Can India's intermediary framework regulate AI tools?

The Calcutta high court’s recent decision in Indiamart Inter Mesh Ltd vs OpenAI Inc may appear at first glance to bear a routine intellectual property dispute.

- HUZEFA TAVAWALLA & TANNVIR.

An e-commerce platform alleged that ChatGPT’s responses were bypassing its listings and sought relief on grounds of dilution, disparagement and unfair trade practices. The court declined interim relief. But the real significance of the case lies elsewhere. In assessing how ChatGPT functions, the court engaged with a larger question: can India’s intermediary liability framework, designed for a different era, meaningfully be applied to Generative AI? The answer, on the face of it, seems uncertain.

From passive platforms to generative systems: India’s intermediary framework under the Information Technology (IT) Act of 2000 was built on a stable understanding of how the internet works. Platforms were classified based on functions such as hosting content, transmitting data or facilitating transactions. The safe-harbour provision of Section 79 protected such entities so long as they remained conduits of third-party information. The system rested on a simple assumption: the platform does not create any content; it enables access to it.

Generative AI disrupts that assumption. Large language models (LLMs) ingest vast datasets, apply probabilistic models and generate synthesized responses to assorted user queries. The output is not a list of links, but an answer, often authoritative in tone and sometimes entirely novel. This distinction is legally consequential. Once an online platform begins generating content rather than merely transmitting it, the foundation of intermediary law changes.