A recent decision by Australia's top court as to where Web site operators can be sued in relation to information published on their sites has generated quite a bit of hype.
In holding that Dow Jones could be sued for defamation in Australia in relation to an article it published through a server located in the United States, have the floodgates been opened for U.S.-based operators to be sued around the world?
Dow Jones argued that the Australian court's decision would do just that, in that to avoid a flood of litigation, it would be forced to run all its news stories past lawyers in every legal jurisdiction around the globe to ensure that they are not defamatory.
To lend clarification to an issue that has a lot of Web site operators worried about possible litigation, IGN asked Hong Kong-based lawyer Rob Deans:
What are the implications of the Gutnick v Dow Jones decision?
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"[Dow Jones v. Gutnick] is much more limited in practice than the hype suggests."
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Rob Deans: First, it is important to understand the background to the litigation. Dow Jones faced a claim in Australia, a jurisdiction where the law of defamation is considered to be pro-plaintiff, certainly in comparison to U.S. law. Naturally enough, Dow Jones therefore, sought to have the claim moved to the U.S.
The problem that Dow Jones faced was that the law was not on its side. The company claimed that the place of publication of the allegedly defamatory article was its place of business in the United States, where the article was uploaded onto the Internet. Unfortunately for Dow Jones, the law has long been that the place where an article is published is considered to be where it is read. For example, a letter sent from the United States to Australia would be considered to be published where it is opened (i.e. in Australia).
Accordingly, although the article was uploaded in the United States, it was read—and, therefore, considered to be published--around the world, including in Australia, where it was read by paying subscribers to Dow Jones' Web site.
To succeed in having the litigation moved from Australia, Dow Jones had to satisfy the court that Australia was a clearly inappropriate forum to hear the case. This is a stiff test, and, given the established principles of the law of defamation, it was no surprise to see Dow Jones fail.
As for the impact of the case, this is much more limited in practice than the hype suggests. Dow Jones ran a business of selling news articles to residents of Australia through its www.wsj.com Web site. Accordingly, it should expect to have to comply with Australian law by ensuring that its news articles do not defame residents of Australia. Sure, legal advice may be required in Australia to ensure that it complies with Australian law, but this does not appear to be an unduly onerous requirement given that it is effectively doing business in Australia, albeit whilst based on the United States.
It is also important to note that Mr. Gutnick is an Australian, that he resides in Australia and that his business is headquartered in Australia (although he also conducts business outside Australia, including in the United States). There was no question in this case of Mr. Gutnick being able to shop around various jurisdictions and select the one most favorable to his case. The reputation he claims was defamed was in Australia and he offered to undertake, not initiate, proceedings against Dow Jones outside Australia.
The position becomes more complicated for international celebrities who have reputations in more than one legal jurisdiction and who may wish to choose a jurisdiction favorable to their case in which to launch a defamation claim. However, there are existing legal principles that act to restrict prospective plaintiffs from doing this.
So, the message for Web site operators is that you should be aware of the laws of the countries in which you have customers. Other than that, don't believe the hype; the regulation of the Internet is not about to be exclusively governed by the law of Australia or any other single country, and prospective plaintiffs cannot simply shop around and choose the most favorable jurisdiction in which to file a complaint.
Rob Deans is a solicitor at Bird & Bird, Hong Kong. He is an expert on legal matters relating to the Internet and has advised extensively on Hong Kong's Gambling Ordinance.
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