platformglossary.info/liability/.
Author: Nicolo Zingales
See also intermediary liability.
Liability refers to a legally enforceable responsibility for a harmful event. Liability can be civil or criminal, which are fundamentally different concepts in their origin and nature: the former implies a responsibility from a financial perspective, which can be explicitly foreseen by a statute but also be the result of contractual arrangements; whereas the latter implies the commission of a criminal offence, and thus necessarily depends on the existence of a primary norm in the legal system establishing prohibited conduct (either active or passive). The primary goal of these two liabilities is also different, as the former is aimed to ensure compensation, while the latter aims at deterrence.
In the context of platforms and more generally of intermediaries, an important distinction should be made between primary and secondary liability: while the former requires the violation of a specific rule of conduct directed to the intermediary, the second arises from duties that are triggered by the conduct of third parties. However, there is some confusion in the use of these terms across jurisdictions, as the dividing line between primary (a.k.a. ‘direct’) and secondary (a.k.a. ‘indirect’) liability is not always clear-cut: several statutes attribute primary liability on intermediaries for the failure to prevent, or the implicit authorization of, third party conduct (e.g., the doctrine of ‘authorization’ in Australian and UK copyright law).
Terminological clarifications aside, two main justifications are used to impose secondary liability: participation and relationship. The latter is the one that can be most easily circumscribed, as it requires the existence of a specific relationship between the primary and secondary infringer, where the latter benefits from the harm and is sufficiently close in relationship to the primary wrongdoer. The best example of this is employment relationships (based on the principle of respondent superior), but the same rationale has been extended under the doctrine of vicarious liability to a range of scenarios where the secondary infringer had the right and ability to control the conduct of the primary infringer, and it is deriving financial benefit. It should be noted that the liability exemptions for hosts in the US Digital Millennium Copyright Act and in the European E-Commerce Directive specifically leave out circumstances where an intermediary had authority or control over a third-party activity, but the former also includes the additional requirement of deriving no financial advantage from such activity.
Participatory liability depends on the existence of a requisite degree of participation, which can range from mere facilitation to purposeful combination. In the UK, for instance, three types of participatory liability have been recognized: combination, authorization, and inducement liability. Combination is the most intuitive scenario, where two or more parties have a common design or enterprise, and the infringing acts are in pursuance or furtherance of that. Initially, this was interpreted strictly at common law to require an identity of concerted action to a common end; however, more recent cases adopted a more liberal approach requiring a combination (even tacit) to secure the doing of acts that eventually prove to be infringements. The doctrine has been used in Dramatico Entertainment Ltd v. British Sky Broadcasting (2012)1, to find that the Pirate Bay website facilitates its users’ infringement of copyright, on grounds that there were hardly any lawful uses of the site. Most recently, three limits to its expansion were identified in Fish & Fish Ltd v Sea Shepherd (2013)2. First, the common design will not be assumed simply because a person sells a product to another knowing that it is going to be used to commit a tort; second, there needs to be something more than just a close relationship between the parties; and third, approval of a person’s plan will not be sufficient in itself to give rise to common design.
Authorization liability implies a different form of participation consisting of (tacit or explicit) permission, or possibly an order, from a person having (or purporting to have) authority over the “immediate” wrongdoer. It requires sufficient knowledge of the relevant circumstances and the acts committed (or to be committed) by the primary infringer. In the UK, a court established in Newzbin (2010:1) that its application depends on a number of factors, such as the nature of the relationship between the alleged authorizer and the primary infringer, whether the equipment or other material supplied constitutes the means used to infringe, whether it is inevitable it will be used to infringe, the degree of control which the supplier retains and whether he has taken any steps to prevent infringement.
Finally, inducement liability requires a further degree of participation, including acts such as persuasion and encouragement, for an infringing purpose. For instance, it was recently the doctrine on the basis of which a bookmaker was imputed of secondary copyright infringement for providing its customers with a link where they could find a database of infringing information concerning live football matches. In US law, this is recognized in the field of patents and copyright, for those who distributes a device with the object of promoting an infringing use; however, such intent must be shown by clear expression or other affirmative steps taken to foster infringement, which is not always easy for a plaintiff. Famously, in Metro-Goldwyn-Mayer Studios Inc. v. Grokster (2005)3, the US Supreme Court found inducement liability for peer-to-peer software offered by Grokster based on three key factors: (1) efforts to satisfy a known demand for infringing content; (2) an absence of design efforts to diminish infringement; and (3) Grokster’s financial benefit from the activity.
Both in criminal and civil liability cases, a defendant can be subjected to an injunction, i.e., a court order that imposes given conduct – be it an action or inaction. This category of liability should be distinguished because, although it may arise in connection with the existence of intermediary liability, the cause of action is independent: the liability is attached to the failure of complying with the judicial order, rather than the responsibility for third-party conduct. It has thus been suggested that the appropriate term is one of accountability, as discussed in that definition.
Angelopoulos, C. (2020). Harmonising Intermediary Copyright Liability in the EU: A Summary. In: Frosio, G. (2020). Oxford Handbook of Online Intermediary Liability. Oxford University Press.
Arnold, R., Davies, P. S. (2017). Accessory liability for intellectual property infringement: the case of authorisation. The Law Quarterly Review, 133(Jul), 442-468.
Catty, H. (1999). Joint tort feasance and assistance liability. Legal Studies. 19(4). 489-514.
Davies, P. S. (2015). Accessory Liability (vol. 13). Bloomsbury Publishing.
Dinwoodie, G. B. (2017). A comparative analysis of the secondary liability of online service providers. In: Secondary Liability of Internet Service Providers. 1-72. Springer, Cham.
Jaani, Riordan. (2020). A Taxonomy of Intermediary Liability. In: Frosio, G. (2020). Oxford Handbook of Online Intermediary Liability. Oxford University Press.