Private International Law and the Internet

With the advent of the Internet, cross-border relationships have intensified, raising more complex questions of jurisdiction and applicable law. Although, as mentioned in the preceding paragraph, the international community has been confronted with fundamentally the same questions ever since the earliest manifestations of international trade, a number of special characteristics of Internet-based transactions have added novel dimensions to the debate. Among the most noteworthy of such characteristics the following can be mentioned.

Instantaneous Global Presence

Prior to the Internet, presence in foreign markets generally was achieved on a piecemeal basis. First, penetration in the home market was assured, after which gradual expansion to foreign markets was contemplated, and such foreign markets were approached individually, or, at best, on a regional basis. Very often, the distribution of products in foreign markets was accompanied by some form of physical presence there, either by the producer itself or its local representative.

The Internet has altered the dynamics of this process radically. Once a website is created and published, it is immediately accessible from everywhere in the world. At the very least, persons throughout the globe can visit the site, but often they will also be able to order and download products from it. This global presence raises a number of pressing questions from a private international law perspective: If a website or other online presence establishes a connection with every country in the world, which courts should have jurisdiction over disputes resulting from such presence and which laws should be relied upon to resolve them? This feature of the Internet and the questions which it entails have been an important driving force behind the renewed interest, at the multilateral level, in private international law. As far as jurisdiction is concerned, this interest has found expression in the negotiations on the draft Hague Convention on Jurisdiction and Foreign Judgments in Civil and Commercial Matters, and the project of the American Law Institute (ALI) on the development of a set of Principles on Jurisdiction and Recognition of Judgments in Intellectual Property Matters.

Consumer Protection Issues

Prior to the development of the Internet as a medium for commercial exchanges, consumers rarely entered into a direct relationship with foreign vendors. Typically, foreign products were distributed through local importers from whom consumers residing in the territory would make purchases. As a result of the global presence that the Internet enables, this model in many instances will not longer apply. Consumers can place orders on, or performs downloads from, the sites of foreign vendors, thus entering into a direct contractual relationship with them.

This shift in business model has important legal reverberations from the consumer protection point of view. To the extent both parties to the transaction are located in the same jurisdiction (i.e., the consumer and the local importer), there are no particular difficulties with respect to the questions of which courts have jurisdiction and which laws should apply to consumer disputes. However, if those parties are not located in the same country, the question arises whether the courts of the country of the consumer ("country of destination") or those of the vendor ("country of origin") should have jurisdiction. Similarly, the issue of which applicable law governs the consumer aspects of the transaction becomes more acute. Those who favor a country of origin approach argue that it would be impossible, or, at the least, unreasonably burdensome, to expect vendors to comply with the consumer protection laws of all the countries from which their websites can be reached. Those in favor of a country of destination approach maintain that consumers will have neither the resources nor the incentive to pursue vendors in foreign courts. As consumer protection is regarded a matter of public policy in many countries, these questions have proven particularly vexing to solve, even at the regional or national level.

Relevance of Intellectual Property

There is a close relationship between intellectual property and the Internet, both in terms of the technical infrastructure of the network and the products that are traded on it. The content that is distributed through the Internet, either lawfully or unlawfully, includes software, text, music and films, products that are at the heart of the copyright system. Furthermore, much of the information technology which underlies the Internet potentially could benefit from intellectual property protection, although in many instances a deliberate choice was made not to seek such protection ("open standards"). The aspects of the Internet infrastructure which could appropriately be subjected to exclusive proprietary rights also is the subject of constant debate and attention. In light of these deep ties between intellectual property and the Internet, the question has arisen whether any private international law regime for the Internet could be deemed complete, if it does not also address intellectual property issues.