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Think global, act global: the Gutnick decision and the Internet

By Peter Coroneos - posted Thursday, 19 December 2002

Is the Internet a truly global medium or not? The adage "Think global, act local" had never more poignant its expression than on 10 December, when the High Court found that publication on the Internet now means unknowable, and therefore incalculable, simultaneous risk.

Accounts of this decision range from 'the death of the Internet to we know it', to 'business as usual'. The truth probably lies somewhere in between.

In practical terms, the traditional barriers to litigation will take the sharp edge off this decision, particularly for individuals who publish their own web pages. Yet it is short sighted to think that when it suits our purposes, Australia should resort to a geographically-based reinterpretation of what being globally engaged really means.


In fairness, the High Court is not to be blamed for this decision. Their Honours are not short-sighted, but rather were constrained by the weight of 150 years of precedent which they laboured to apply to a new age. They were called upon to interpret a law that was drafted at a time when the Internet was not even in our vaguest conception. It is little wonder that the result runs so contrary to intuition, as Justice Kirby was quick to point out. Like Kirby, we think the law must be changed, and changed quickly, to provide a measure of certainty to those who would consider themselves publishers to the world and participants in the online economy.

Information is, after all, empowering, and the information revolution is no less than a revolution of empowerment. That information can sometimes be hurtful and damaging is not disputed, but in all things we need balance. You cannot uninvent technology. Nor can you use old laws to kill it off. It is the law that must adapt to recognise the new reality we live in.

I recently saw a movie, Samsara, based in Ladakh, on the Indian border with Tibet. At one point the protagonist ventures from the moonscaped isolation of his remote monastery to the capital Leh, where, sure enough, was the ubiquitous Internet cafe. "Global Internet access", said the sign. I reminded myself that the world has forever changed.

The Internet is not like other forms of publishing. No amount of care can ever take account of whom might read an article and where. How can you possibly craft content that you can be sure will not offend someone, somewhere, or offend their laws? While the Court took some comfort from the fact that one's chances of being sued are limited by the absence from jurisdiction and the lack of assets held there as well as the traditional barriers to litigation, that is no reason to let this decision remain undisturbed.

The majority judges averted to the development in the common law of some kind of reasonableness defence that takes into account the practicalities of the Internet. But that will take time to emerge, and all the while brings us no closer to the global legal consistency that must accompany the next phase of development of the medium.

Governments and courts around the world are grappling with the question of jurisdiction. They realise that participation in the global economy means ceding some traditional sovereignty. Floating a currency on international exchange markets subjects economies to forces they can no longer control. The results often impact on the domestic economy in ways way out of proportion to their true cause. Yet we do not see governments seeking to disengage, because they realise that once you're in, you're in.


So it is with the Internet impact on economies and the citizens of nations. The benefits will outweigh the costs - just ask any small business who now has access to millions of potential customers for zero marginal cost, has the option of a "24-seven" storefront, has unprecedented access to customers and suppliers, and can research their markets with unparalleled efficiency.

The effects on businesses, in terms of liability in other areas beyond defamation, are not to be excluded from any analysis of the Court's decision. If jurisdiction is determined at the point of download, or at least the point where damage is done, what does that mean for privacy, negligence, copyright and a range of other areas that are yet to be settled? While it is true that we have international treaties on copyright, the way that they are enacted and enforced domestically differs from nation to nation. For example, ISPs in Australia have no copyright liability for "caching", that is, temporarily reproducing and storing content in transit. Other countries are not so clear, with Canada seemingly pushing in the opposite direction. Does this mean that ISPs in Australia who cache Canadian content may be subject to Canada's laws, even though they are acting lawfully according to our own?

Consumers might feel they have a right to sue in their own country, but what of the trader who finds that the risk of global liability outweighs the advantages of a global presence? What happens to e-commerce then? We desperately need a harmonised set of rules and principles so we can achieve a balance of rights - and enforceable rights at that - so we can imbue the Internet with the legal certainty that was necessary when nations saw fit to devise rules of commerce governing international maritime trade.

The fact that this decision will be exploited by those who would otherwise be deprived of a remedy in the US, for example celebrities will now sue in Australia for online articles which defame them, is probably an unfortunate side effect of this decision. (I'll wager that defamation law in Australia has suddenly become the practice area of choice.)

More importantly, this decision will have precedential weight in the region and throughout the Commonwealth which, when you factor in UK, Canada, India etc, makes up a large part of the world's population. A bad outcome will see governments and courts, emboldened by this decision, enact similarly restrictive rules in manifold variations to suit local interests, undermining our hope for globally consistent approaches to jurisdiction.

We must move quickly now to reform the law so that publishers and providers of goods and services over the Internet can remain confident supporters of the revolution. If not, we all stand to lose.

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This article was first published in The Australian Financial Review on 12 December 2002.

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About the Author

Peter Coroneos is Chief Executive of the Internet Industry Association.

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