1- WHAT IS THE JURISDICTIONAL RELEVANCE OF THE PRESENCE ON A STATE TERRITORY OF THE INTERNET NETWORK INFRASTRUCTURE SUCH AS A SERVER?
The French law distinguishes 2 types of communication : private correspondence such as e-mail (where the 2 correspondants are identified) and audio-visual communication (open communication, where the receiver is not identified and this communication can transfer other materials such as voice, writing, sounds, signs, etc.).
The Web is considered as being regulated by the audio-visual communication law (website, forums, etc). Most services on the Net are under that law.
From that point of view, the presence of a server in France can have some ramifications. Upon launching the service, the server is required by law to identify itself to the court in writing and to identify a person liable for information posted or made available on the server.
According to the law, the individual who is at the origin of the release of information is the liable party (= server). However, compared to other media, the identification of the liable party is somewhat difficult.
The law may investigate the liability of any person who allows the disemination of the information even if it is only a technical operator.
In view of this, the Court has recognized the liability of a host when illegal contents have been hosted.
In the aforementioned case, the Court considered that the operator was not acting as a mere technical operator but as an operator providing an anonymous service of hosting without having performed any checking on his own behalf.
For example, the HALLYDAY case
- TGI PARIS, référé, 09/06/98, Aff : Estelle HALYDAY c/ ALTERN
- CA PARIS 14ème Ch., Section A, 10/02/99, Aff : Estelle HALYDAY c/ ALTERN
Photos of Estelle HALLYDAY were presented on the website [altern.org/silversurf], showing her in a state of undress. These photos had been taken from her private collection. Each individual has an absolute right to his or her own image and its use and retains the right to oppose any copying and distribution on any type of medium.
This posting caused Estelle HALIDAY a manifestly unlawful disturbance.
The website was anonymous.
The focus was the liability of the host which created this anonymous service.
The Court decided that even if the photographs in question are no longer accessible, having been withdrawn from the site, it nevertheless remains true that the posting of this information renders liable the person who domiciled (hosted) "anonymous" on the site said person created and managed. Any person who requests such hosting with a view to making signs, pictures, sounds, messages available to the public of whatever nature and which, do not constitute private correspondence but audio-visual communication.
That person's responsibility is justified by the fact that it goes beyond the technical role of a broadcaster of information.
As a result, each technical operator present on French territory can be considered liable because such operator allows data to be released on the Internet.
The prevailing doctrine estimates that these technical operators should not be considered liable for the information created by others that they host.
A draft of a European directive (18/11/97) concerning e-business points out that members states can not require the operators liable for hosting withour personal knowledge.
According to the draft, the liability of the operator could not be engaged if the operator was not aware of the illegal activity and if he or she took action once aware, immediately ceasing and desisting.
In France, a draft by Mr Patrick Bloch proposed adding a chapter in the law of audio-visual communication (30/09/86) that would give the power to the judge to evaluate the content of a website and determine the liability of people who make access to information possible.
As a result, any Internet network infrastructure can be liable (except the telecommunication operator) and if the victim is in France and if the server is also in France there is no barrier to enforcing the judgement.
In some particular cases of intellectual property, such as counterfeiting, the fact of having a certified report is enough to be under jurisdiction in France, wherever the defendant may reside.
However if the server is in France, the judgement will be enforced.
2- WHAT IS THE JURISDICTIONAL RELEVANCE OF MAINTAINING A WEB SITE?
2-1 Contract liability
After extended discussion, a report (report of Mr Francis LORENTZ) considered that doing business on the Internet can not result in a merchant being required to respect all laws and regulations of every country around the world.
The issue is that by conducting world wide business, the merchant can be sued everywhere, depending of the nationality of the claim.
A distinction has to be made between B 2 B and B 2 C.
In B 2 B, parties can be chosen without any risk to their law and jurisdiction.
In B 2 C, the situation is different.
The consumer has the choice of bringing the suit before the Court of the territory of his legal address, or the Court of the merchant's.
Conversely, action against a consumer can only take place within the national jurisdiction of the consumer.
The Convention of Brussels (1968) was modified due to electronic business.
The general principle is that the consumer faced with a problem can bring a suit before the Court of his own address.
This point creates substantial risk for merchants because it means they would have to be defended within all jurisdictions of the various European countries.
The draft is trying to define / to determine that the activity of a merchant is considered as targeted at a consumer when the consumer has electronic access to the services or products and if the consumer can conclude a transaction for goods and services.
(Merchants disagree with that draft.)
Since it is targeted, that consumer can having jurisdiction of his adders.
In the application of national law, maintaining a website is sufficient to be under French law and before the French Court.
However, I have observed some changes.
A European draft concerning the future of selective distribution delineates between active and passive website.
