SaaS Agreements – Liability – Online Comments

New proposed UK defamation laws recommend that web hosts (SaaS suppliers) and ISPs (internet service providers) should be allowed to keep allegedly defamatory comments online, as long as the author of the comment is identified and a notice of complaint is published next to the comment.

Current Law and Liability

Currently web hosts and ISPs must immediately remove online comments upon gaining actual knowledge that the comments are defamatory. Failure to remove defamatory comments exposes the web host/ISP to a claim for damages for defamation. Actual knowledge is deemed to occur once the web host/ISP is informed that the comments are defamatory or the web host/ISP moderates comments on the website.

Under the E-Commerce Regulations SaaS suppliers are usually exempt from liability for defamation if they merely act as conduit or cache or host material, provided that they:

  • do not initiate the transmission of defamatory comments;
  • do not select who receives the comments; or
  • do not select or modify information in the transmission of the comments.

New Proposed Rules

Currently most web hosts/ISPs do not moderate comments or content on websites in order to take advantage of the exclusion set out above. Thus they avoid having “actual knowledge” of any defamatory comments on websites that they host.

The proposed change to defamation laws aims to incentivize web hosts and ISPs to moderate comments and/or content. SaaS suppliers should comply with the rules set out below taking into account the new distinction between anonymous and identified author comments.

Anonymous Comments

Upon receipt of a complaint a SaaS supplier should immediately taken down anonymous comments unless;

  • the SaaS supplier believes that it is in the public interest for the material to remain on the website i.e. whistle blowing; or
  • the author promptly responds positively to a request to identify themselves, then a notice of complaint should be posted.

Identified Author Comments

Upon receipt of a complaint a SaaS supplier should;

  • publish a complaint notice beside the comment; and
  • then have a judge decide whether or not the comment should be removed.

Avoiding Liability

If a SaaS supplier complies with the above rules they should not be liable for online comments. However, if the SaaS supplier fails to comply with the above, they could be sued as publisher of the content or comment along with the anonymous author – who may not be identifiable.

Regardless of whether or not the proposed changes are implemented, SaaS suppliers should always include a clause in their SaaS agreement permitting them to remove content from customer websites they are hosting in order to enable them to minimise the risks of being pursued for a defamation claim.

Help

Irene Bodle is an IT lawyer specialising in SaaS agreements with over 10 years experience in the IT sector. If you require assistance with any SaaS, ASP, software on demand contracts or any other IT legal issues contact me:

irene.bodle@bodlelaw.com
www.bodlelaw.com

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