When content delivery is global, under what jurisdiction is legal control
exercised?
Up until now, it is has been widely assumed that content providers manage the risk of online
publication by hosting their content on servers within jurisdictions where the law is a known
quantity. Editorial and legal control is exercised accordingly.
However, the High Court, in the first Internet matter it has heard, will later this year
pronounce on an appeal by Dow Jones against a decision of the Victorian Supreme Court which found
last year that jurisdiction is determined by the place in which online content is accessed.
The Dow Jones vs Gutnick appeal was heard in late May before the Full Bench of the High Court in
Canberra. The Internet Industry Association (IIA), together with a number of major international
publishers and portal sites, was granted leave to appear before the High Court (as interveners)
to collectively advance arguments in support of Dow’s case.
The appeal concerned mining entrepreneur Joseph Gutnick’s right to sue in Victoria for allegedly
defamatory material published by Dow Jones in its investor magazine Barron’s. (The article
implied that Gutnick was involved with a convicted money launderer and tax evader). The online
version of the article was accessible to the world by registering on the Barron’s Web site.
The central issue concerned was which legal jurisdiction applied: that of New Jersey where Dow
Jones maintained their servers (or alternatively New York where they exercised editorial
control), or Melbourne where Gutnick accessed the article, where his reputation largely resided,
and where defamation is easier to prove.
The Victorian Supreme Court Judge, Justin Hedigan, at first instance last December, found for
Gutnick on the basis that the article was accessible by readers in Victoria, so the act of
publishing – and therefore the defamation – had occurred there.
His Honour accepted Gutnick’s argument that publishing on the Internet was a “push” technology
and that publication occurs at the time and place the reader comprehends the material. His Honour
rejected Dow Jones’ argument that publishing was a “pull” technology which relied on the act of
an Internet user requesting content before it could be served to them.
While this might seem like a technical legal distinction, the implications that flow from it are
very significant for those publishing content on the Net. In practical terms, it means if the
location of the Internet user determines the jurisdiction and applicable law, then an Internet
publisher will have no way of managing its risk because they cannot reasonably foresee what laws
might apply in every place where its content may be accessed.
It is possible that insurers might be reluctant to cover an unquantifiable risk of this kind, and
some fear this might have a chilling effect on online publication generally.
In addition, the implications of this case could extend beyond defamation, since what is at issue
here is the question of jurisdiction and applicable law.
This means that a publisher would have to consider all other types of liability which might also
arise from publication including other torts such as negligence and passing off, and under laws
governing things like privacy, obscenity, sedition, racial vilification, consumer protection, and
e-commerce.
Furthermore, decisions of the Australian High Court are persuasive in other Commonwealth
countries and may therefore influence the way that others deal with similar issues. For these
reasons, the implications of the High Court’s findings may turn out to be very wide indeed.
If the appeal is lost, the future of online publication may depend on securing legislative
changes to take account of the novel and ubiquitous nature of the Internet.
Peter Coroneos is Chief Executive of the Internet Industry Association (IIA), which, together
with AIMIA, has worked on policy issues for a number of years.
now to Australian Technology & Business magazine.