This article discusses some recent examples of the law and governments meeting the Internet. What conclusions can be drawn from these examples? This is not an easy question. Unfortunately, those who draw the wrong conclusions may have a worldwide audience explaining the error of their ways.
Perhaps one of the most fundamental aspects of the law in the Internet context is jurisdiction. If someone engages in online activities that are in violation of "local" laws, when can these laws be enforced against the online actor? In the past year, this has been a hot issue in U.S. courts and, unfortunately, the courts have not been consistent in their decisions.
A good example of these jurisdictional fights is a fairly recent Minnesota case. Minnesota has been particularly concerned with online gambling operations and the impact such operations may have on Minnesota residents. The Minnesota Attorney General even posted on its Web page a memorandum stating a position on Internet gambling. The state of Minnesota subsequently filed charges against an online betting establishment. The Nevada company operated a sports betting operation on a server in Belize and advertised its services on a Web page in Nevada. The company also provides a "sports picks" service, which it advertised on its Web page.
Also of interest is a recently decided New York case, American Library Association v. Pataki, No. 97 Civ. 0222 (LAP), (S.D.N.Y., June 20, 1997), which applied a different type of analysis to the state court jurisdiction question. Rather than looking to see whether an actor acting from outside of New York caused harm in New York state, the district court struck down New York's attempt at a state "Communications Decency Act" as unconstitutional because of the statute's effects on out-of-state actors. The court held that because of the borderless nature of the Internet, the statute requires all Internet users to comply with the requirements of the New York statute even though there is no way -- in an online environment like the Internet -- to obtain the information necessary to comply with the New York statute. In essence, New York attempted to export its law to all Internet users, wherever they were located, because there is no way for an Internet user to guarantee that some of his or her Internet traffic will not be routed though New York at some point. Such an exporting of law, even if inadvertent, would allow one state to trample on the sovereignty of other states, and was therefore found unconstitutional.
In some cases, attempts have been made to regulate content of Internet transmissions on a national level, instead of leaving the task of assembling a patchwork of regulations that would potentially produce an unconstitutional conflict in legal requirements. For instance, with more states expressing concern over online gambling, U.S. Sen. Jon Kyl (R-Ariz.) introduced the Internet Gambling Prohibition Act of 1997. This legislation, if passed, would make illegal the transmission of any information over the Internet related to gambling, including bets, wagers or the chance to win a prize or lottery.
In other cases, a national prohibition on local legislation has been considered a more appropriate way of controlling local and state governments' jurisdictional relationship with the Internet. Because of concerns over local taxation of Internet transactions, and the possible detrimental effect on electronic commerce posed by the need to comply with the requirements of 30,000 different taxation jurisdictions in the United States alone, Congress is considering passage of the Internet Tax Freedom Act. The act would establish a two-year moratorium prohibiting state and local governments from imposing new taxes on Internet transactions. The Tax-Free Internet Act (HR99) was introduced in the House, and it also seeks to suspend local taxation of Internet services.
Even national legislation does not necessarily produce consistent content regulation on the Internet. While the United States gives broad protection to free speech, the First Amendment functionally operates as a local ordinance. In addition, sometimes the United States wishes to regulate activities that do not originate from within the country. Recently, with the help of international authorities, the United States succeeded in obtaining the extradition of an Argentinean hacker accused of breaking into U.S. computers. The Federal Trade Commission has also sought to recover offshore assets of pyramid scheme operators who conduct business over the Internet, as well as to enjoin the operations of a company that provided access to pornographic pictures while surreptitiously disconnecting phone calls to local service providers and re-routing them via Canada to a Moldovan phone number (resulting in phenomenal phone bills of which the scam operators received a portion of the payment amounts).
Other countries have not been as successful as the United States in their attempts to control Internet activities. Germany, for instance, has not met with much success in blocking transmissions into Germany of Nazi propaganda, holocaust-revisionist material, and other militant information Germany considers illegal. The German government has asked German Internet providers to block sites containing such objectionable material -- which has only resulted in a proliferation of mirror sites, thereby increasing the exposure such material receives. The German government even tried to prosecute Angela Marquardt, former deputy leader of Germany's reform communist Party of Democratic Socialism, for linking to outlawed material on her home page. In this particular case, the court acquitted her of aiding terrorist acts because the material was put on the Web after she established the link. The court held that she could not be held liable for merely maintaining a hyperlink.
If someone engages in online activities which are in violation of "local" laws, when can these laws be enforced against the online actor?
In another example of governments being blocked (and embarrassed) as a result of conflicting laws and limited jurisdiction, the Nottinghamshire, England, City Council went to court to block Internet distribution of a social services department report that it considered confidential and copyrighted. While the City Council has been able to have copies of the report removed from some Web sites, including a Canadian site, it has not succeeded in having the report removed from Web pages belonging to professors in the United States and Australia. Professor Junger, a law professor at Case Western Reserve University Law School, informed the Nottinghamshire City Council that he would not comply with its request to remove the report from his Web page -- arguing that United Kingdom copyright law does not affect Junger's actions in Ohio; that under U.S. copyright law, the report is not being used in violation of its copyright; and that the city council and the courts in England cannot exercise jurisdiction over him to stop the report's distribution.
