Google is all set to challenge the Indian laws and various provisions under them that are making it answerable to Indian courts and liable under various legal frameworks. The online defamation case of Google is already pending before the Supreme Court of India. Similarly, various cases filed against Google under the Information Technology Act, 2000 (IT Act 2000) are also pending in various Courts.
Google has a single defence against all these alleged civil and criminal violations. It has been maintaining that all the accusations and liability can be imputed to the parent company that is situated in United States (US.). Since Google’s parent company is subjected to U.S. laws, it is neither amendable nor answerable to various Indian laws and their compliances.
This stand is occasionally taken before various Courts in India whether it is a civil or criminal case. Google’s subsidiary argument is too week to stand any trial yet Google has been winning from time to time. Google is also winning despite the fact that there are clear cut violations of Indian laws like IT Act, 2000. Google is an Internet intermediary within the meaning of IT Act, 2000 and it is also required to comply with cyber law due diligence requirements (PDF) for having strong virtual and physical contacts in India. Even advertisement revenue is also earned by Google from Indian activities.
In these circumstances claiming that Google is not liable under Indian laws is not legally tenable. It is high time for Indian courts to remove the façade of subsidiary and make the parent company liable under Indian laws. Websites like Facebook and Google are liable to pay taxes under Indian laws as they generate huge revenue through agreements with Indian advertisers as well as sale of games and applications to internet users here.
Google India has contended in its affidavit that it “is not providing any taxable services in India, neither has a permanent establishment in India nor is it earning any income which is arising from or accruing in or deemed to be arising or accruing from India. “Furthermore, Google is not receiving any payment in the nature of ‘royalty’ which may be taxable either under the relevant Indian laws or under the Double taxation Avoidance Agreement between India and USA.”
We at Perry4Law believe that all Subsidiary/Joint Ventures Companies in India, especially those dealing in Information Technology and Online Environment, must mandatorily establish a server in India. Otherwise, such Companies and their Websites should not be allowed to operate in India. The Ministry of Home Affairs, India and Intelligence Bureau (IB) are already exploring this possibility.
A “Stringent Liability” for Indian Subsidiaries dealing in Information Technology and Online Environment must be established by Laws of India. More stringent online advertisement and e-commerce provisions must be formulated for Indian Subsidiary Companies and their Websites.