French Court Decision Leads to Dip in
Shares
By Kelly S. Mittleman
Yahoo! Inc. has been socked twice this week-first
by a Paris judge who ordered the site to block French citizens
from taking part in auctions of controversial Nazi memorabilia on
the company's English-language Web site, then via an alarming
tumble in the company's stock. Consumer confidence in the
mega-Internet search engine giant deflated as shares fell sharply
after the "blocking" news - down 4.63 percent (NASDAQ,
symbol:YHOO)).
The Paris court's decision on November 20 followed
a preliminary ruling in May when French judge Jean-Jacques Gomez,
in response to a lawsuit filed by the International League
Against Racism and Anti-Semitism (LICRA), asked Yahoo!.fr.com to
put a filtering system in place that would block French users
from viewing allegedly offensive material involving Nazi items
ranging from flags with swastikas to belt buckles.
Judge Gomez has given Yahoo! Inc., three months to
find a technological alternative to keep French Web surfers from
accessing the site. If Yahoo! does not comply with the order
after the deadline expires, the company will be fined $13,000 for
each day of non-compliance.
According to Auction Watch's Daily News, Yahoo!'s
associate general counsel international, Greg Wrenn, says the
case is not over. "The real issue is whether there is any
meaningful limit to a court's jurisdiction in cyberspace." Wrenn
also said that for the ruling to stick it would first have to be
enforced by a US court.
According to Wrenn, there are technical problems
behind blocking French access. The filtering process involves
identifying a geographic location, identifying the content in
question, and blocking one from the other. This process,
according to Yahoo! executives, is only successful about 70
percent of the time.
"It is impossible to comply with that order,"
Wrenn told the Associated Press. "The judge's main order ...
nobody has the technology to comply with that."
But officials from Redwood City-based Quova Inc.
say they've got technology that identifies where users log on,
making it possible for Yahoo! to block certain sites from French
users.
The company is developing software called
GeoPoint, which targets locations where users are accessing the
Internet, said Mitchell Golden, company co-founder.
Once Yahoo! determined where users were logging in
from, Golden told AP, it could then filter out Web pages deemed
inappropriate for users in France.
Yahoo! contends that because of its vast number of
users on its site (166 million) there is no way of previewing
posts. Wrenn added that computer experts looking to resolve the
problem have suggested using a keyword to block auction items
that have the word Nazi in them. Using The Diary of Anne
Frank as an example, Wrenn says, "that would have to come
down [by blocking] because it has the word Nazi in it."
Yahoo! has at least two appeals available in
France, making the case far from over. One thing is for certain
in this case: the legal ramifications of the final decision could
have far-reaching results for the future of e-commerce on the
Internet.
