Nazis, libel, porn — Yahoo! case throws up a legal minefield on the net

Opinions worldwide are inevitably split between civil libertarians who want to uphold freedom of Internet speech and lawyers and governments trying to find practical compromises that respect the open nature of the Web whilst protecting vulnerable people.

Yahoo has argued that it is technically impossible to block French Internet users from web sites governed by less restrictive American laws and that advertise hundreds of Nazi items such as daggers and uniforms.

While Yahoo Inc’s French-language Internet portal Yahoo.fr does not grant access to the web Nazi auctions, a web-wise surfer can get to the English-language portal Yahoo.com with a few clicks of his computer cursor and onto a multitude of auction sites.

Independent Internet security experts also say it is next to impossible to screen web users on the basis of nationality in a failsafe way because PC dialling numbers used to identify the surfer can be disguised or even misread.

The judge rejected one of Yahoo’s main contentions, which was that the English-language Yahoo.com site was outside the competence of the French court.

Judge Jean-Jacques Gomez said that over the next two months a French and two foreign independent experts should look into ways of implementing his ruling ordering Yahoo to block the U.S-based sites which are barred under French law.

He set a new hearing for November 6.

The case was brought against Yahoo by the Paris-based International League against Racism and Anti-Semitism, the Union of French Jewish Students and the Movement against Racism.

The laws of the Internet are still evolving in most countries, but the European Commission enshrined its approach with a little-noticed directive that came into force on July 17.

The Electronic Commerce Directive states that a company storing Internet websites on its computers — a business known as hosting — is not liable for distributing illegal material if it is not aware of its existence.

"But if you become aware that information is illegal you must immediately remove it or bar access," said Mike Rebeiro, an E-commerce lawyer at Norton Rose in London.

The Yahoo! case poses serious questions over who controls the break-neck expansion of leisure and business activity through the internet, in this case when France bans sales of goods with racist overtones but the U.S. does not.

The possible implications of the directive are already being felt in Britain, where a similar law was tested in March. ISP Demon settled out of court with a man who said messages posted anonymously on its online bulletin board defamed him.

The impact of the case, said Rebeiro, has been that ISPs are now quickly removing contentious material rather than running the risk of involvement in long legal debates.

Other countries have taken the opposite approach. The United States has ruled that an ISP is not responsible for defamatory messages, a judgment upheld by the Supreme Court on May 1 in a case against Prodigy Communications Corp.

And Germany took a similar stance last November, when acourt overturned a conviction against the local head of CompuServe — now part of America Online Inc — for failing to block access to bulletin boards featuring child pornography.

Germany has also decided that there is little it can do to stop its citizens accessing neo-Nazi websites abroad, despite having some of the world’s toughest racism laws.

Deputy Interior Minister Brigitte Zypries, the government’s Internet security Chief, has said it is impossible to build a wall around Germany and has criticised France for bringing the Yahoo case.

The issue of blocking access to foreign websites has also been taxing the Financial services industry. Banking lawyers are grappling with how to apply to the Internet laws that prohibit cross-border advertising of Financial services.

Britain, for example, prohibits Financial companies promoting themselves in the UK if they are not licensed there. A Swiss bank without a UK licence could in theory be breaking the law if its website is accessible from the UK, said Stephen Fletcher, a Financial markets lawyer at Linklaters in London.

The solutions to date have been to ask people wanting to access a financial site to send an E-mail stating their nationality or to get them to tick an on-Screen box confirming they are in the required country. But that may not be enough to satisfy regulators.

Fletcher said it is theoretically possible to trace a user’slocation by checking the unique numerical address assigned to each ISP. But the feasibility of that is debatable, and at the heart of arguments over how to resolve the French case.