Yahoo Not Bound by French Law

Marking a key victory for free speech online, a federal judge in San Jose ruled Wednesday that online giant Yahoo Inc. doesn’t have to obey a French court’s order to block Nazi symbols from its service.

Legal experts hailed the decision as one of the first high-profile rulings to address which courts Internet businesses must answer to when their content reaches across international borders.

Yahoo, based in Sunnyvale, Calif., became embroiled in this legal fight with two French groups in April 2000, when one of its sites that hosts auctions offered for sale Nazi memorabilia such as medallions, flags and swords.

The two groups--the Union of French Law Students and the International League Against Racism and Anti-Semitism--accused Yahoo of violating a French law that makes it illegal to sell or exhibit anything that incites racism.

Although the dispute involved data stored on computers in the U.S., a French judge last fall ordered Yahoo to block French residents from viewing Nazi memorabilia in its online auctions.

On Wednesday, U.S. District Judge Jeremy Fogel said the 1st Amendment barred the French court from regulating Yahoo’s speech on the Internet.

In his ruling, Fogel wrote the case had presented “novel and important issues” that could affect “policy, politics, and culture that are beyond the purview of one nation’s judiciary.”

After Yahoo had pulled the Nazi material from its auctions, the company filed a lawsuit in San Jose late last year asking a U.S. District Court to declare French laws unenforceable in the United States. The online company argued that the groups’ attempts to censor third-party content on the Internet violates the 1st Amendment.

“If Yahoo had lost, companies could be subjected to endless grass-roots tyranny, and thousands municipalities in the U.S. alone could demand that online companies customize their services in thousands of variations,” said Adam Thierer, director of telecommunications studies for the Cato Institute, a political think tank in Washington.

Lawyers for the French groups had tried to convince Fogel that Yahoo’s lawsuit was premature because the groups had not asked the court to enforce the ruling in the U.S.

In addition, the French groups had wanted Fogel to grant more time to investigate whether Yahoo had technology capable of blocking visitors in France from accessing Yahoo sites in the U.S.

Officials with the French groups could not be reached for comment.

Yahoo is not the only firm struggling with these legal issues. The leading online auction site, EBay Inc., used to ban hate materials in Germany, France, Austria and Italy. Sellers may not ship such items there, and buyers from those countries may not bid on them.

But earlier this year, EBay bowed to pressure and announced it would ban the sale of all items associated with Nazi Germany, hate groups and murderers throughout its service.

The decision came after EBay removed from its service the sale of a piece of door, allegedly the one an unarmed African immigrant was standing near when he was shot and killed by New York police in 1999.

“Governments are trying to enforce national standards on an international platform, and achieving disastrous results,” said Jeff Cole, director of the Center for Communication Policy at UCLA. “It’s an absolute mess. This Yahoo case is only the beginning.”

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Bloomberg News was used in compiling this report.