Landmark Ruling In Internet Case

In a landmark case, Australia's highest court on Tuesday gave a businessman the right to sue for defamation in Australia over an article published in the United States and posted on the Internet.

Analysts suggest the ruling against international news service Dow Jones & Co. — the first by a nation's top court to deal with cross-border Internet defamation — could set a precedent and affect publishers and Web sites that post articles in the 190 nations that allow defamation cases.

"This is a significant ruling in that it could push publishers into having to consider every conceivable defamation law in the world before posting something online," said CBSNews.com Legal Analyst Andrew Cohen. "On the other hand, it still is enormously difficult to collect upon a foreign judgment even if these Internet plaintiffs win, so the news isn't all that dire for online sites."

The High Court of Australia unanimously dismissed an appeal by Dow Jones & Co. aimed at stopping a defamation suit in Australia by mining magnate Joseph Gutnick.

Gutnick claimed that a 7,000-word article that had appeared in Barron's in October 2000 portrayed him as a schemer given to stock scams, money laundering and fraud. The article was also published online.

The decision means Gutnick can sue New York-based Dow Jones & Co. in his home state of Victoria, in Australia.

Dow Jones & Co., which publishes The Wall Street Journal, Barron's, Dow Jones Newswires and several stock market indicators, said it was disappointed with the ruling and promised to continue its defense.

"The result means that Dow Jones will defend those proceedings in a jurisdiction which is far removed from the country in which the article was prepared and where the vast bulk of Barron's readership resides," it said in a statement.

Tuesday's ruling in Australia's highest court of appeal made no decision on the defamation case itself. Gutnick will have to pursue his case in the Victorian Supreme Court.

Several media and Internet organizations, including The Associated Press, Amazon.com and AOL Time Warner, filed legal briefs in support of Dow Jones.

Lawyers for Dow Jones argued that the case should be heard in the United States because the article was first published in New Jersey and intended for a U.S. audience.

Gutnick said the case should be heard in his hometown, Melbourne, since people in Victoria could see the article on the Internet and he was thus defamed where he is best known.

"It will certainly be re-established that the Net is no different than the regular newspaper," he told Australia's Channel Nine television. "You have to be careful what you write and if you offend somebody or write malicious statements about people like what was done in my case you can be subject to being prosecuted."

The judgment means material published on the Internet is deemed to have been published in the place it is viewed online, not just the country of origin.

However, the seven-judge court imposed some limits on defamation actions. It said that any successful defamation action would make subsequent lawsuits concerning the same news item unlikely to succeed. It dismissed Dow Jones' concern that it would have to consider the defamation laws from "Afghanistan to Zimbabwe" in every article published on the Internet.

"In all except the most unusual of cases, identifying the person about whom material is to be published will readily identify the defamation law to which that person may resort," the court said.

However, according to Cohen, "This creates a lowest-common-denominator problem for online publishers because if this ruling takes hold it won't be good enough for someone who wants to post something to simply consider the laws of their country. They'll also have to consider the laws of every country that could conceivably receive an Internet transmission."

Vast differences separate defamation laws across countries. In the United States, for example, a person claiming libel must prove the accused deliberately published inaccurate information and that it was harmful.

But in Britain, the burden of proof is on the accused. Canada's court system has no unified standard and each province creates its own laws on the subject, according to the University of Houston communications department.

"This could create forum-shopping on a global scale," said Cohen. "If this ruling is affirmed, if you are a potential plaintiff and feel like you've been defamed online you can pick the country that has the lowest defamation proof standards in the world and file suit there figuring you've just increased your chances of success."

Some countries impost strict time limits; others do not. While some court systems emphasize remedying libelous errors through printed apologies and corrections, others are prone to award damages. Still others actually impose prison terms on those guilty of libel.