a stunning blow to free speech online
In a stunning blow to free speech online, Australia's High Court has allowed a novel cross-border libel suit to proceed in the Australian courts. And the Bush administration needs to act fast to promote a multinational treaty to protect freedom of expression on the Internet, or people around the world will soon be forced to censor themselves.

In the Australian case, mining magnate Joseph Gutnick sued Dow Jones & Co., after its Barron's magazine printed an allegedly defamatory article about him in the U.S. and then put it on its Web site. Dow Jones fought to have the case tried in the U.S., where it does business and maintains its Internet servers. But the court decided that defamation occurs anywhere a libelous Internet posting is downloaded, so it's legally permissible for Mr. Gutnick to do battle with Dow Jones in Australia.

By granting the plaintiff his day in an Australian court, the justices there may also have helped him win his case. Had the suit been heard in the U.S., our libel laws would have required him to prove that a statement injurious to his reputation was both false and the product of intent or negligence. But British Commonwealth countries, including Australia, shift the burden to the defendant to prove that the statement is true, and intent or fault don't figure into the mix. So, one result of the Australian court's decision is likely to be more "forum shopping" on a global scale.

Some commentators support the court's ruling. They point out that companies, wherever they operate, are always at the mercy of plaintiff-friendly forums, and that business needs to build that reality into its cost and profit models.

They also argue that free expression comes with responsibilities. And if libel cases might be mounted anywhere in the world, editors and fact-checkers should put in overtime trying to catch errors, edit out half-truths and correct and retract mistakes that slip into print.

But to insist that defamation occurs where an article is read, and not where it was posted, invites abuse. The powerful and the secretive would use local laws, and may write new ones, to block unwelcome opinions or news.

Everybody who posts anything on the Internet would need to comply with the laws of 190 nations. And one day soon, everyone would be afraid to write anything worth reading.

A much wiser approach was recently adopted by a U.S. Appellate Court when it decided that people can't be sued for libel in every state their Web postings are accessed. The U.S. Court of Appeals for the Fourth Circuit ruled in favor of Chicago-based Tribune Co.'s Hartford Courant and another Connecticut newspaper, defendants in a libel suit brought in Virginia by Stanley Young, a controversial state prison warden there. Mr. Young's claim was based on news stories the Courant and the New Haven Advocate posted on their Web sites which, Mr. Young contended, branded him a racist.

The Appellate Court held that the papers couldn't be sued in Virginia because they didn't intend to target readers there. And it didn't matter that the Web sites were accessible to Virginia residents, damaging Mr. Young's reputation in his own state. Merely having a presence on the Internet shouldn't subject anyone to suit anywhere there's an Internet connection.

The Australian decision, chilling free expression as it does, makes Internet libel law a race to the lowest level of protected speech. As courts are now starting to duel over cross-border libel, e-commerce strategists are working toward an increasingly zoned Internet, where people clicking on a Web link in different countries see different postings, and sometimes nothing at all.

Before that happens, the Bush administration must galvanize world opinion and insist that all our nation's trading partners sign off on a multilateral treaty that safeguards the free exchange of ideas.

About the Author

Marc Lane is a business and tax attorney, a Master Registered Financial Planner, a Registered Financial Consultant, and a Certified Investment Specialist. Marc is the author of 30 books on business organization, taxation, and personal finance. His newest book, "Advising Entrepreneurs: Dynamic Strategies for Financial Growth" draws from his experience working with those who have successfully built their businesses. Marc is an Adjunct Professor of Law at Northwestern University and an Adjunct Professor of Business at the University of Illinois. His practice areas include Individual Taxation, Corporate Tax Planning, Business Tax Planning, Estate Planning, Investments, Retirement Planning,Elder Law, International Trade, Business Law, and Wills, Trusts and Estates. Additional articles, case studies, and a free email newsletter are available at www.marcjlane.com.