Internet Regulation-Economist Article
A JURISDICTIONAL TANGLE
Media companies around the world are alarmed by a
high-court ruling in
Australia
A RULING by Australia's high court on Tuesday December 10th has further
complicated the already murky question of which laws and whose courts have
jurisdiction over the Internet. In a closely watched libel case, the court
has
confirmed a lower-court ruling that Dow Jones can be sued in the
Australian
state of Victoria over an article that appeared on its website. The court
rejected the American company's claims that any libel action should be
heard in
New Jersey, where its web servers reside. A range of media groups and
Internet
firms--including CNN, Yahoo!, the NEW YORK TIMES, the WASHINGTON POST,
Britain's GUARDIAN, Reuters and Amazon--had joined the case on Dow Jones's
side, fearing that a ruling against the firm would set an important
precedent
which could make all Internet publishers open to lawsuits in any of the
190
countries where the Internet can be accessed and so curb free speech
everywhere.
The case has been brought by Joseph Gutnick, a wealthy Australian
businessman,
over an article in BARRON'S, a weekly financial magazine and corporate
cousin
of the WALL STREET JOURNAL, Dow Jones's main publication. Mr Gutnick
objected
to an article in the October 2000 issue that appeared both in print and on
Dow
Jones's popular Internet site. The article claimed that Mr Gutnick was
"the
biggest customer" of a convicted money launderer. Melbourne-based Mr
Gutnick
sued Dow Jones in the state court of Victoria, which has some of the
severest
libel laws in any established democracy.
Dow Jones acknowledged that it had several hundred online subscribers in
Victoria, but argued that the case should be heard where the articles were
"published" and said that publication took place when the article
was
uploaded
to its computer servers in New Jersey, where Mr Gutnick's chances of
winning a
libel suit would be much slimmer. The Victoria court ruled that, in fact,
publication also took place in Victoria when the articles appeared on
subscribers' computer screens, and so the case could be tried locally. Dow
Jones appealed. The Australian high court has now confirmed the earlier
ruling.
Mr Gutnick will be able to pursue his case in the lower state-court.
This is just the latest in a string of cases in which courts worldwide
have
struggled to cope with the question of who has jurisdiction in the
borderless
domain of cyberspace. These have involved not just defamation, but
criminal law
as well. The most celebrated has been a case brought against Yahoo!, an
Internet portal, for the sale of Nazi memorabilia on one of its auction
websites, which a French court ruled breached French law against the
its
auction sites, it has continued to fight enforcement of the French ruling
display of
Nazi insignia. Although Yahoo promptly banned all hate paraphernalia from
in
American courts. It has won its case in an American federal court on the
grounds of America's first amendment free-speech protections, but French
civil-rights campaigners have appealed, and the case is now being heard by
a
federal appeals court.
In a more ominous development, Andrew Meldrum, an American reporter, was
prosecuted this year by Robert Mugabe's repressive government in Zimbabwe
for "publishing a falsehood" in an article published on the website
of the GUARDIAN. Mr Meldrum (who also writes for THE ECONOMIST) was ultimately
acquitted of the charge, but the Zimbabwe court had no hesitation about claiming
jurisdiction in the case, and Mr Meldrum faced the possibility of two years
in jail. It is the possibility of global liability, in both criminal and defamation
law, which now worries big media companies.
However, the outcome of the Australian
case may not be as damaging as these
companies fear. For one thing, it was not much of a surprise. Settled law
in
most countries has long allowed defamation suits to be brought against
publishers wherever their publication is circulated, irrespective of where
they
based their operations or did their printing. For example, Britain, where
libel
laws have long favoured the plaintiff, has always been a favourite forum
for
such suits, even against foreign newspapers with minimal circulations in
Britain. Similar cases in the United States have allowed plaintiffs to sue
locally, though no American state libel laws are as restrictive of press
freedoms as British laws.
In the Australian case, the high court limited its ruling by saying that a
libel action could be brought only if the person had a reputation in the
place
where the material was published, in this case Mr Gutnick's home city of
Melbourne. If the ruling is followed as a precedent by other nations'
courts,
as publishers fear, then this limitation alone could stop a frenzy of
jurisdiction-shopping by plaintiffs. Moreover, libel cases are expensive
to
pursue. The threat of a wave of cases may be more theoretical than
realistic.
Not many people have the deep pockets of Mr Gutnick, who made his money in
mining.
Nevertheless, one thing the Gutnick case does highlight is that national
laws
in a wide array of areas, not just libel, now seem to be out of step with
the
realities of the Internet. This tangle will take years to sort out, and is
likely to require unprecedented co-operation among national governments,
in
criminal law enforcement as well as civil lawsuits.
In the case of libel itself, there seem to be two obvious paths, but both
are
fraught with difficulties. Governments might agree international rules for
libel. But with different traditions on how much latitude a free press
should
have, reaching agreement is bound to be difficult. Alternatively,
technology
may yet come to the rescue. Software that allows websites to identify the
geographical location of a visitor is becoming ever more refined.
Eventually,
it may allow publishers to block access to anyone in certain countries
where
libel laws pose too much of a risk. The use of such blocking
software--which is
also being deployed by repressive governments such as China's and Saudi
Arabia's--might well offer publishers a persuasive legal defence in libel
lawsuits, even if users found a way to obtain an offending article.
Many publishers and Internet enthusiasts will view the spread of such
technology as a tragedy, fragmenting the Internet just as it promises to
be an
engine for global free speech and creativity. But the technology might
also
push governments into relaxing their restrictions on speech and
publication.
Voters in Melbourne are unlikely to be happy to discover that they cannot
access mainstream websites because of the severity of their local libel
laws.
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