Yahoo! is facing an uncertain future when it comes to their First Amendment rights. A recent decision by the Ninth Circuit Court of Appeals has ruled that a U.S. district court judge overstepped his bounds by making a decision about a case that has international consequences. The ruling could also call into question the free speech rights of other U.S. companies that allow international access to their Web site.

Two groups won a French court order in 2000 that required Yahoo! to block the display of online auctions selling Nazi memorabilia to Internet users in France. (French law prohibits the display or sale of material it deems racist.) The International Anti-Racism and Anti-Semitism League along with France's Union of Jewish Students sued Yahoo! in French court in order to force the company to ban sales of Nazi-related items on the site's popular auction service.

Yahoo!'s response to the lawsuit was to remove Nazi-related auction content from the French version of their popular portal site. Yahoo! chose to allow auctions of Nazi-related items to continue on its U.S. based .com site. The U.S. based site can be accessed from anywhere in the world if users type in the direct URL. Yahoo! then filed a lawsuit in U.S. courts asking for a ruling that the French order was invalid, because it violated the free speech rights granted to U.S. citizens and companies.

Yahoo! filed suit, in part, in an attempt to protect itself from future efforts to collect the fines that the French court has been levying against the Internet portal. The French court issued declared fine of 100,000 francs (about $13,300US) per day for each day that Yahoo! allows the Nazi related items to remain on its Web site. The court ruling was issued on May 22nd, 2000 and the fine has been racking up charges ever since.

The presiding judge at that time ruled in Yahoo!'s favor, but the 2-1 decision by the Court of Appeals this week reversed that decision on a technicality. Ninth Circuit Judge Warren Ferguson explained in the court decision that because the French groups had not sued in U.S. court, "The district court should have abstained from hearing the case." Ferguson issued a warning to the company by going on to explain that "Yahoo cannot expect both to benefit from the fact that its content may be viewed around the world and to be shielded from the resulting costs."

Lawyers for the French human rights groups that sued Yahoo! claim that Yahoo!'s refusal to remove the content from all of their Web sites is an attempt by the company to foist U.S. values on the rest of the world. Civil liberties advocates within the United States point out that the French groups are trying to do the exact same thing by limiting the speech rights of an American company and forcing them to comply with French laws and values.

The entire case calls into question the rights of companies that use their Web site to reach foreign audiences. Web sites that feature content considered illegal in one country have long had the option of moving their operations offshore and out of the reach of law enforcement officials. In fact, this very movement is part of what has made it so difficult for governments to create a legislative response to email spam. If spam is sent from outside of the United States, the U.S. has no ability to charge and prosecute the offenders.

The new U.S. court ruling does not affect the way that Yahoo! will need to run its Web site, nor will it force the company to remove offending content from auction listings. What it does mean is that Yahoo! will need to wait for the French groups to attempt to bring the case to U.S. courts in order to have the French order enforced. At that time, Yahoo! would have the right and ability to argue that the order is unconstitutional and therefore, unenforceable in the United States.
August 24, 2004

Jennifer Laycock is the Editor of Search Engine Guide, the Social Media Faculty Chair for MarketMotive and offers small business social media strategy & consulting. Jennifer enjoys the challenge of finding unique and creative ways to connect with consumers without spending a fortune in marketing dollars. Though she now prefers to work with small businesses, Jennifer’s clients have included companies like Verizon, American Greetings and Highlights for Children.

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