The Nottinghamshire report is not the only example of government information raising privacy concerns in the Internet context. The U.S. Social Security Administration has recently taken offline its database of Social Security information as a result of privacy concerns raised by insufficient access controls to the data. Originally intended to increase consumer access to individuals' own data at a lower cost to the Social Security Administration, the Web site was a genuinely well-intentioned effort that turned out poorly for the agency. A similar public relations nightmare occurred when the Oregon Department of Motor Vehicles' database of driver's license information was bought by a computer consultant and placed on the Internet. For under $250, the entire CD-ROM database was purchased and made available for searches on a worldwide basis, including from links placed on the Stalker's Home Page -- a resource set up by a privacy advocate to show the potential threat to people's privacy and safety of providing ready access to certain public records and databases. The Oregon information has always been available for a small fee from a variety of sources, but free and easy access to this type of information on the Internet produces a beast of a different breed when the information is so readily available, rather than when the same information may only be obtained by standing in line at the DMV.
Sometimes local, or even national, efforts to control Internet activities cannot work effectively. Unfortunately, there are not many examples of international cooperation working in practice as of yet. An international accord concerning the Internet was recently attempted to allow for the creation of new top-level domain names for Internet addresses (to allow for relief of the crowded ".com" domain and to lessen conflicts between multiple parties which all want the same domain name) as well as to provide for trademark dispute resolution involving domain names.
The Internet Ad-Hoc Committee (IAHC) was formed by representatives of a number of Internet and international governmental organizations to create the accord. The IAHC proposed changes to the domain name system, received public comments and released a final report. The International Telecommunications Union then sponsored a meeting to enable companies, governments and other organizations to sign on the IAHC plan.
The IAHC, however, received less support than it had hoped after the European Union and the United States criticized not only the IAHC's plan, but the whole process that produced the plan. Some people claimed that the IAHC proposal to revitalize the Internet amounted to an international power grab by a group of self-selected individuals. The United States and other entities are now considering their own alternatives to modify the domain name system.
Spam and Speech
Sometimes individual efforts to control Internet activities have produced the desired results with only indirect involvement on the part of various levels of government. A good example of this private control is found in the major service providers' attempts to control unsolicited commercial e-mail (UCE, often referred to as "spam"). Stanford Wallace, and his company, Cyber Promotions, are responsible for a large portion of the UCE that is distributed daily. (In fact, some people refer to Wallace as Spamford, a name Wallace has adopted, and as a result of which Hormel, maker of Spam the canned meat product, is suing to stop him from using.) Wallace has also been sued by CompuServe, America Online (AOL) and other Internet service providers. In defending a lawsuit against AOL, Wallace argued that AOL could not block e-mail sent by his company to AOL subscribers because to do so would be an infringement of his right to free speech. In America Online vs. Cyber Promotions Inc., No. 96-5213 (E.D. Pa., Nov. 4, 1996), the court held that AOL is a private company, and therefore is not required to accept Wallace's unwelcomed speech. The court rejected Wallace's argument that AOL acts like a government in Cyberspace, and therefore should be regulated like one.
Building on this case, the district court in CompuServe Inc. vs. Cyber Promotions Inc., No. C2-96-1070 (S.D. Ohio, Feb. 3, 1997), held that not only could the online service block unwelcomed e-mail, but once the e-mail sender was on notice that such messages were unwelcomed, further attempts to bypass technological blocks and send such mail to the service provider's users constituted a trespass upon the service provider's property. While many "spammers" are effectively handled by canceling accounts when they violate the service provider's terms of service (a private contract between the provider and its users), enforcing trespass laws against Internet users brings us back full circle to local regulation of Internet activities.
To return to the initial question: What lessons can be drawn from these examples? Internet regulation is a complex endeavor. Governments will not be readily satisfied with their efforts to control Internet activities, as governments are inherently local in their powers, and the Internet is inherently global in its reach. Governments need always to focus on this aspect of the Internet's networked nature. Whether a governmental authority wishes to provide a service, control content or enforce its laws, a governmental authority will need to shift to a "networked" mindset. Within an international, networked environment there is room for local governments to maintain some of their traditional functions, but only if they consider the implications of their actions in a global context.
Local, state, federal and international law will continue to evolve and define the functions and powers of local governments in cyberspace. To ease the transition, there is one primary lesson to be learned -- the technicians must adopt the politicians. A lot of the poor publicity garnered by agencies, legislatures and courts has been a result of governmental authorities acting with an inadequate understanding of Internet technology and the implications presented by the fastest growing communications medium this planet has ever seen.
David Loundy is an attorney at the Chicago law firm of Davis, Mannix & McGrath, practicing in the areas of intellectual property, computer and entertainment law. He is chairman
of the Chicago Bar Association Computer Law Committee, and is a member of the Illinois State Bar Association Intellectual Property Section Council, for which he chairs the Internet Law subcommittee. Internet:
Copyright
