Karnataka government is challenging Snapdeal's safe harbour protection in the Supreme Court. The case pits Section 79 of the IT Act against public health laws, specifically the Drugs and Cosmetics Act. The outcome could reshape how online platforms handle sales of prescription drugs across India.
How We Got Here
The Karnataka High Court had quashed criminal proceedings against Snapdeal in 2021, ruling it deserved safe harbour under Section 79 of the IT Act. The High Court also stated an intermediary and its directors cannot be held criminally liable for third-party vendor actions.
The Numbers
- The state alleges third-party seller Herbal Healthcare sold Suhagra-100, a Schedule H prescription drug, via Snapdeal without a licence or prescription.
- Karnataka's AAG Aman Panwar argued safe harbour should not extend to prosecution under the Drugs and Cosmetics Act, 1940.
- The state further contends Snapdeal failed its due diligence obligations under Section 79 by not ensuring compliance for prescription drug sales.
- The Supreme Court issued notices to Snapdeal, its co-founders Kunal Bahl and Rohit Kumar Bansal, and Herbal Healthcare.
- The next hearing in the Supreme Court is scheduled for August 10.
What Happens Next
🇮🇳 Why This Matters for India
Founders building healthtech platforms and e-commerce product managers in Hyderabad face significantly higher compliance costs if this precedent shifts.
The Take
The real loser here is the perceived impunity for online pharmacies hiding behind intermediary status. This Supreme Court challenge forces a reckoning for platforms, which will likely mean higher compliance costs and fewer third-party health vendors.
Source:
MediaNama ↗