December 21, 2000 10:30 AM PST

Yahoo: Auctions immune from French laws

Web giant Yahoo filed for a declaratory judgment in a U.S. federal court Thursday morning to show that the French government has no jurisdiction over the company's operations.

The case is significant because it will show whether political borders can exist in the free-flowing Internet. The case also raises complex questions about whether companies can and should police the content on their sites to prevent any international legal violations.

Yahoo is asking the judge to rule that a French court cannot hold a U.S.-based company accountable for breaking French law. The company argues that the French court has jurisdiction over its Yahoo France subsidiary but not over the Santa Clara, Calif.-based Yahoo.com.

The filing comes a month after a French court ordered Yahoo to devise a way to block Nazi paraphernalia from being auctioned through its site in countries where the items are outlawed, such as France. The court also said Yahoo would be charged a fine of $13,905 (100,000 francs) each day for supporting the Nazi items on its auction site.

A declaratory judgment filing asks a judge to rule on a case before the opposing party tries to take action. In this case, should the French court begin fining Yahoo, the French plaintiffs can come to the United States to ask a court to enforce the fines. If Yahoo wins a declaratory judgment in its favor, the company could simply point to the order to prevent any enforcement of fines.

"We can say this is not the kind of order that American courts can enforce," said Greg Wrenn, an associate general counsel at Yahoo.

The fines would go into effect three months after the French court serves its order to Yahoo. The court has ruled in favor of the French plaintiffs but has yet to serve the ruling.

Wren added that it would be "impossible" for Yahoo to comply with the French ruling. Web companies cannot determine where people are accessing their sites, so Yahoo wouldn't know whether one Internet Protocol address is coming, for example, from France or from Fremont, Calif. Wrenn added that the human and economic resources to block, filter and police content on the company's site would be difficult and ineffective.

Yahoo filed for the declaratory judgment in the federal district court in San Jose, Calif., according to a company representative.

 

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