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Volume 12, No. 3, December 2002


Table of Contents

Internet Ruling Opens Pandora's Box for Online Publishing Industry

Pavan Duggal

Advocate, Supreme Court of India

pduggal@nde.vsnl.net.in

 

Recently, Australia’s Apex Court gave a landmark judgement concerning Internet defamation and jurisdiction, which promises to open up the Pandora’s Box in this direction. In the case entitled "Dow Jones v. Joseph Gutnick", the High Court of Australia has held that a defamation case arising out of a story on a United States web site can be heard in Australia.

The facts of the said case are that Dow Jones & Company Inc. prints and publishes the Wall Street Journal newspaper and Barron’s magazine. Dow Jones also operates the portal www.wsj.com, which is a subscription news site on the World Wide Web. Subscribers, who pay the subscription charges, are entitled to access the same by entering a username and password provided by Dow Jones. The edition of Barron’s Online for 28/10/2000 contained an article entitled "Unholy Gains" in which several references were made to the respondent Joseph Gutnick.

Gutnick brought an action in the Supreme Court of Victoria against Dow Jones claiming damages for defamation. In his action, Gutnick claimed that the said article defamed him by portraying him as a schemer given to stock scams, money laundering and fraud.

Dow Jones entered appearance and argued that the court was a clearly an inappropriate forum for trial proceedings and it had no jurisdiction because the relevant publication took place in USA. The primary judge held that the Australian Court had jurisdiction to try the matter. The case went to the Court of Appeal of Victoria and finally came up for hearing before the High Court of Australia.

Before the High Court, the principle issue debated was, as to where was the alleged defamatory material, of which Gutnick complained, published? Was it published in Victoria? Dow Jones argued that the publication of the article occurred at its servers maintained in New Jersey in the United States and, therefore, an Australian Court could not assume jurisdiction over the matter.

In a landmark judgment, the High court of Australia has held that the Australian Court indeed has the jurisdiction to try an action for defamation concerning an article, which was hosted at the servers of Dow Jones in the United States of America.

The court held that the law of defamation seeks to strike a balance between, on the one hand, society's interest in freedom of speech and the free exchange of information and ideas (whether or not that information and those ideas find favour with any particular part of society) and, on the other hand, an individual's interest in maintaining his or her reputation in society, free from unwarranted slur or damage.

The majority judgment further held that Internet is no more ubiquitous than some television services. It was held that those who post information on the World Wide Web do so knowing that the information that they provide is available to all sundries, without any geographical restrictions.

The High court further held that defamation is to be located at the place where the damage to the reputation occurs. The High Court said that it is only the place where any person downloaded the defamatory material that the damage to reputation may be done Following this principle, the court held that an action for damages for defamation can be continued in Australia against a US web site.

The net result of this judgement is that having been rendered by the highest court in Australia, the judgement can act as a precedent for all courts in the world, and thus enable Internet to be amenable to worldwide jurisdiction.

This judgement promises to have wide ranging implications for the entire online publishing industry. It opens up a legal minefield for web publishers, over which defamation, libel and other laws must follow. The said judgment is not only likely to impact the freedom of speech of media organizations, but it could also expose publishers to legal actions all over the world. Complex global issues regarding Internet publications have been raised, that would require further refinement and development over a period of time.

The principle enunciated by the High Court of Australia is likely to stand in conflict with emerging jurisprudence relating to jurisdiction, that has developed as per different case laws in different countries.

It is feared that one of the consequences of the emergence of jurisprudence like this is that online publishers may become very cautious and fearing litigation, may use new technologies to deny access to readers in other countries. Such an approach is likely to undermine the global nature of the Internet.

To a large extent, the decision of the High Court of Australia is clearly practical, based upon common sense and pragmatic interpretation of existing principles of law. However, I still feel that we would to need to adopt a more rational, practical and pragmatic approach before the law on jurisdiction over the Internet evolves fully.

In the context of India, this emerging jurisprudence really means that Web Publishers will have to be very careful of what content they publish. Further by virtue of the Indian Cyber law, ISPs are liable for all third party content including defamatory data and they would be required to remove the defamatory material from the sites the moment they become aware of it. In addition, publishers and Internet Service Providers will have to exercise due diligence in order to prevent exposure to unnecessary libel or defamation litigation.

The said judgement has made Internet amenable to global jurisdiction, which would create serious conflict of jurisdictions, more so in the case of persons having a regional or a world reputation. As a consequence, publishers will now have to be aware of defamation laws of the entire range of countries before they publish anything on the World Wide Web.

The Australian approach also raises issues of enforceability of such a judgment. Already, in the Yahoo! Case last year, a US court has held that no US court will enforce any ruling of any foreign court, if the same is in violation of the fundamental principles of the First Amendment to the US Constitution. Following this precedent, courts in different parts of the world may not enforce judgements of foreign courts if the same do not comply with the basic principles enshrined in the Constitution of the respective countries.

Currently, the position is unclear and it will take time before the law on this subject really develops. However, the first salvo has already been fired. It would be interesting to see how the law develops on this front over a period of time.

 

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