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posted 12 Jan 2011, 01:47 by Jess Maher

The Import of Jurisdictional Issues Concerning the Internet

The above discussion throws up several interesting questions. One is whether the entire cyber world is in fact getting fragmented in the process of devising laws and procedures reflective of the tension between being overly protective of domestic interests and having too little regulation of the internet.

Wendy Adams contextualizes the pros and cons of ‘universal permission’ as opposed to ‘universal prohibition’ in the following words:

Resolution of the issue of jurisdiction in relation to commercial websites that do not appear to be directed towards a specific territorial market requires that a default legal rule be established in favour of either the location of the commercial website (which may refer either to the location of the initial server, the location of one or more caching servers, or the website operator’s usual place of business), or the location of the person accessing the website (an inquiry which could also be complicated by issues of nationality and residence). A default rule favouring the location of the website would amount to universal permission, whereby the commercial website operator is presumed to be in compliance with local regulation to which he is subject, and individual states must in effect opt-out of this rule by applying indirect regulation to prohibit residents from accessing commercial websites in violation of local laws.

The Internet is caught between old forces of local territorialism and new forces characteristic of global economies. As a result, it may end up being carved up or fragmented into discrete legal spheres - a development which contradicts the hitherto traditional vision of the Internet as a paradigmatic example of a borderless world of global transnationalism.

The fragmentation is taking two forms. The first may be represented as vertical in nature; led by the forces of territorialism, it reflects concerns of public policy and the protection of local values. The second, which may be considered horizontal, is driven by the rationale of commercial efficiency.116 (Emphasis Supplied)

Schultz explains that horizontal fragmentation is driven by rationale of commercial efficiency. This is achieved by constitution of legal systems which are transnational and largely autonomous of State control. He cites the example of eBay’s dispute resolution mechanism.117 The objective of eBay’s dispute resolution mechanism is to avoid the jurisdictional questions posed by the application of state law. On the other hand vertical fragmentation is a result of the forces of territorialism. It reflects concerns of public policy and the protection of local values, e.g., the Yahoo! case. 

“The internet has no territorial boundaries. To paraphrase Gertrude Stein, as far as the internet is concerned, not only is there perhaps ‘no there, there’, the ‘there’ is everywhere where there is internet access.”121

This article traced the difficult and different paths that common law courts traversed in trying to formulate a definitive test which would lend legal certainty in tackling the complex problem of courts exercising jurisdiction in disputes arising out of activities on the internet. The problem is perhaps compounded by the fact that the technology which is rapidly changing is at least two steps, if not more, ahead of the law. The ‘catch up’ by the law appears as of now a mirage.