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A French court has ruled that more technical information is needed before ruling whether to fine Internet giant Yahoo over online sales of Nazi memorabilia. Judge Jean-Jacques Gomez said experts from the U.S., France and another European country should look into ways of blocking the U.S.-based sites that are barred under a French penal code outlawing the trivialization or denial of the Holocaust. Yahoo has argued that it is technically impossible to ring-fence French Internet users from U.S.-based Web sites governed by less restrictive U.S. laws. At issue is Yahoo's auction site, where Nazi medallions, swastika-emblazoned battle flags and other Third Reich paraphernalia can be bought and sold. The case centers on freedom of speech, which is caught between some nations' laws and the Internet's borderless, hard-to-regulate nature.

Independent industry analyst Richard Endersby said the latest delay in the ruling was no surprise and that the experts would now be looking at the feasibility of technically blocking French Internet users from certain sites. "The technology is available which allows the server to find out where the material is coming from," he said. "But one can understand Yahoo's reaction to national governments trying to exert their own laws on other countries." But Endersby said that although the technology can be put in place, the question is the effect on Internet users. "A lot of governments do not want to appear to be heavy-handed because of the obvious economic benefits from the Internet," he said, adding that even with the technology in place a determined hacker could still manage to access the prohibited sites.

The case was brought after two Paris-based human rights groups filed a lawsuit in April against Yahoo for hosting the auctions of Nazi objects. In May, Judge Jean-Jacques Gomez ruled that Yahoo had offended the nation's "collective memory." He ordered the company to pay fines of up to $360,000 a day to the International League Against Racism and Anti-Semitism and the Union of Jewish Students of France, which brought the lawsuit, and to find a way to block French users from the U.S.-based pages in question.

Will Yahoo have to pay the price for its global reach?

Forty percent of the Santa Clara, Calif.-based portal's audience is outside North America, according to Heather Killen, Yahoo's senior VP of international operations. An impressive figure, to be sure, and a major reason why the company boasts a $73 billion market cap. But it is also why Yahoo now finds itself stuck in a French court.

In theory, the company could ignore the French court because it does not have jurisdiction over U.S. businesses. Thus far, however, Yahoo has not missed a court appearance, and it submitted a report Monday from an expert witness who said that a totally effective technology solution allowing Yahoo to block access to its auctions by region could not be implemented. However, one New York-based company, InfoSplit, disagrees with that finding.

Aside from the technology question, however, a murkier issue lies at the heart of the lawsuit against Yahoo. "This case opens up broader issues on Internet jurisdiction -- whether one country has the jurisdiction to regulate the content of Web sites in another country -- that should be discussed and addressed by representative of governments and the Internet industry around the world," Yahoo stated in a news release. At present there is no international treaty outlining international jurisdiction on the Web, an issue that already has been recognized as a potential quagmire for e-commerce.

Yahoo's French legal battle might become a precedent-setting case for any business with a Web site that can be accessed by users around the world. EBay, a Yahoo competitor, is watching the case closely. "Eventually, countries are going to accept practices on how to do business on the Internet. But right now, nobody really knows what form that will take on," says eBay spokesman Kevin Pursglove. Pursglove's take on the case points up the fact that there is no federal legislation or international treaty outlining international jurisdiction on the Web, an issue that already has been recognized as a potential quagmire for e-commerce. It was raised earlier this summer at the Hague Conference, an intergovernmental organization of 47 nations on private international law.

Jeffrey Kovar, assistant legal adviser for the U.S. State Department, who has been representing the U.S. in these ongoing negotiations, testified in a June House subcommittee hearing that the "widening gap" between global commerce and individual court systems could inhibit growth in trade.

Vince Garlock, counsel for the Subcommittee Courts on Intellectual Property, agrees that the uncertainty of which business practices are acceptable on the Web is a growing problem. But he fears that unless a major shake-up occurs in the market as a result of an international dispute, Congress would be left without a clear path to take on the matter. "It is definitely an issue that concerns big companies and mom-and-pop Web sites alike," Garlock says. "The message is to stay tuned."

For now, it seems the best insurance that Internet businesses can buy to avoid a court fight like Yahoo's is a smart lawyer who can decipher the gray areas. According to Killen, Yahoo recently modified its universal terms of service to include a clause warning users that they might encounter material that is outlawed in their country. But the odds that the lengthy legal document will have any bearing on the company's lawsuit in France are probably as slim as the number of users who read it.

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Hitler's Willing Executioners
Ordinary Germans & the Holocaust
by Daniel Goldhagen
Goldhagen reaches conclusions that are both uncompromising and savage, rejecting as inadequate the conventional historical explanations for how an entire country could allow the Holocaust to happen, and gives the first detailed, broad-ranging account of the actual killers of the Jews.