From that point of view, the passive website (a maintained website) can not be indicted for maintaining a website which offers for sale products subject to the agreement of selective distribution without the agreement of the manufacturer of the products and services.
2-2 Personal jurisdiction
FAURISSON case TGI PARIS 13/11/98 17ème Ch Correctionelle
A French Court is competent to rule on facts surrounding the publication of revisionist texts on a website set up abroad insofar as the text can be picked up in and viewed in that Court's jurisdiction.
(However, the accused party must be discharged once it becomes clear that even if he is the author of the incriminated text, and there are no facts to prove beyond doubt that he personally took part in the indicted facts).
The Court based its judgement on provision L133.2 A.2 Code Pénal :
"L'infraction est réputée commise sur le territoire de la république dès lors qu'un de ses faits constitutifs a eu lieu sur le territoire."
If one part of the offense is committed in France, then the totality of the offense is considered as having been committed in France and French jurisdiction is competent.
The Court considered the offense as committed in France because the broadcast was received in France, so fell within the competence of the Court.
In another case (Saint Tropez Trademark case, TGI DRAGIGNANT) concerning the trademark "Saint Tropez", the Court considered itself competent in appliance of the criteria of the "forum of the harm";
The criminal French Courts apply the theory of reception instead of emission.
French criminal Courts consider themselves competent to judge as well servers as the authors of information abroad as soon as the information has been received inside national territory.
3- IF A WEBSITE AUTHOR CANNOT PREVENT ACCESS TO ITS SITE FROM ANY COUNTRY, WHAT IS THE JURISDICTIONAL EFFECT OF A GEOGRAPHIC DISCLAIMER ON THE SITE ?
A disclaimer does not have any effect in personal liability.
The distinction of B 2 B and B 2 C is relevant to a disclaimer.
There is no reason the disclaimer will not apply in a B 2 B relationship.
The situation is different in B 2 C.
A consumer can never be denied his rights according to the law of consummation in France and provision 5 of the Convention of Rome.
Any disclaimer can deny the rights of consumers.
A consumer is defined as an individual who is not a professional in the area of his or her purchase (even if the product or service will be used for business).
The European Directive of 20th May 1997 concerns consumer protection by mail under sales, concerning electronic business.
Until now, there have been no decision in France about a disclaimer on the web.
However if the disclaimer respects the protection of the consumer and if the consumer was aware of the disclaimer before his consent or the contract, the disclaimer is effective.
It actually depends upon the content of the disclaimer.
If there is any violation of consumer law, the contract will be annulled by the Court.
4- IF PARTIES TO A TRANSACTION AGREE AT THE OUTSET THAT THE LAW OF A GIVEN STATE WILL APPLY TO ANY FUTURE DISPUTES OR THAT ANY FUTURE DISPUTE WILL BE LITIGATED IN THE COURT'S OF A CHOSEN EUROPEAN STATE, IS THAT AGREEMENT ENFORCEABLE?
DOES IT MATTER IF ONE OF THE PARTIES IS A CONSUMER ?
DOES IT MATTER THAT INTERNET TECHNOLOGY MAKES IT POSSIBLE TO INFORM THE CONSUMER IN WHATEVER DEGREE OF DETAILS APPROPRIATE TO THE SUBSTANCE OF THE LAW THUS CHOSEN AND TO PERMIT HIM OR HER TO COMPARE THAT LAW TO OTHER LAWS CHOSEN BY OTHER POTENTIAL CONTRACTING PARTNERS ?
The distinction between B 2 C and B 2 B is essentail.
The electronic transaction is valid and the fact of informing the other party at the outset (meaning before the acceptance) of the appliance of the law of a given state is valid according to French law.
However, consumer protection law forbids the choice of a law which can have the effect of depriving the consumer the benefits of his own law.
On the scale of laws, consumer law is one of the highest.
An agreement concerning a chosen law, even if the consumer agreed to it, can not have this effect.
The detail given is without any effect on this rule present in the Code of Consummation and Convention of Roma.
Solutions to the problem of achieving security and confidence have to be found elsewhere. In particular, techniques involving the labelling of Internet sites could create the necessary confidence, and could be in the best interest of both users and professionals.
5- IS IT POSSIBLE TO IDENTIFY A STATE IN WHICH THE TRANSACTION OCCUR ?
Internet did not create international sales. However, the medium is so different from others up to now that regulation has to be adapted.
In international conventions, the applied law to the contract is determined thanks to the law chosen by the party or in lack of a choice of a law, the law of the national country where the transaction occurs.
Until now, to determine where the transaction occurs, criteria such as the language of the transaction and the localization of the signature of the transactions were used by national jurisdiction to point out the country where the transaction occurs.
