For a day or so it seemed that Australia had become the centre of the
Internet. Experts, publishers and commentators fulminated against the
decision of the Australian High Court in Dow Jones v Gutnick as
"disastrous" (Oz), "luddite" (Oz) "tangl[ing]
the web" (Oz). According to others, the court was "on
a very slippery slope to totalitarianism", "gagging the
internet" (Washington Post), "could render the Internet
unusable as a vehicle for mass communication" (Lawyer for Dow as
quoted in Washington Post); and its judgement was "bound to please
tyrants" (Asia Times).
Yet when two of Australia's Internet-only publishers - Stephen Mayne
and I - were interviewed
by the ABC's Media Report, we were both relaxed about the
judgement. Why the disparity? Are we just a couple of dopey minnows in
the big pond of the Internet who just don't get it? What are the real
ramifications of the decision?
The facts of the case were that Dow Jones' US business magazine Barron's
had published a story including critical comments about Melbourne
businessman, Joseph Gutnick. One hundred and forty people living in
Australia downloaded and read the article. Gutnick launched a defamation
action in Victoria. Dow Jones opposed the action claiming it should be
heard in New Jersey, where Dow's server is located. This was rejected
first by the Victorian Supreme Court, then the Victorian Court of
Appeal, and now the High Court - a total of 10 judges.
What the High Court found was that defamation happens when a
defamatory imputation is comprehended by someone other than the
publisher. On the 'net, comprehension occurs when and where a page is
downloaded, and this is the appropriate place to sue. As an Internet
site can be accessed from anywhere, an Internet site may simultaneously
defame a person in every country.
The alarmists would have you believe that this means that an Internet
publication would have to take into account the laws in all the
countries of the world, and adopt the lowest common denominator (i.e.
strictest) laws as their standard. In practice it doesn't mean this at
The right to damages arises from the detriment done to a person's
reputation. While a person without much of a reputation can be defamed,
little damage can be done, so there is no point in them suing. Most of
our reputations are local, not global; most readers like to read about
people with reputations; and most publications, even those with Internet
sites, write only about people their readers want to know about.
Therefore in most defamation cases there will be a strong correlation
between place of production, audience and jurisdiction.
This was an obvious judgement and On Line Opinion has always
published on the understanding that this was the law. We do not worry
about the defamation laws of every country on earth, because we know
that in practical terms, given our subject matter, the only laws we need
to worry about are those in the six states and the territories of
Suits like Gutnick's are exceptions, but that is no reason to change
the law as they will also be rare.
It's likely Dow Jones also expected the result. Think of this: why
would they have chosen international human rights lawyer and showman
Geoffrey Robertson to represent them? Because of his deep understanding
of the Australian law and his experience in influencing the bench of our
High Court? Or because in the aftermath of an adverse decision he would
be one of the best people to put the case for them to a US and
international audience? Robertson was a counter-offense, not a defence.
So, if the law is so obvious, why all the criticism? There are at
least three camps of critics: the 'net tragics, the free speech
romantics, and the commercial muscle - and they all have their reasons.
Dow Jones falls into the last category. Loudly prosecuting its case
in the court of public opinion brings benefits. Dow may have failed in
court, but defending his position cost Gutnick dearly and generated far
more publicity than the original claim. Dow's behaviour conveys a
warning that says: "Only try this at home if you are a mining
magnate or have similar access to gold or other means of commercial
exchange. Success may equal financial ruin."
Dow, and other US publishers, want to discourage overseas suits,
whatever their merits. Most common-law countries have a stricter view of
defamation than the US, generally involving a public interest test.
American free speech is protected by the First Amendment. As a result
there were only 110 defamation cases in the whole of the US last year,
while there were 77
heard in NSW alone in the same period.