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Internet Libel Laws In Limbo
Internet Libel Laws in Limbo
Case Study: Dow Jones Sued in Australia
Overing: Defining Jurisdiction on the Internet
A battle is being waged to determine which laws should apply on the Internet

An Internet libel jurisdiction case currently awaiting a decision in Australia's highest court represents another front in the battle being waged to determine which laws should apply on the Internet.

"If an American publisher publishes material about a foreigner, they would have to get legal advice in every jurisdiction where the subject might have a reputation," says Matthew Collins.

At issue in the Dow Jones v. Gutnick case is how publication is defined in cyberspace: Whether material is published when it is uploaded onto computer servers, or when it is downloaded by readers. The distinction is important because it helps determine which country or state's libel laws should apply tothe published material.

At the heart of this case is a libel suit filed in the Australian state of Victoria by prominent Melbourne businessman Joseph Gutnick, who claims he was defamed by a Barron's article linking him to a jailed money launderer. The article appeared in the American newspaper's print edition and on its Web site, which can be read by subscribers around the world.

The publisher, Dow Jones & Co. Inc., filed a motion to move the case from Melbourne to New Jersey, where its Web servers are located. When the motion was denied, Dow Jones appealed to Australia's High Court, which heard the case in late May.

The lower court's ruling effectively means that "each time material is downloaded, it will enliven the defamation laws of the place where [downloading] occurs," says Belinda Thompson, a Melbourne-based defamation lawyer.

This is significant because Australia, like many countries with no equivalent to the First Amendment, has stricter libel laws than the United States. There are also other relevant differences in the countries' laws: Australia has no single-point-of-publication rule, for example. More worrying still is that some countries have laws that are completely incompatible with the most cherished U.S. Constitutional protections: in Zimbabwe; for example, journalists can be imprisoned for criticizing the government.

Worried that a ruling in Gutnick's favor would expose them to a multitude of difficult-to-defend foreign libel suits, more than a dozen international media and Internet companies (including CNN, Yahoo and The Washington Post Co.) joined the case in support of Dow Jones. (Persons posting news and information on the Web who don't consider themselves "publishers" in the traditional sense but are simply posting their expressions would be equally exposed. However, the odds of someone bothering to sue individual Internet user across national borders are much slimmer.)

Legal experts following the case say it could set an important international precedent because it is the first time a nation's highest court has been asked to define where publication takes place on the Internet for libel purposes. Judges in other British Commonwealth countries, including Britain, Canada and South Africa, though not bound by this decision, would likely look to this case for guidance when deciding similar cases in the future. 

The judge who denied Dow Jones's motion to move the case to the United States ruled that the Internet was fundamentally no different from other media. Therefore, longstanding British and Australian common law -- stating that publication occurs at the point where material is read and understood -- should hold.

Bret Walker, the lawyer representing the companies that intervened on Dow Jones's behalf, disagrees. Whereas print and broadcast material can be disseminated in a controlled fashion, there is an "indefinite ubiquity" to the Web. "What you publish can go anywhere and everywhere without you knowing where it's being received," he says.

If the Australian judge's ruling stands and is applied  elsewhere, it could tie publishers' hands, because they wouldn't know in advance what laws would prevail, Walker says. Many legal experts agree, saying the end result could be widespread self-censorship.

"If an American publisher publishes material about a foreigner, they would have to get legal advice in every jurisdiction where the subject might have a reputation," says Matthew Collins, a Melbourne lawyer and author of "The Law of Defamation and the Internet." If the subject is a globally recognized company such as Coca-Cola, it could in theory lodge such a suit anywhere.

"It would be more likely the publisher would simply drop the story," Collins says.

Because Barron's is a subscription-based Web site, it has been argued that unlike publishers of free Web sites, Dow Jones could exercise some control over which of its articles can be read by subscribers in which countries.

But Ian Ballon, a Palo Alto, California, lawyer and author of "E-Commerce and Internet Law" says software designed to restrict site access in specific countries remains "imperfect." Besides, he adds, resorting to such restrictive methods would be "unfortunate for the development of the Internet."

Without common laws, "publishing [across borders] is a leap of faith," says Lee Tien, senior staff attorney for the San Francisco-based Electronic Frontier Foundation. And the potential for conflict, he adds, "goes beyond defamation to include [issues such as] obscenity and terrorist threats, for example."

Conversely, a ruling in Dow Jones' favor could encourage "forum shopping," where publishers locate their Web servers in countries with the freest communication laws in order to avoid libel prosecution in their own countries, says Belinda Thompson.

In practical terms, Ballon says the potential difficulty of enforcing a foreign judgment sometimes acts as a deterrent to would-be plaintiffs. However, a well-known international company such as Dow Jones might not want to risk its overseas reputation by challenging a foreign court decision.

This court case, meanwhile, is just one of several dealing with cyber-jurisdiction issues. "It's part of the natural battle over the Internet," Tien says, adding that such cases will inevitably continue to arise for some time.

Like Dow Jones, Yahoo found itself sued for online content in a foreign country when a French court ordered the company to remove Nazi memorabilia from its auction site because the sale of such goods is prohibited in France. But in contrast to the first Dow Jones ruling, a California district court later found that Yahoo's American-based operations would not be affected by the French court's decisions; the case is now on appeal.

The two cases, however, are "not indicative of courts or governments around the world aggressively looking to regulate content in other countries," Ballon says.

"There is a danger in drawing very broad conclusions."

Courts have instead been weighing such factors as how convenient the forum would be for the parties involved, and where the prime effect or target of the alleged defamation is based. For example, an Irish appeals court earlier this year ruled that it would be inappropriate for USA Rugby to sue American journalist Ivan Calhoun for defamation in Ireland simply because Calhoun's comments could be read online in that country, where rugby is popular.

And a New York court this year ruled that the National Bank of Mexico (Banamex) couldn't sue a Mexican journalist in New York simply because a New York-registered Web site republished an article of his that contained allegedly defamatory remarks.

Because libel and other laws differ even among states, Internet jurisdiction conflicts can also arise in matters crossing state rather than national boundaries: in one case that is currently under appeal, a Virginia prison warden Stanley Young, is trying to sue two Connecticut-based newspapers (The Hartford Courant and The New Haven Advocate) for libel in Virginia, based on articles on the papers' Web sites that Young says unfairly portrayed him as a racist.

Megan Gray, a Washington D.C. lawyer specializing in Internet and First Amendment law, notes that whereas European countries have agreed on how jurisdiction should be applied to disputes involving the sale of tangible goods over the Internet, there is no comparable agreement governing information. "There is some movement to do so, but it's glacially slow to work something out on a pan-global level," Gray says.

"It could take decades, especially given that the technology is changing annually." So in the meantime, it is left up to the courts to decide such matters on a case-by-case basis. And lower and appellate courts around the world have sent conflicting messages as to whether existing media rules apply to the new online medium, Collins notes.

"We have yet to see any definitive judgments globally," he adds. "That's why the Dow Jones case is significant." The Dow Jones v. Gutnick case has gone "higher and further than the others," Tien says, in part because "both parties have a lot of resources and can continue to fight like dinosaurs for a long time."

Legal experts say that the outcome of this case is difficult to predict. But they add that Dow Jones faces an uphill battle in persuading Australia's conservative High Court to amend the traditionally understood place-of-publication rule, which relies on centuries of common (English) law precedent. The decision could take up to a year.

Michael Overing: Defining Jurisdiction on the Internet

To Overing: Defining Jurisidction Online