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Calling for a mix of technology, self-regulation and international cooperation, an international task force of more than 100 lawyers on July 10 released a draft report on “Jurisdictional Issues Created by the Internet.” The 190-page draft is the product of two years of work by a group of practicing attorneys and academics from 20 countries, according to Professor Amelia Boss of the Temple University School of Law, who helped introduce the report at the American Bar Association’s annual meeting in New York last week. Boss said one question that arose during discussions was whether jurisdiction was really a new issue at all. As an example, she pointed to the movie “Amistad,” which involved, in part, litigation over which laws applied to an incident on the high seas. THEMES Henry H. Perritt Jr., dean of the Chicago-Kent College of Law and the project’s vice chair, offered six themes from the report which suggest that commerce via the Internet is different and deserves different jurisdictional treatment: � Localization of commercial activity on the Internet is difficult. � Targeting is the best touchstone for personal jurisdiction and choice of law. � The Internet has the potential to shift bargaining power in commercial transactions in favor of consumers. � What the report calls “hybrid regulation” may be the best regulatory approach to deal with most jurisdictional problems. Perritt said the term “refers to a general public law framework that sets minimum standards and provides backup enforcement in public institutions, leaving the details to be worked out by private self-regulatory regimes.” � That scheme has two major advantages, he said: it is easily transnational and through a variety of alternative dispute resolution techniques, can offer much lower transaction costs for dispute resolution. � Continued uncertainty with respect to jurisdiction over Internet e-commerce will only encourage more efforts to subject intermediaries — like Yahoo! — to liability. ‘PUSH AND PULL’ OF TECHNOLOGY Project Chairman Thomas P. Vartanian of Fried, Frank, Harris, Shriver & Jacobson in Washington, D.C., said one early question that arose concerned the “push and pull” of technology. In explaining the term, he cited United States v. Thomas, in which the government accused the California operator of a Web site of dispensing pornography. The defendant argued that he disseminated ones and zeros, and couldn’t be liable if the prosecutor’s computer in Tennessee turned standard computer language — ones and zeros — into a pornographic photograph. But why the effort to resolve these jurisdictional questions? Vartanian asked. “Unless we can bring some form of predictability to electronic commerce, it won’t be as facile, it won’t be as efficient and it won’t be as cheap for consumers as it otherwise could be. Said another way, the more electronic commerce is unpredictable, the more that business people can’t find certainty, the more they don’t understand their liabilities and if they don’t understand their liabilities, . . . they can’t price their products as efficiently as they want to,” Vartanian said. “So we thought it would be useful to try to help develop the infrastructure to allow cyberspace and electronic commerce to develop as efficiently as possible both for the commercial business side and the consumer.” GLOBAL STANDARDS The report offers more than 20 conclusions, but Vartanian said they could be summarized in these 10 major ones: � A multinational global online standards commission should be established to study jurisdictional issues and develop uniform principles and global standards. Vartanian said it became apparent early that the committee couldn’t resolve jurisdictional issues itself and no one nation state could do so either. � Intelligent electronic agents should be employed to electronically communicate jurisdiction information and rules. Contracts put a lot of burden on the consumer, Vartanian said, but technology can allow consumers to specify protections or decline to do business with a particular Web site. � Voluntary industrial councils and cybertribunals should be encouraged by governmental regimes to develop private sector mechanisms to resolve electronic commerce disputes. � Self-regulatory regimes should be encouraged to forge workable codes of conduct, rules and standards among a broad spectrum of electronic commerce participants. � Personal prescriptive jurisdiction should not be based solely on the accessibility of the passive Web site. � Efforts to prevent access by users to a site or service through the use of disclosures, disclaimers and software ought to go a long way toward insulating sponsors from global jurisdiction. That, said Vartanian, would allow businesses to target jurisdictions in which they want to do business. � Users and sponsors of Web sites should be encouraged to identify with adequate prominence the state in which they reside. � Safe harbor agreements among nations should be encouraged to resolve jurisdictional conflicts in cyberspace. Vartanian pointed to a safe harbor agreement between the European Commission and the U.S. Department of Commerce as an example. The European Parliament recently disapproved the agreement, however, though the Commission could pursue such a program anyway. � Global regulatory authorities of highly regulated industries should be encouraged to reach agreement regarding how laws will be applied on financial products and services offered on a global basis. � Any use of intermediaries or systemic “choke” points ought to be done with great care and considered carefully. Vartanian said the two most prominent examples are Internet service providers and payment systems and that governments often look to those points to regulate or tax. � Copyright 2000 Mealey Publications, Inc.

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