Dow Jones v Gutnick: the Internet honeymoon is over. What's next?

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 all.

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 Australia.

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.

Commercial muscle

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.

But the bigger potential pay-off for defending the indefensible is in the likely response of the US legal and political systems to the decision. The Washington Post gives a clue to the strength of domestic feeling when it says "A priority for the upcoming congressional session is legislation immunizing American publishers and journalists from this spurious litigation". The WaPo also threatens an information embargo: "…the Internet publishing community ... should use technology to block all Australian users access to their sites."

Such bumptiously xenophobic action may not be necessary. All this noise may encourage the Victorian Supreme Court when it considers the merits of the case, rather than its jurisdiction, to follow the precedent set by a British court last year. According to The Guardian, a Spanish news agency was able to successfully defend a defamation action because what it printed would have attracted a defence of qualified privilege in Spain, thus importing the law of Spain into that of Britain for these purposes.

There is another commercial angle to this. The practicalities of suing are that there is no point unless the defendant has assets available to satisfy a judgement. Large companies like Dow are likely to have significant assets situated in most countries on the globe. The same doesn't hold true for sites like Crikey! or On Line Opinion. One of the side effects of this judgement is that it gives an edge to small news organisations when it comes to investigative reporting on the 'net. Because of their size they can be more aggressive in printing material - an advantage which is not in Dow's interest.

'net tragics

The kernel of the 'net tragic argument can be found in Dow Jones' submission that because the Internet is a new technology it demands new laws. Matthew Ciolek, head of Internet publications at Canberra's Australian National University described the ruling as "Luddite", while Glen Reynolds of Instapundit fame warned that the decision could halt the communications revolution. Others claim that it is wrong because the Internet is meant to be "free".

The myth of the Internet is that it was originally created by the American military and that this Frankenstein's monster was then rescued by the computer community to serve mankind. "Serve" is obviously very dependant for meaning on ideology, and the underlying ideology of the early adopters of the Internet is libertarian and anarchic. It is almost a parallel universe to the respectable one in which the rest of us live our lives, a demi-monde where hackers can be heroes, and any hierarchy or authority or restraint is regarded with suspicion. This community sees the 'net as an opportunity to be godlike (even if their universe is interior, like the one in The Matrix) and that means the ability to go anywhere, be anything, do anything instantly. Their motto is "Because we can".

The technological argument basically says: "Because we have found an innovative, more technological and efficient way to do you damage than ever before, we should be allowed to without any constraints." If one accepts that it is wrong to do damage in the first place, this argument reveals itself as little more than adolescent hype. Which leads on to the third type of critic.

Free speech romantics

This group, in which you will find not a few publishers and writers, believes that speech should be as free as possible, but not without limits. However, we would set those limits much farther afield than they are set in Australia.

These critics would rather have the American standard on defamation than the Australian one, and the Dow argument would have provided that by the back door. But if that is the case, they would do much better to argue their case openly than to rely on a legal technicality. Legal decisions can enlarge rights, but they do this haphazardly - just look at the tangled knot of cases on Native Title.

I am also not certain that the US laws are to be preferred. If I cheat in an exam, or on my spouse, how widely do I deserve to have that truth spread? The US answer would appear to be "to the whole world, even if the allegation is not true". Australian law looks at the truth of the statement and asks whether the readers have a legitimate interest in knowing.

However, the free speech romantics are missing a major point. Legal precedents only influence courts, they have no bearing on what laws a government might pass. Take Zimbabwe, for example. Last year a Guardian journalist faced deportation for what was published on the Guardian's site. Their laws are already ahead of the Australian decision.

Such actions are not limited to bottom-drawer third-world regimes. In recent times France took on Yahoo! - for materials auctioned from their site - while Germany jailed Frederick Toben, director of the Adelaide Institute, for publishing material on his Australian site denying the holocaust.

As I write I am reasonably sure that On Line Opinion contravenes the law in China and Malaysia. China, because we have published articles on Falun Gong (any of our Chinese readers, wanting to compound that crime may click here); and Malaysia because it is illegal to import a bible (Malaysian readers click here). I am also reasonably sure that I am in good company with most other Australian media outlets.

But so what? It is a fundamental illusion of our times that we can live a life without danger, and compared to the risks that publishers and writers used to face in the past, the risks we take today are comfortable.

What is to be done? The Internet is a wonderful invention. It lowers the barriers of entry so that anyone, even a middle-aged ex-political apparatchik with a laptop in a two-bedroom unit in Coorparoo, can assemble and publish a significant source of alternative opinion. It functions as a beacon, making the light of the freedoms that we enjoy shine even more brightly than it has ever before. In some ways it is the most potent weapon we have in the war against terrorism, bringing knowledge, information, wisdom and analysis where before there was very little.

So, I think that now is the time to start negotiating an international treaty on the Internet - whether under UN auspices or not probably doesn't matter. It should probably fairly closely follow the US laws, or the implied right of free speech propounded by the High Court in Theophanous, and it should be limited to politics.

The crux of any treaty should be that it gives immunity from prosecution to anyone who publishes in accordance with its guidelines. The strength of it should be that it designates the courts where the publisher and writer live as having the right to adjudicate. This may be inconvenient for some dissidents, but it will mean that, unlike most UN or international treaties, there will be a defined and workable system for enforcing the treaty. It also makes it more likely to win the signatures it needs to be effective as it would not involves a loss of domestic sovereignty.

Of course, such a treaty couldn't deal with all the issues that publishers have to face. Nor should it. There will still be issues like local laws on contempt of court, product regulations, tortious liability for negligence etc. that publishers will have to deal with, case by case. Weigh that up against the massive savings that Internet publishing has made - no printing presses, warehouses, delivery vans, returns, receptionists etc - and it seems like a small price to pay.