European Court rules on Internet jurisdiction

Where do things happen online? This is the eternal question of Internet regulation. While we like to think of the Internet as a global medium, increasingly we are faced with a regulatory clampdown and real-world solutions to online incidents. The latest decision dealing with online jurisdiction comes in the shape of Bolagsupplysningen OÜ and Ingrid Ilsjan v Svensk Handel AB (Case C‑194/16), an online defamation case.

The case involves Svensk Handel, the Swedish trade federation of the commercial sector, and the Estonian company Bolagsupplysningen, which  offers corporate search services and conducts its businesses mostly in Sweden. One of Svensk Handel’s functions is to provide consumer information with regards to dubious commercial practices, and it lists several websites that engage in potentially damaging and/or fraudulent practices. Svensk Handel has an entry on Bolagsupplysningen (still live at the time of writing), which warns users that the Estonian company sends out incorrect address forms to its customers, which when sent back contains a clause to sign up for a business subscription. The page has comments open (over 1600 at the time of writing), most of them of consumers criticising the Estonian company and offering their own experiences.

Bolagsupplysningen sued Svensk Handel in an Estonian court for defamation, alleging that both the information on the page and the comments were defamatory. They claim that the comments were filled with insults and even death threats to its employees. The Estonian court in first instance rejected the claim because the page was published in Sweden and it was in Swedish, so no damage could be established in Estonia; furthermore the fact that the content had been published in Estonia via the Internet did not not automatically justify an obligation to bring a case before an Estonian court. The case was appealed, and the Talinn Court of Appeal sided with the first ruling. The decision was then appealed to the Estonian Supreme Court, which decided to stay the proceedings and deferred three questions to the Court of Justice of the European Union.

  1. Can a legal person sue for the entire harm caused by infringing comments online in the country where the information was accessible?
  2. Can a legal person sue for the entire harm caused by infringing comments online in the country where the that person has its centre of interest?
  3. In case question 2 is affirmative, in which jurisdiction could the injured person seek remedies?

The CJEU answers the first question quickly in the negative by ruling that a person “cannot bring an action for rectification of that information and removal of those comments before the courts of each Member State in which the information published on the internet is or was accessible.” This is the most logical conclusion, as a positive answer would have opened the floodgates to online defamation suits in all Member States with no other connection than the fact that some information was published online. That way madness lies.

The Court merged the second and third questions, and delved on the underlying legal issue in more detail. The Court posed the legal question thus:

“…a legal person claiming that its personality rights have been infringed by the publication of incorrect information concerning it on the internet and by a failure to remove comments relating to that person can bring an action for rectification of that information, removal of those comments and compensation in respect of all the damage sustained before the courts of the Member State in which its centre of interests is located and, if that is the case, what are the criteria and the circumstances to be taken into account to determine that centre of interests.”

The previous authority in this subject from the CJEU had been eDate Advertising and Others (C‑509/09 and C‑161/10), in which it was decided that the main consideration when it came to online jurisdiction for a tort, delict or quasi-delict was to bring an action where the harmful event had taken place, or will take place, the Court was clear to interpret it broadly, and commented that this can be deemed to be as the same place where the person resides, as this is where the harm could occur the most, taking into account that the damage will be “felt most keenly at the centre of interests of the relevant person, given the reputation enjoyed by him in that place.” (at para 33). The Court explains this reasoning further:

“Thus, when the relevant legal person carries out the main part of its activities in a Member State other than the one in which its registered office is located, as is the case in the main proceedings, it is necessary to assume that the commercial reputation of that legal person, which is liable to be affected by the publication at issue, is greater in that Member State than in any other and that, consequently, any injury to that reputation would be felt most keenly there. To that extent, the courts of that Member State are best placed to assess the existence and the potential scope of that alleged injury, particularly given that, in the present instance, the cause of the injury is the publication of information and comments that are allegedly incorrect or defamatory on a professional site managed in the Member State in which the relevant legal person carries out the main part of its activities and that are, bearing in mind the language in which they are written, intended, for the most part, to be understood by people living in that Member State.”

The Court then answers the referred questions:

“The answer to the second and third questions therefore is that Article 7(2) of Regulation No 1215/2012 must be interpreted as meaning that a legal person claiming that its personality rights have been infringed by the publication of incorrect information concerning it on the internet and by a failure to remove comments relating to that person can bring an action for rectification of that information, removal of those comments and compensation in respect of all the damage sustained before the courts of the Member State in which its centre of interests is located.
When the relevant legal person carries out the main part of its activities in a different Member State from the one in which its registered office is located, that person may sue the alleged perpetrator of the injury in that other Member State by virtue of it being where the damage occurred.”

For the most part this seems like a rational decision based on the law, but not such a good ruling regarding the specifics of this case. It feels strange to give jurisdiction to a court in Estonia for a potential defamation occurring in a Swedish website, published in Swedish and dealing mostly with Swedish consumer issues, even if the company is based in Estonia. While it is understandable that the harm may occur where the person resides and conducts businesses, the harmful act itself took place in Sweden. The Court leaves this option open as well, the result being that at least in principle those affected by defamation (or other civil harm) could sue in both the country where they reside, and where they hold their centre of interest.

I for one do not see any changes to current practices, but I am willing to see what others think.


Source: Technollama

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