Australia: The Internet – Which Law Applies?

One would generally consider the location of the server and where the publisher conducts its business when posed with questions of the place of publication of articles via the Internet and the applicable law. Recent cases show these may not the only relevant factors of consideration.

The first case to attract attention was the French Government vs Yahoo. The French Government ruled that Yahoo had breached the French anti-racism legislation by offering Nazi memorabilia on its auction web site. It sent shock waves round the world as the Yahoo web site and servers were located in USA. Web operators began to ask themselves, " will we be subject to all the laws of the countries within the reach of the World Wide Web?" Yahoo was given 3 months to come up with a mechanism to stop French nationals from accessing the said web site failure of which it would have to pay a hefty fine. Before the 3 months time limit was up, Yahoo announced that it would scrap the web site to avoid breaching the order.

The latest case on the jurisdiction issue is Gutnick v Dow Jones & Co Ltd¹. It is a defamation case. Mr. Gutnick is a prominent Australian businessman and resided in the State of Victoria, Australia. He issued proceedings against Dow Jones ("DJ") claiming that an article entitled "Unholy Gains" published in the Barrons Magazine and also made available on-line at www.wsj.com contained defamatory comments. DJ owned both the Barrons Magazine and the web site www.wsj.com. There were 1,700 subscribers from Australia to this web site. These included readers from the finance, business and the stock broking sector.

The claim was brought in the Supreme Court of Victoria and DJ sought an interlocutory application to stay or dismiss the proceedings on a number of bases, inter alia, the on-line article was published in New Jersey, USA where the web server of www.wsj.com was located and not Victoria, Australia. Hence the defamation case should be brought in New Jersey, USA and not Australia. DJ explained by way of affidavits the technical details of how the article was transmitted to 6 severs in New Jersey and remitted to the subscribers via the World Wide Web. Emphasis was made on the fact that the article was obtained by the subscriber’s deliberate clicking on to request one of the six New Jersey servers to provide access to the document. DJ’s counsel also sought to assimilate the process to taking a book out of a library in New Jersey and taking it home to read in Victoria.

The judge however held the case should be tried in the State of Victoria as the proceedings were commenced by a Victorian resident conducting his business and social affairs in his State in respect of a defamatory publication in the same State.

1. [2001] VSC 305 [28 August 2001]

© CMS Cameron McKenna September 2001