Yahoo! Gets Backing in Nazi Memorabilia Case

In a significant show of support for Web portal Yahoo! (Nasdaq: YHOO), which faces ongoing litigation over the sale of Nazi-related items in France via its U.S.-based Web site, several prominent Internet industry associations and business organizations have filed a “friend of the court” brief on behalf of Yahoo! in U.S. District Court.

The brief argues that U.S. courts may not enforce judgments of foreign courts that lack personal jurisdiction over U.S. defendants, because to do so would violate the dueprocess clause of the U.S. Constitution’s Fifth Amendment. The brief follows another that the Center for Democracy and Technology (CDT) filed in April supporting Yahoo’s position.

At issue is a French court ruling entered last year that states that Yahoo! broke Frenchlaw by allowing the sale of Nazi memorabilia on its Web site to be accessed in France, and that orders Yahoo! to bar such sales.

If the French court’s decision is recognized by U.S. courts, France would have the power to mandate that Yahoo! restrict French citizens from accessing, via its U.S.-based Web site, any material that French law deems illegal. The case is widely viewed as a landmark on the regulation of international, cross-border Internet transactions.

Big Threat

“The decision of the French court in this case represents one of thegreatest threats to the promise of the Internet seen to date,” the briefstates. “Under the French court’s theory of personal jurisdiction, everyAmerican company with an Internet presence would be subject to the personaljurisdiction of every foreign country in the world. Plainly put, such aresult would cripple the Internet.”

The industry groups signing the most recent brief include the U.S. Chamber of Commerce, the U.S. Council for International Business, the Information Technology Association of America, the Online Publishers Association, the U.S. Information IndustryAssociation, and the Commercial Internet eXchange.

According to the CDT, the next hearing in the Yahoo! case is scheduled for August 26th, while a hearing on Yahoo’s motion for summary judgment is scheduled for September 24th.

The Target Question

One of the key points for the U.S. court to decide is whether Yahoo’sconduct had or was intended to have a substantial effect in France.

“In this case, Yahoo!, Inc. does not operate in France,” the brief says.”It operates a Web site based in the United States, targeted at U.S.citizens, in the English language. It has established a separate Frenchsubsidiary that operates a site from France, in French, targeted at Frenchcitizens, that complies with French law.”

The brief also argues that France’s exercise of prescriptive jurisdiction isunreasonable and the activities of Yahoo! are protected by the FirstAmendment.

“Clear recognition of the principle that, where a U.S. company is targetingonline activities at U.S. citizens, the mere fact that the Internet isinvolved does not allow every other country in the world to assertjurisdiction over that company and regulate its activity, is absolutelycritical,” the brief said.

Still Fighting

Earlier in June, the U.S. district court decided not to dismiss the lawsuit filed by Yahoo! seeking a declaration that the French ruling against the Internet portal is an unenforceable order.

Other groups supporting the CDT’s April brief on behalf of Yahoo! included theAmerican Association of Publishers, the Freedom to Read Foundation, the American Civil Liberties Union (ACLU), Human Rights Watch, People for the American Way, and the Society of Professional Journalists.