Net firms click off new libel bill

By CHRIS BARTON

Internet service providers (ISPs) are starting to question the practicality of new defamation provisions in the Government's proposed Electronic Transactions Bill.

The Ministry of Economic Development has released a discussion document on the bill which it hopes to pass into law by the end of this year. It is seeking submissions from interested parties by July 14.

Most of the bill is designed to update New Zealand law to allow electronic forms of writing and signatures in contracts and other documents which were previously required in paper-based form.

But it also proposes to clarify the circumstances when an ISP can be liable "for the acts or omissions of its subscribers." If an ISP has knowledge of defamatory information on web sites it hosts or in discussion groups it carries, then it is obliged to remove that material, or face possible prosecution. To clarify things further the Government intends to alter the Defamation Act 1992 to make clear that an ISP is a "distributor" of information and can invoke the defence of "innocent dissemination." The legislation is designed to clear up uncertainty about whether ISPs would liable under existing law.

Asia Online New Zealand general manager Hugh McKellar said while he was comfortable in principle with the concept of "notify and take it down" - because that was what his company did on a voluntary basis - he was concerned how he would now be required to make those decisions.

"There's a fine line between free speech and defamation. Suddenly we become judge and jury and have to adopt the role of a censor."

Mr McKellar said his company already had certain rights to take offensive material off web sites as set out in the "acceptable use" conditions of its hosting contracts - which was fine for material that was "blindingly obvious" such as child pornography. But he was worried that the new legislation might promote a vigilante mentality - with people monitoring ISPs and regularly advising them of material that might be defamatory.

The concern was echoed by ihug director Tim Wood - particularly in relation to newsgroups and chatrooms which he believed would have to be excluded.

"There are so many different groups with postings dynamically changing all the time and then echoed around the world, it would be impossible to manage"

For web site content, Mr Wood said ihug also had conditions in its hosting contracts allowing it to remove inappropriate material. But he was concerned about the extra cost burden the new law would put on to ISPs.

"I don't think ISPs should be forced into making moral judgements. It comes down to resources - there could be quite a cost involved in taking legal advice and constantly having to remove material."

The proposed law sets up the possibility of a neverending cycle of ISPs receiving notification about defamatory material which they then remove from their web sites or news servers - only to find it is immediately reposted. Under the present provisions, ISPs would be obliged to remove the new posting only when they are again notified that it was back on their site.

Intellectual property lawyer and chair of the Internet Society of New Zealand (Isocnz) councillor Peter Dengate Thrush said one effect of the proposed law would be the tightening up of ISP's hosting contracts. He said in some cases the removal of material from web sites might adversely affect the authors and deprive them of revenue. In such a case the ISP might find itself being sued for breach of contract.

Mr Dengate Thrush said Isocnz was taking a keen interest in the bill and had referred the discussion document to a subcommittee to examine its impact.

Commenting as an intellectual property lawyer, he was concerned the defamation provisions gave "a huge advantage" to the plaintiff and left authors having to prove they had a right to publish.

Commissioner Paul Heath of the Law Commission said the exact wording of how ISPs would be informed about defamatory material was still to be worked out.

He said the proposal was designed to protect ISPs from the impossible task of having to constantly monitor material on their web sites.