NETHERLANDS: Global Treaty a Threat to the Net?

International policy-makers this week ended a round of talks aimed at
setting common rules affecting online trade and commerce, but they made
little progress in bridging divisions that threaten to delay the pact.

In the works for nearly a decade, the Hague Convention on Jurisdiction and
Foreign Judgments is still almost unknown outside international policy
circles. Nevertheless, it could have broad implications for consumers and
businesses by setting new rules for online copyrights, free speech and
e-commerce--if it is approved.

Opposition to the treaty heated up Wednesday, when a two-week drafting
session wrapped up with few concessions to critics, primarily from the
United States, who say the pact threatens free speech and could force
Internet service providers to become global content police.

"In a nutshell, it will strangle the Internet with a suffocating blanket of
overlapping jurisdictional claims, expose every Web page publisher to
liabilities for libel, defamation and other speech offenses from virtually
any country, (and) effectively strip Internet service providers of
protections from litigation over the content they carry," Jamie Love,
director of Ralph Nader's Consumer Project on Technology (CPT), wrote in a
report after the meeting.

The treaty is one of several efforts by the global community to grapple
with a complicated legal issues on a borderless Web.

Four years ago, nations including the United States signed onto a World
Intellectual Property Organization pact to protect copyright in the digital
age. And several countries, including the United States, are hammering out
the world's first cybercrime treaty, which would provide a standard for
fighting online crime.

The Hague treaty differs from those efforts because it would not outline
specific laws participants must follow. It's much broader, requiring
participants to agree to enforce each others' laws on a variety of topics.
As it stands, the treaty would require courts to enforce the commercial
laws of the convention's 52 member nations, even if they prohibit actions
that are legal under local laws.

Until now, many countries and companies have wrangled with jurisdictional
disputes on a case-by-case basis. In the brick-and-mortar world, companies
doing business in a foreign country must abide by the laws of that land.
However, because the Web allows companies to sell items and services to
people in foreign countries without requiring them to leave home, it
promises to spawn a legal tangle some think can be solved only by a treaty
outlining global rules for cross-border litigation.

No Legal Borders

A glimpse of the cross-border problem was already seen in the Yahoo
Nazi-paraphernalia case. Last year, a French court ruled that Yahoo must
block French citizens' access to online auctions of Nazi memorabilia on its
U.S.-based site or face fines of $14,000 per day because the items violated
France's hate-speech laws. In response to the ruling, Yahoo pulled the Nazi
paraphernalia, even though it's protected under U.S. laws.

A U.S. court is considering whether to declare French laws unenforceable in
this country, but the treaty, if enacted, could make that difficult.

Diverse opponents have criticized the treaty, among them librarians, online
stores and global ISPs. However, few of those groups managed to insert
major changes in a new draft of the treaty hammered out over the past two
weeks.

Delegates did not soften speech laws to provide for countries that value
the exchange of information. In addition, they strengthened some
intellectual property provisions--over the objections of consumer groups.

"The bottom line is that it didn't go well," said Barry Steinhardt,
associate director of the American Civil Liberties Union, which sent
representatives to the convention. He said that although American delegates
listened to free-speech worries, most others did not.

CPT's Love agreed. "We got our ass kicked," he said. "It was a bad two
weeks for us."

Free-speech advocates fear U.S. citizens could lose many of their rights if
all Web sites have to ensure they are following the narrowest laws, such as
those of, say, China or Morocco.

They point to worst-case scenarios. For example, a site criticizing
government wrongdoing--which is legal by U.S. standards -- might have to shut
down because it runs afoul of laws in some other countries.

In a letter to Hague convention delegates sent last week, the American
Library Association wrote: "We are concerned that the draft
convention...could subject Internet users in the United States to
intellectual property infringement in other countries for activities that
are lawful in the U.S."

But delegates point to an exemption that allows judges to refuse to enforce
judgments in countries where they would violate that region's public
policies. "We're not using this treaty as a vehicle to change laws," said
one convention delegate who asked not to be named.

However, critics say those exemptions don't go far enough and don't prevent
litigants from shopping around for a forum most favorable to their cause.
What's more, U.S. judges may be reluctant to overturn a ruling under the
treaty because they would not want a judge in another country to refuse to
enforce a U.S. law.

Network Watchdogs

But it's not just the consumer groups against big business. The corporate
world is equally divided.

ISPs that do business globally worry that they may have to act as Net
policemen, scouring the Web to make sure sites they host don't break the
laws of any convention member country.

Under U.S. laws, service providers are not required to monitor their
networks for copyright violations. They're obligated to take down
infringing sites only after a copyright owner notifies them. But under the
treaty, countries with more strict requirements may crack down on ISPs that
don't snoop on their customers' behavior.

Sarah Deutsch, associate general counsel for Verizon Communications, said
the treaty, as it stands, could disrupt e-commerce because Web
infrastructure companies would have to worry about every transmission that
moves over their network. Despite complaints from her company, AT&T and
Yahoo, the delegates did not insert protections for ISPs and portals into
the treaty.

"On the whole we were very disappointed that many of our key concerns were
not addressed," Deutsch said.

There's also speculation that the treaty could endanger other Web
transactions that are legal in some countries but not in others, such as
Internet gambling. For example, if a site in the United Kingdom, where
gambling is legal, took a bet from a U.S. citizen, could the site be shut
down for violating U.S. laws?

In the patent arena, issues are equally as muddy. U.S. companies have been
on an aggressive, and successful, crusade to patent all things
software-related. Not so in Europe. Theoretically, the treaty could require
foreign countries to enforce strict U.S. patents in their homeland. Plus,
it could make those who post or link to technology that's controversial in
the United States, including the DeCSS DVD-cracking code or certain types
of encrypted communication, illegal worldwide.

"People don't realize what a disaster this could be," said Richard
Stallman, president of the Free Software Foundation, who added that his
worries apply to all software, not just the free kind.

Cheers for Copyrights

The only groups that seem to have positive comments about the treaty are
copyright holders, who hope the pact will let them crack down on
infringement in new and more stringent ways.

"The draft convention may advance, in some respects, the effective
protection of copyright--particularly as the convention relates to
enforcement of judgments," a group including the Association of American
Publishers, the Business Software Alliance, the Recording Industry
Association of America and the Motion Picture Association of America wrote
during a comment period on the convention.

In other words, those groups hope to apply the laws of countries with the
strictest copyright restrictions to gain control of their products.

For example, some countries don't have the same balance that the United
States does between the rights of consumers and copyright holders--such as
fair use (which includes the ability to make copies for personal use) or
sampling (which includes the ability to take a brief snippet of a book,
song or other work for the purposes of review). Therefore, a copyright
holder who wanted to maintain control over his or her work could shop for a
court in a country that would crack down on any use of that work.

Because so many groups with so many competing interests are wrangling over
the treaty, it's unlikely it will be ratified anytime soon. Negotiations
have been going on since 1992.

The Internet added a new twist to the debate over jurisdiction, dragging
out the process for years. A final version of the treaty is not expected
until 2002, at the earliest. And the United States could always refuse to
sign it, a move that could take the teeth out of the Web portions of the
treaty because it is home to so many Internet companies.

Still, Stallman and others hope that more people will rally to fight the
treaty as they learn of its potential impact, by contacting delegates and
lawmakers. "We can't assume it will die of its own accord," he said. "We
have to stop it."

• 192 Technology & Telecommunications