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Two recent developments from overseas serve as reminders that U.S. companies that do business in other countries may face liability for violations of local laws. The first illustrates the fact that many of the freedoms that Americans take for granted are not available in other countries. In April, two Paris-based human rights groups filed a lawsuit against Yahoo! for hosting auctions of Nazi objects. They won the first round in May, when a French judge ruled that Yahoo! had offended the nation's "collective memory" and ordered it to pay fines of up to $360,000 a day to the two plaintiffs, and to find a way to block French users from the U.S.-based pages in question. Yahoo! asked the court to reconsider, and on August 11, the court ruled that it needed more technical information before it could decide whether to fine the company.

The other development is a new illustration of an old reality: it is not only the United States that has antitrust laws. Microsoft, of course, has had its antitrust problems in this country; now it is facing similar problems in both Europe and India.

On August 11, the antitrust enforcement agency in India announced that it was beginning proceedings against Microsoft for monopolistic and restrictive trade practices in connection with its sales of software in that country. The agency said that its preliminary investigation showed that Microsoft had imposed conditions on vendors of its products that improperly restricted sales by other software companies. Read about it:

http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3D9H2SRBC&live=true
&tagid=ZZZC00L1B0C&subheading=information%20technology

Meanwhile, the European Commission announced it was extending its antitrust investigations of Microsoft to cover allegations that it abused its position in personal computer operating software to drive out competitors in the server software market. More information:

http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3SUJETGBC&live=true

COMMENT: It is no surprise to anyone, by this time, that nearly every new business opportunity created by the Internet has been accompanied by a new legal issue. The lesson for U.S. businesses is that if they intend to attract customers in other countries -- either the old-fashioned way, through a live sales force on the scene, or the new electronic way, through the Internet – they must be aware of the effect of local laws on their activities. A great deal of Internet commerce falls under the rubric, in the U.S., of protected expression, but no other country has the same commitment to free speech that we do. Speech on the Internet, whether it is commercial or political or anything else, has fewer protections in most other countries, so American citizens who subject themselves to the laws of other nations by using the Web to actively solicit business there must be aware of the more restrictive laws of those nations regarding libel, hate speech, adult themes, and political commentary in general.

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Charles F. Hinkle
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