Tech Talk: Caught in the Web

Monday, Sep. 10, 2001 By ERIC ELLIS

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Monday, September 10, 2001

Call it the day the Internet lost its innocence, and some of its freedom.

A court in Melbourne, Australia, has managed to do what thousands of Net nerds have said is not possible -- put a border around the Internet.

I'm referring of course to last month's ruling against the American media giant Dow Jones, which publishes the Wall Street Journal, among other titles, over an article about a little-known Australian gold-mining entrepreneur. In essence, the judge ruled that a defamation action could be brought in Australia against an article that was published in the United States. The ruling has shaken the Internet industry.

At issue was a piece in Dow Jones' authoritative financial weekly, Barrons, which described the problems of various businessmen, among them Joe Gutnick, who runs a group of public companies in Melbourne. Barrons is overwhelmingly an American title: it is published at Dow Jones' printing plant in New Jersey and more than 95% of its circulation is in the U.S. There is also a website and the editors, in their wisdom, posted the Gutnick piece online.

Gutnick, on the other side of the world, read the piece from his Melbourne office and immediately sought legal advice. Not in New Jersey, but in the Australian state of Victoria, which has some of the toughest libel laws in the liberal West. Now American lawyers don't usually appear in Australian courtrooms, but Dow Jones sent a high-powered posse Down Under to defend their case. The lawyers argued that although the Internet was by its nature global, the Barrons report was actually published in New Jersey because that's where the server is. The alleged libel was not at issue in these proceedings; the venue was. In the end, the judge found that because the story was downloaded in Melbourne, that was effectively an act of publication. The case would therefore proceed in Victoria; Gutnick was jubilant.

The implications of the ruling spread far beyond Australia. Asia, for example, is littered with opposition political sites that are downright rude about governments, the good ones and the despotic ones. Some of these sites carry information that is true and provable; many print hearsay and are terribly libelous. But they get away with their shenanigans because they are mostly hosted outside the countries they are criticizing. They do that because they think that can evade the tentacles of the regime they are criticizing. But if the Australian ruling is extended, that is no longer the case.

At its most ridiculous, Afghanistan's Taliban regime could sue the designers of Victoria's Secret women's wear for corrupting morals if an Afghan checked out their website and got offended -- arguments like that were alarmingly pursued by the Dow Jones lawyers. That scenario is unlikely to unfold; before the Gutnick libel case is heard, Dow Jones intends to appeal to Australia's High Court.

The ruling won't hurt responsible publishers, who maintain the basic journalistic values of balance and accuracy. But Internet publishers, wherever they be, would be wise to heed the inherent warnings. And get it right.