A Solution to the Yahoo! Problem? The EC E-Commerce Directive as a Model for International Cooperation on Internet Choice of Law

In May 2000, a French court decided that a French law banning the display of Nazi materials for sale applies to an auction website hosted by the California-based company Yahoo! Inc. The following year, at the request of Yahoo! Inc., a U.S. District Court declared that the French judgment was unenforceable in the United States because enforcing it would violate an important public policy-the First Amendment. These two cases have attracted considerable attention because they crystallize a difficult problem. The Internet is global. Every website potentially reaches every home on the planet. Thus, website content or activity that may be legal in the country where the website\u27s operator is based may reach countries where such content or activity is illegal. Which law or laws should apply to the website? Should a website be subject only to the laws of the country where the website operator is based? Or should a website be forced to comply with the laws of every country where the website may be accessible-potentially every country on Earth? In the Yahoo! case, the French court concluded that French law applies to a website regardless of the domicile of the website operator. While not rejecting the French court\u27s analysis of the problem, the U.S. court registered a caveat, essentially holding that at least some fundamental U.S. legal principles should apply to website operators based in the United States, regardless of where their websites may be accessible. Much of the debate surrounding the French court\u27s decision and the U.S. court\u27s response has centered—not surprisingly—around whether the courts reached the correct conclusions, and what the implications of those conclusions might be for the future of the Internet. Instead of attacking or defending the French or the U.S. courts, this Article proposes to focus on the Yahoo! case from a different perspective. As is argued in this Article, disputes like the Yahoo! case over which country\u27s laws apply to a website and its operator seem likely to proliferate as Internet usage expands, demanding significant enforcement resources from countries and posing important compliance challenges for companies and other organizations operating on the Internet. Thus, it may be useful to consider developing an international agreement that would address, and in many instances resolve, such disputes about “jurisdiction to prescribe” rules for the Internet. In developing this argument, this Article uses as its point of departure a set of rules that already applies to France—one of the protagonists in the Yahoo! case