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 on 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 Organisation 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.
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 US-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 US laws.
A US 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 US 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 US 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 US."
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 favourable to their cause. What's more, US 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 US law.
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 US 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 US citizen, could the site be shut down for violating US laws?
In the patent arena, issues are equally as muddy. US 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.
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."
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