A French Leash for Yahoo?

Not yet, anyway. A U.S. Appeals Court ruling over a free-speech issue likely won't result in the portal having to follow French law

By Ben Elgin

Yahoo!'s four-year tussle with the French courts, involving free speech and national sovereignty, took a weird little turn this week. France insists that Yahoo violates its laws by allowing French users access to information it deems illegal, but Yahoo maintains that forced compliance of its U.S. sites to French law would infringe on its freedom of speech.

In 2000, French courts ordered Yahoo to filter from customers in France any information regarding the sale of Nazi memorabilia. Such material is illegal in France. But later that year, the U.S. District Court for the Northern District of California deemed the French court's ruling unenforceable in the U.S. That changed on Aug. 23, when the U.S. Court of Appeals overruled the district court on a legal technicality, stating it had overstepped its jurisdiction.

It's still unlikely that Yahoo will be forced to change its U.S. Web site to adhere to French law. The Appeals Court merely ruled that any such U.S. court judgment can't be made until enforcement of the French court's ruling is sought in the U.S.


  This hasn't taken place, nor may it ever occur. "There does not appear to be a strong likelihood of someone trying to enforce this action in the U.S.," says Richard Jones, who formerly represented the French litigants and is now special counsel at law firm Covington & Burling.

Even if little changes, this case remains near the center of an important Internet debate. Countries boast differing rules on free speech and certain types of commerce. Yet, such regulations are easily flouted by the borderless world of the Internet.

U.S. courts have been on the other side of this issue as well. Online casinos, for instance, aren't allowed to do business with Web surfers in the U.S. But these businesses are often run out of places like Antigua and Costa Rica, where online gaming is legal. As a result, millions of Americans place bets with online casinos that which operate beyond the arm of U.S. law.

Elgin is a correspondent in BusinessWeek's Silicon Valley bureau

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