Internet publishers caught in legal web

By DENIS DUTTON*

The internet is rightly regarded as close to miraculous in its capacity to provide immediate access to information and opinion worldwide.

New Zealanders used to wait for weeks to lay their hands on overseas newspapers. Now, we can fire up our computers on any afternoon and read the British newspapers hours before Londoners have opened their paper copies over breakfast. By dinnertime, we can do the same with the New York Times and the Wall Street Journal.

Email and the web have abolished forever the tyranny of distance over New Zealand's access to global information. This is a remarkable benefit of a communication system originally designed by the American military to have so many alternative interconnections that it could survive nuclear war.

When we go online in New Zealand we also have access to exactly the same newspapers and magazines available elsewhere. At least until now. A disturbing Australian legal decision last month could change that.

Joe Gutnick, a colorful multimillionaire Australian goldmining magnate (and rabbi), sued Dow Jones, publisher of the Wall Street Journal and Barrons, for defamation. Barrons had carried an article alleging he had been involved in money laundering and tax evasion.

Everyone agrees that Rabbi Gutnick deserves his day in court. The crucial question is, which court? Will it be the Supreme Court in Melbourne, where Australian defamation laws give him a reasonable chance of winning, or an American court, where free-speech legal traditions built around the First Amendment of the United States Constitution would make success unlikely?

The High Court of Australia unanimously decided last month that Rabbi Gutnick may sue in Victoria, rather than the US, since it is in Victoria that his reputation was harmed. For any internet publisher, it's an alarming decision. The worldwide web is exactly that: interlocking connections that go everywhere from any place. There are perhaps 190 countries on the internet, presenting a crazy-quilt pattern of penalties for such crimes as libel, blasphemy against the state religion, or criticising the country's rulers.

The Australian decision would in principle require any publisher with worldwide interests to water down the content of websites to be in accord with 190 different legal systems. Anything that breaks local laws criticising Islam, perhaps, or some backward country's president for life could on this Australian reasoning open the publisher to suits. If the publisher is a news organisation with local assets, such as an office building, these could be forfeit, even if a judgment were unenforceable in the publisher's home country.

One of the Australian judges, Justice Callinan, said: "Publishers are not obliged to publish on the internet. If the potential reach is uncontrollable then the greater the need to exercise care in publication."

He also expressed the view that Dow Jones was attempting to impose on Australians an American legal hegemony in relation to internet publications.

But before Australians start cheering the victory of local defamation laws over hegemonic, alien notions of free speech, they ought to think hard about who the real losers from this decision will be. Consider the following scenario.

If the Gutnick decision stands, Dow Jones can follow either of two strategies: first, it can have its articles and opinion pieces dealing with Australian companies and businessmen vetted by Australian lawyers before publication in order to fit Australian defamation law. This would be awkward and very expensive.

Alternatively, Dow Jones can continue its practice of robust reporting of Australian business, but do its best to block internet access into Australian jurisdictions, so it is not seen as intentionally publishing in Australia.

It would make much better sense for Dow Jones to follow this second path, offering information which is protected by the First Amendment in the US to its American readers, and to other readers around the globe where it is legal to do so.

But now, if you are an Australian investor, you will face an unsettling, potentially disastrous situation. Suppose Dow Jones, which is after all the most important business and financial information source in the world, uncovers dirt about some Australian tycoon that would incline investors to dump shares in the tycoon's company. Dow Jones will send the information (via an email alert or a Wall Street Journal article) worldwide except to Australia, where the story might be actionable.

Thanks to the Gutnick decision, American investors could then sell their shares first, probably to Australian investors who have been saved from the hegemony of American law and American free speech by Justice Callinan and his colleagues.

Scenarios like this give us an appreciation of why the likes of Thomas Jefferson and John Adams insisted on freedom of speech as the first principle to be ratified as an amendment to the new US Constitution.

Too bad the High Court of Australia does not see it that way. It wants to have it both ways: Australians should be able to sue for defamation on strict Australian criteria but also enjoy freedom of speech as guaranteed by the US Constitution and made available on the internet. It won't wash.

The Gutnick decision will be welcomed by dictators everywhere. Already in the last year, Zimbabwe set a nasty precedent by arresting a journalist whose crime was to write an article that was not published in Zimbabwe but could be downloaded in that sad land. Robert Mugabe can rightly regard the Gutnick decision as validating his state censorship.

Meanwhile, moving in exactly the opposite direction, a US court ruled last month that a resident of Virginia could not sue for defamation in her home state when the offending article was posted on the internet by a Connecticut newspaper.

The Pentagon's original aim to create an information system that could survive nuclear attack was successful. But not even the computer geniuses of the Pentagon could devise a system to survive the onslaught of lawyers and judges. If these censors have their way in Australia and elsewhere, we will all be losers.

The Gutnick decision must not stand. And if it does, it must not be imported into New Zealand law.

* Denis Dutton teaches in the department of philosophy at Canterbury University.