Jurisdictional Issues and Importance for Business

Week 4

“(What are the jurisdictional issues? Why are they important?)”

In light of jurisdictional issues faced with the Megaupload case, I think it highlights the importance of assessing how jurisdiction affects the online operations of businesses. In the Megaupload case allegations of copyright emerged as the US moved to arrest Kim Dotcom in New Zealand.  The US claimed jurisdiction as Megaupload has storage leased in US data centres (Winterford, 2012). However, according to the case of Dow Jones & Co Inc v Gutnick (2002) 194 ALR 433, the ‘hurt’ is world-wide as the copyrighted materials may have impact anywhere. The US may be granted jurisdiction based on the large number of film studios and record company which reside in California and whose revenue was affected.

Jurisdictional issues are important to businesses operating online to determine where disputes may be resolved. I purchase goods online from the US and to mitigate the risk of jurisdictional issues, the company sets conditions which I have to approve before purchase. One example is Shopbop.com whose conditions, as highlighted in Figure 1, state that Washington laws will govern disputes (Shopbop.com, 2012) even though, according to the Dow Jones & Co Inc v Gutnick (2002) 194 ALR 433 case, the dispute may come under Australian laws as the ‘hurt’ will lie with me as the place where the page is downloaded.

Figure 1 - Shopbop.com Conditions of Use, Applicable Law

Reference List:

Shopbop.com (2012, March 20). Conditions of Use. Retrieved from: https://www.shopbop.com/ci/aboutShopBop/conditions.html

Winterford, B. (2012, January 23). Four key questions from the ‘Mega conspiracy’. ITnews for Australian Business. Retrieved from http://www.itnews.com.au/Tools/Print.aspx?CIID=287823