SYDNEY, Australia — In a landmark case, Australia's highest court yesterday gave a businessman the right to sue for defamation in Australia over an article published in the United States and posted on the Internet.
Analysts believe the ruling against international news service Dow Jones & Co. — believed to be the first by a nation's final court of appeal to deal with Internet defamation — could set a precedent for courts around the world and affect publishers and Web sites that post articles in the 190 nations that allow defamation cases.
"It's a judgment that will be looked at very closely by people in this area including the media right around the world," said Dr. Matthew Collins, a Melbourne lawyer and academic who has published a book on defamation and the Internet.
"What it means is that foreign publishers writing material about persons in Australia had better have regards to the standards of Australian law before they upload material to the Internet," he said.
The High Court of Australia unanimously dismissed an appeal by Dow Jones & Co. aimed at stopping a defamation suit in Australia by mining magnate Joseph Gutnick.
Gutnick claimed that a 7,000-word article that had appeared in Barron's in October 2000 portrayed him as a schemer given to stock scams, money laundering and fraud. The article was also published online.
The decision means Gutnick can sue New York-based Dow Jones & Co. in his home state of Victoria, in Australia.
Dow Jones & Co., which publishes The Wall Street Journal, Barron's, Dow Jones Newswires and several stock market indicators, said it was disappointed with the ruling and promised to continue its defense.
"The result means that Dow Jones will defend those proceedings in a jurisdiction which is far removed from the country in which the article was prepared and where the vast bulk of Barron's readership resides," it said in a statement.
Several media and Internet organizations, including the Associated Press, Amazon.com and AOL Time Warner, filed legal briefs in support of Dow Jones.
Lawyers for Dow Jones argued that the case should be heard in the United States because the article was first published in New Jersey and intended for a U.S. audience.
Gutnick said the case should be heard in his hometown, Melbourne, since people in Victoria could see the article on the Internet and he was thus defamed where he is best known.
"It will certainly be re-established that the Net is no different than the regular newspaper," he told Australia's Channel Nine television. "You have to be careful what you write and if you offend somebody or write malicious statements about people like what was done in my case you can be subject to being prosecuted."
The judgment means material published on the Internet is deemed to have been published in the place it is viewed online, not just the country of origin.
"I think it will be accorded great respect by courts around the world, particularly those which have an English common law heritage like Britain, Canada, New Zealand," Collins said. "I would also expect it to be studied very closely in the United States where courts are also grappling with the same question and it may be that this judgment offers them some guidance as well."
However, the seven-judge court imposed some limits on defamation actions.
In its ruling, the court dismissed Dow Jones' concerns that many defamation actions could be brought as a result of one publication. It said after any successful defamation action, subsequent legal action could be viewed as "vexatious" and therefore unlikely to succeed.
The court dismissed Dow Jones' contention that it would have to consider the defamation laws from "Afghanistan to Zimbabwe" in every article published on the Internet.
"In all except the most unusual of cases, identifying the person about whom material is to be published will readily identify the defamation law to which that person may resort," the court said.
Yesterday's ruling in Australia's highest court of appeal made no decision on the defamation case itself. Gutnick will have to pursue his case in the Victoria Supreme Court.
First Amendment attorney Floyd Abrams told The Wall Street Journal for a story in today's editions that the ruling effectively "puts at risk the ability of Americans to speak with each other and be protected by American law when they do so."
"If Dow Jones is subject to a Singapore court ruling on things communicated from one American to another within the U.S. because it related to Singapore, then the very availability of the Internet as a place where people can communicate will be imperiled," Abrams was quoted by the newspaper as saying.