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Heading: doctrine
Key words: regulation, jurisdiction, freedom, speech
Reference: "An international discussion of the implications of the Yahoo! Inc. nazi memorabilia dispute", Interviews organized by Lionel Thoumyre, Juriscom.net, January/February 2001

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The legal implications of the Yahoo! Inc. nazi memorabilia dispute: an interview with Professor Joel R. Reidenberg

« Companies will have to comply with the laws where they target business »

Joel R. Reidenberg, Professor of Law and Director of the Graduate Program Fordham University School of Law (New York)

Email: reidenberg@sprynet.com


[Juriscom.net] In its November 20, 2000 decision, the French judge affirmed the legal tie with France, finding that auctions of nazi paraphernalia can potentially be of interest to anyone, including French nationals; and that the auction sites showed publicity banners written in French whenever a visitor connected from a terminal located in France. What are your thoughts on the French judge’s appreciation of the relevant criteria to establish the Court’s jurisdiction?

[Joel R. Reidenberg] The French judge seems to have applied traditional criteria to determine its jurisdiction over the foreign defendant. There was an allegation that a foreign company violated French law within French territory. The court looked at the fact that Yahoo’s presence in France was not passive and specifically noted that Yahoo actively targeted French users with advertisements in French. Indeed, Yahoo’s arguments contesting the jurisdiction of the French courts seemed disingenuous. Once the Court established that Yahoo, Inc. displayed advertisements in French to visitors at the US-based server, Yahoo could not seriously contend that it did not intend those services  to reach a French audience and that it did not intend to profit from French visitors. Similarly, where Yahoo’s French subsidiary maintained a link to the US-based server, Yahoo was clearly seeking to do business in France.

In terms of substantive law, Yahoo wanted to apply the American First Amendment doctrine to its activities within France. Naturally, the French court rejected this line of argument. The interesting question was the degree of compliance with French law that the French judge would require. The court’s own experts noted that 100% compliance with French law was impossible to guarantee through filtering out French Internet users. Yet, the court did not order the removal of Yahoo’s Nazi material on the US-based site. Instead, the French court’s order was for a ‘reasonable’ level of compliance with French law within France.

Hypothetically, in a reverse situation involving a French site with content reprehensible in the United States, would an American court not have likewise affirmed its jurisdiction?

While the First Amendment doctrine in the US makes it unlikely that content permissible in France would be considered reprehensible in the United States, an American court is certainly likely to assert jurisdiction over a French site that contravenes US law and is accessed in the United States. The American rules on jurisdiction require that the defendant have ‘minimum contacts’ with the forum state and that the exercise of jurisdiction is consistent with ‘fair play and substantial justice’. According to the Supreme Court in the famous case of World Wide Volkswagen v. Woodson, 444 U.S. 286 (1980), the defendant must purposefully avail himself of the privileges of the forum state. Here, if a French Web site were accessible in the US and sought access by Americans, the site would be subject to US court jurisdiction. Indeed, in a recent Internet gambling case, the Minnesota courts found that an out-of-state gambling site that was legal in the jurisdiction where it was located (Nevada), nevertheless violated Minnesota law since Minnesota residents might gamble in violation of Minnesota law. (Minnesota v. Granite Gate Resorts, Inc., 568 N.W.2d 715 aff’d 576 N.W.2d 747 [Minn. 1998]).

Is there a risk that judges will systematically affirm their jurisdiction and apply local regulations in cases involving foreign-based sites? What would be the consequences?

Judges in any legal system have a duty to enforce the laws within their territories. I would not expect judges to ignore the violation of local laws by foreign-based Web sites. However, I would similarly expect that courts will need to find some nexus between the foreign Web site and the local jurisdiction. To the extent that companies seek to benefit from foreign jurisdictions on the Web, then local courts can legitimately hold those companies accountable for local regulations. The consequences would be that companies will have to comply with the laws where they target business.  I am very skeptical of broad claims that such actions will destroy the Internet.

What consequences does this decision command in an international context?

Over time and, if other courts follow the French approach, I think we will see a change in the Internet infrastructure to allow easier geographically segmentation. At the moment, Internet advertising firms are able to segment on a rudimentary basis. If legal accountability like that imposed by the French decision is established elsewhere, companies will have an incentive to create an architecture that enables compliance with local laws. I think this is a more likely outcome than terms dictated by the most restrictive laws.

Can the freedom of speech guaranteed under the First Amendment of the U.S. Constitution be characterised as a ‘’globalizing norm’’?

I do not think that the scope of the First Amendment is a ‘globalized norm’.  Most countries do not accept the protection that the United States gives to hate speech and pornography. The French decision in Yahoo and the early indications that other countries will follow the French approach demonstrate that such an expansive view of speech is not popular around the world.

Should we envisage the creation of specific international jurisdiction’s rules with regards to disputes arising on the Internet?

Certain types of disputes will more easily be settled with specific Internet jurisdictional rules. In particular, consumer transactions and commercial transactions are likely to benefit from online dispute settlement mechanisms that operate in an arbitral manner. However, other matters like the Yahoo case, really fit within the parameters of the classic conflict of law doctrine, especially where public order policies are at stake.

Should we consider that the information circulating on the Internet belongs to a space outside of national jurisdictions, governed by its own specific modes of regulation?

There are specific modes of regulation for the Internet, namely technical rules and technical choices affecting information flows. However, the Internet exists in a real world and intersects with territorial jurisdictions. National jurisdictions will and should regulate those aspects of Internet activities that affect their citizens.

Yahoo! Inc. argued in its defence that imposing a filtering mechanism would in a certain way undermine the very existence of the Internet, ‘’a space of freedom, hardly receptive to any attempts to control and restrict access’’. What do you think of such a suggestion?

This suggestion was the posturing of a company that did not want to comply with the laws of a country where it had business. In fact, Yahoo was already taking advantage of filtering for advertising purposes. Indeed, Yahoo’s support of the hate materials on its Web site was an extraordinary display of arrogance and hypocrisy. At the same time Yahoo argued strenuously to keep Nazi glorification on its Web site, Yahoo prohibited the sale of pet hamsters and used clothing! 

Yahoo’s use of advertising filters even makes the case that filtering mechanisms will allow the Internet to flourish without compromising democratically chosen public order values like those in France concerning Nazi hate.

Professor Joel R. Reidenberg statements as collected by Lionel Thoumyre


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