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Protecting Internet Freedom In Friendly Countries

In late 2006 some schoolchildren in Turin, Italy, filmed themselves bullying an autistic classmate. They then uploaded the clip to Google Video.

No one at Google knew these children. No one at the company saw the video before it was posted. When Google was notified of the video’s existence, it immediately took it down and worked with the police to identify who had uploaded it. But last month, four Google executives were tried in absentia on criminal charges stemming from the video.

Peter Fleischer, Google’s chief privacy counsel, David Drummond, senior vice president and chief legal officer, and George Reyes, a former chief financial officer, were found guilty by a Milan court of violating Italy’s privacy code. The fourth executive was acquitted.

The trial was just one battle in an ongoing fight between Google and the Italian government. Prime Minister Silvio Berlusconi and his allies in Parliament are trying to pass legislation that would require anyone who regularly uploads videos to the Internet to obtain a license from the Ministry of Communications, a move that would threaten the Italian business of Google’s YouTube. Separately — but not entirely separately — Italy’s only major private television network, Mediaset, is suing Google over copyright violations for network material that users have uploaded to YouTube. Mediaset just happens to be owned by Prime Minister Berlusconi.

Italy argues that platforms that host user-generated content should be responsible for policing that content. For some sites with limited interactivity, this might be feasible. For example, I consider it to be my responsibility to ensure that no libelous comments are posted to this blog. But YouTube, which was acquired by Google in 2006, has millions of user-created videos, making it impossible for employees to review each one.

In a response to the trial posted on Google’s blog, Matt Sucherman, vice president and deputy general counsel, wrote, “If...sites like Blogger, YouTube and indeed every social network and any community bulletin board, are held responsible for vetting every single piece of content that is uploaded to them - every piece of text, every photo, every file, every video - then the Web as we know it will cease to exist, and many of the economic, social, political and technological benefits it brings could disappear.”

The United States has an interest in preventing this from happening, partly because of our commitment to the principle of free expression, and partly because rulings like that of the Italian court create an open season on American businesses and their employees.

While the U.S. routinely advocates Internet freedom in places like China, Russia and Iran, it tends not to say much about how allied countries regulate information. Those countries do not always share our ideas of how much freedom is appropriate. In Britain, for example, the media are only permitted to report on certain preliminary judicial proceedings in a highly circumscribed way, revealing only the most basic details. Britain’s Official Secrets Act also allows the Attorney General to issue gag orders on the press with regards to sensitive information. In 2005, then-Attorney General Lord Goldsmith threatened newspapers with prosecution if they published the contents of a leaked transcript of a meeting between Prime Minister Tony Blair and U.S. President George W. Bush.

The treatment of British journalists (and other residents) and British businesses is Britain’s business, of course. But it would be highly problematic if, for example, Britain tried to prosecute The Washington Post and its U.S.-based executives over a story published in its U.S.-based newspaper and on its Web site.

In the “Pentagon Papers” case of New York Times Co. v. United States, the United States Supreme Court ruled in 1971 that, in order to impose any prior restraint on publication in this country, the government must be able to prove that the publication would cause “grave and irreparable” damage. This means that neither Britain’s restrictions on everyday criminal court reporting nor, in many cases, its application of the Official Secrets Act would be upheld in an American court.

We need to stand for the principle that speech is not a crime. When someone’s privacy is violated, the appropriate response is a civil suit, not criminal prosecution. The advent of the digital age makes it increasingly necessary for us to address our allies’ more subtle limitations on freedom of speech. As content becomes less bounded by geography, restrictions in one country have greater repercussions in other countries.

The United States also must consider that, in large part because of our freedoms, this country is the media capital of the world. Unchallenged, actions like that of the Italian court and government could put American media companies in jeopardy.

To protect our businesses and our citizens, we need to modernize the rules governing international trade to cover the trade in information. Such modernization should limit the damages that foreign courts can award in suits against nonresident businesses and individuals. If a Google server in the U.S. hosts a video from somebody in Italy, the amount of damages Google owes should be based on the volume of Google’s business in Italy, rather than its worldwide revenue. If Google has $1 million in sales in Italy, an Italian court should not be able to award $1 billion in damages against the company.

Without this protection, foreign courts and governments have a license to prey on large American (and other) companies. If a claim is much larger than a company's business in the jurisdiction where the claim arises, that claim should be adjudicated in the courts of the company's home country and under the home country's rules

Too often, American corporations are left to fend for themselves against sovereign governments. It's an unfair fight for even the largest companies. If we want to remain home base for large international businesses, Washington is going to have to come to their defense when they need it.

Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s most recent book, The High Achiever’s Guide To Wealth. His contributions include Chapter 1, “Anyone Can Achieve Wealth,” and Chapter 19, “Assisting Aging Parents.” Larry was also among the authors of the firm’s previous book, Looking Ahead: Life, Family, Wealth and Business After 55.

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