In sales, the most frequent criteria used by European jurisdictions is the criteria of ³la loi du débiteur de la prestation caractéristique² : meaning that the transaction is located in the country of the party which must execute the contract.
For example, in sales, execution of the contract is represented by delivery, so the transaction becomes located in the country of the seller.
These traditional criteria are difficult to apply to online activities.
Any physical criteria is relevant :
- the language
The website can offer products or services in all languages, it only supposes to translate the general terms of the offers
- the delivery
Certain services can be transfer online such as pictures (the paper version is no longer sent to the physical address but is posted to a server).
- the location of the signature
-With the advent of the digital signature, there is no longer geographic location .
In conclusion, the location of the transaction is essential in determining the law the party is subject to, which attempts to define new criteria adapted to online activities.
The actual debate in France and generally in Europe centers around defining the target of the website.
The target can be defined as a specific offer to deal with a buyer of a pre-determined country.
For instance, a website in Japanese selling products geared to the Japanese market and known to the Japanese by ads in Japanese papers can be considered as targeted to Japan.
The transaction between the seller and the Japanese buyer would occur in Japan wherever the server of the seller is.
When there is a lack of a specific target, the transaction can be considering as occuring in the website territory. This is a way of establishing a distinction between active website and passive website.
6- ARE ANALOGIES TO PRIOR TECHNOLOGIES, SUCH AS PRINT MEDIA, TELEPHONE, TV, RADIO OR SATELLITE TRANSMISSIONS, POSSIBLE AND USEFUL ?
Lawyers are used to thinking of new issues in comparing existing solutions.
However, the internet seems to develop particular specifications, which have consequences in term of liability, never seen before.
For example, the web is a free, world-wide service.
Prior technologies are limited to the access to the technology.
Resources are either rare or expensive.
Comparatively, the internet is a revolution as essential as that of the the print media in the 1800's. However, because of virtual and digital materials, universal communication, the number of participants, and the technology itself,identification is increasingly difficult to determine.
On the web, anyone can become an active operator, offering a service free from control. Anyone can have access to the world-wide market and become a merchant.
In previous technologies, contracts were not made in the media.
On the net, supply meets demand and the contract is concluded online.
Traditional rules are easier to apply in previous technologies because of their national aspects.
In France, analogies with the Minitel are often made in terms of liability.
With Minitel, 3 individuals are participating: the merchant, the host and the telecommunications operator.
However, business is limited geographically.
7- IF A PLAINTIFF OBTAINS A JUDGEMENT IN ONE COUNTRY AGAINST A DEFENDANT WITH NO ASSETS IN THAT COUNTRY, WHERE AND HOW CAN THAT JUDGEMENT BE ENFORCED ?
According to what is described above, a plaintiff could obtain a national judgement in certain cases.
However, the most difficult point for the plaintiff according, to my experience, is to obtain an enforcement of the judgement outside the European Union .
In Europe, most countries (plus countries from AELE Convention) signed the Convention of Lugano which makes enforcement automatic for a sentence pronounced in a signatory country.
With outside countries, to obtain enforcement of the national judgement, a specific procedure entitled ³exequatur² has to be carried out.
This procedure is the following :
At first, the law inquires if the defendant had been able to defend him or herself : the court checks if the defendant received the summons and had been able to be represented before the trial.
The public prosecutor and his deputies of the country where the trial is set ask their colleagues of the country where the judgement has to be enforced to apply the judgement.
Their homologous colleague will examine the judgement and if there is a imbalance between the decision and the manner it would have been judged in their country, enforcement of the judgement will be impossible to obtain.
Also, this judgement will never be executed.
8- DOES THE INTERNET ALTER THE BASIS UPON WHICH COMMERCE SHOULD BE TAXED ?
I consider below 2 taxations THAT are concerned by the questions: the VAT and the Income (or incorporation) tax.
In France, VAT is regulated by a distinction between products and services. However, with electronic products, the line between products and services is becoming indistinct (the example of pictures sent electronically: is it still a traditional product?, considering online activity as a service, is it legitimate to tax it differently than the picture ordered in a physical shop ? ).
According to VAT regulations, the foreign seller needs a representative in France to sell in France. This rule is competent for sales over the internet.
Is it realistic to require the seller to have such a representative in every country he sells whatever the amount of the sale may be ?
8-2 Income (or incorporation) tax
With the Net, the risk of " tax-paradise " is drastic because of the ease of transferring funds.
The other risk is that countries could find it attractive to tax e-business by extending the accurate criteria of taxation.
Taxation depends on the address of the merchant.
What about the location of the server?
Until now, doctrine does not consider the mere location of a server in a country as making it subject to the taxation in that country. Other elements, such as physical presence, are necessary.
However, any rule establishes this principle.
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