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By Jonathan Krim
The Washington Post

An Australian businessman has won the right to sue an American news organization in his home country over a story published on the Internet, in a court ruling that could change how publishers view their ability to distribute information around the world.

In the first decision of its kind in any country, Australia's highest court ruled yesterday that Dow Jones & Co., which publishes The Wall Street Journal and Barron's, must stand trial in Australia, rather than the United States, for allegedly defaming a mining executive from Melbourne. Like most countries, Australia offers fewer free-speech protections than are afforded by the First Amendment to the U.S. Constitution.

A wide range of U.S., European and Australian media organizations and Internet companies had flocked to Dow Jones' side in the case, arguing that publishers could be subject to an impossible array of differing legal standards.

"The rule that the court adopted, if more broadly applied by other countries, could render the Internet unusable as a vehicle for mass communication," said David Schulz, a New York attorney who helped the coalition prepare legal briefs supporting Dow Jones. The group includes The Washington Post, The New York Times, Yahoo and Amazon.com.

The story, published in October 2000 in Barron's, questioned the propriety of business dealings by Joseph Gutnick, a prominent mining entrepreneur and philanthropist in Melbourne.

Gutnick said the ruling puts the Internet on a par with a local newspaper.

But Schulz said that free expression could also be jeopardized by the ruling. Foreign correspondents for U.S. news organizations report on other countries assuming U.S. libel standards. If they can be prosecuted under local law, such stories might be less likely to be produced.

A British journalist recently was arrested in Zimbabwe under similar circumstances, but was released on a technicality.

The issue exemplifies the difficulty in applying laws to an Internet that knows no borders. Some legal experts said that the ruling could crimp the increasingly free flow of information.

"What it says is that free accessibility of expression on the Internet carries risks," said Ian Ballon, an Internet law attorney in California who's also executive director of Stanford Law School's Center for E-Commerce.

Stuart Karle, a Dow Jones attorney, said the ruling means that "you don't know what law will apply to what you're saying until someone sues you. At that point, it's a little late." He said the risk applies to both large news organizations and to individuals who produce personal Web sites or "blogs" that contain political expression.

Others worry that the case could be a harbinger of a legal free-for-all that might undermine Internet commerce more broadly. If, for example, consumers or businesses in various countries could sue over a failed Internet transaction under myriad local laws and jurisdictions, doing business online would be jeopardized because it would be unclear which laws govern commercial liability.

Copyright � 2002 The Seattle Times Company



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