It wasn’t a great week for Google. First on June 27 the EU antitrust regulators fined Google a whopping 2.42 billion Euros ($2.7 billion USD) for engaging in anti-competitive and unfair behaviour by favouring its own shopping sites over third parties through its search platform, and gave it 90 days to alter its practices or face further penalties. Then a day later the Supreme Court of Canada (SCC) upheld a provincial Court of Appeal decision requiring Google to de-index the website of a company (Datalink Gateways) that had been accused of infringing the intellectual property and trade secrets of a competing company (Equustek Solutions), based in British Columbia. That in itself would not be unusual. What was ground-breaking was that the SCC upheld the BC Appeal Court’s decision to require that the de-indexing have world-wide application, on all of Google’s search engines, not just within Canada on Google.ca.
I won’t re-summarize the essence of the case; that can be found in a blog I did in December of last year when the SCC heard Google’s appeal, and in an earlier blog by David Newhoff back in June, 2015 at the time of the BC Court of Appeal decision. The Equustek case drew a large number of intervenors, from groups such as Human Rights Watch, the EFF, Canadian Civil Liberties Association, and the Reporters Committee on Freedom of the Press. The essence of their position was that not only were the Canadian courts exercising extraterritorial jurisdiction but that extending the reach of Canadian law to Google outside Canada would undermine freedom of expression on the internet.
Undermining Freedom of Expression on the Internet?
The argument goes that if Canada can order Google to de-index a website of a company in its global search (notwithstanding the fact that the company is clearly infringing intellectual property laws and continues to operate on the internet in defiance of a clear court injunction), then what is to stop tyrants abroad from curtailing free speech on a global internet? Iranian courts might order Google to delist LGBTQ websites; the Turks might order removal of all references to the Armenian genocide, the Chinese might order search engines to de-index Taiwanese websites etc., or at least so the argument goes. The SCC rejected these arguments. Mme. Justice Abella, writing for the 7-2 majority, stated that,
“…while it is always important to pay respectful attention to freedom of expression concerns, particularly when dealing with the core values of another country, I do not see freedom of expression issues being engaged in any way that tips the balance of convenience towards Google in this case”.
She went on to quote the rationale put forth by the BC Court in the earlier provincial appeal decision where the Court concluded that,
“In the case before us, there is no realistic assertion that the judge’s order will offend the sensibilities of any other nation. It has not been suggested that the order prohibiting the defendants from advertising wares that violate the intellectual property rights of the plaintiffs offends the core values of any nation.”
“This is not an order to remove speech that, on its face, engages freedom of expression values, it is an order to de-index websites that are in violation of several court orders. We have not, to date, accepted that freedom of expression requires the facilitation of the unlawful sale of goods.” (emphasis added)
The Court also noted that Google was free to seek relief if it found itself in a situation where the de-indexing violated the laws of another jurisdiction;
“If Google has evidence that complying with such an injunction would require it to violate the laws of another jurisdiction, including interfering with freedom of expression, it is always free to apply to the British Columbia courts to vary the interlocutory order accordingly. To date, Google has made no such application.”
While the EFF, echoed by its Canadian proxy OpenMedia, went into hyperventilation mode with the headline, “Top Canadian Court permits Worldwide Internet Censorship”, respected organizations like the Canadian Civil Liberties Association (CCLA) welcomed the decision as having achieved the dual objectives of recognizing the importance of freedom of expression and limiting any order that might violate that fundamental right. As the CCLA put it,
“While today’s decision upholds the worldwide order against Google, it nevertheless reflects many of the freedom of expression concerns CCLA had voiced in our interventions in this case.”
Importance of the Decision
On the other side of the coin, a number other intervenors who had supported Equustek’s position applauded the Supreme Court’s finding. The music industry was not directly implicated in the case but had intervened in support of the notion that Google has a responsibility to ensure it is not directing users to illegal sites. Music Canada’s announcement stated that;
“Today’s decision confirms that online service providers cannot turn a blind eye to illegal activity that they facilitate; on the contrary, they have an affirmative duty to take steps to prevent the Internet from becoming a black market…Today’s decision provides a vital remedy to address illegal online activities and enforce the rights of creators.”
The media in Canada were quick to jump on the case, proclaiming it to be a “David-and-Goliath” legal battle. While it has dimensions of the little guy versus the monolith, the importance of the case is that it establishes that entities like Google cannot float in “the cloud” above national law just because they operate in multiple jurisdictions. It also helps establish the principle that even though Google was not responsible for the illegal behaviour of Datalink, that company’s business would be commercially impossible without Google’s facilitation and thus Google, as facilitator, has a responsibility to take action when illegal behaviour is brought to its attention.
Factors in the Decision
The case was decided not just on the basis of whether or not it impeded free expression. There were other considerations, including whether Google, a non-party to the original case between Equustek and Datalink, could be subject to an injunction directed at the defendant. The Court ruled that it could. Google also argued against the decision on the basis that the Canadian court did not have jurisdiction and was applying Canadian law extraterritorially. This argument was rejected on several grounds by Justice Abella, writing for the majority. For a fuller discussion of the details and legal implications of the case, see Barry Sookman’s commentary.
Part of Google’s problem stems from its remarkable success in totally dominating search and other aspects of the online market to the point where not only does it have market power but has become a virtual monopoly. That market dominance (over 80% of the search market in Europe) is a key reason for the finding of the EU antitrust authorities against Google’s practices. Similarly, in the Equustek case while Google argued that it was not the only provider of search services on the internet, and that consumers could find Datalink online through other means, the Court rejected this argument because of Google’s predominance in internet search.
A Victory for Common Sense
The SCC decision on Equustek reaffirms that Google and other internet intermediaries that operate in multiple jurisdictions are subject to the rule of law where their operations impact local commercial or personal rights. Some, such as Canadian IP blogger Michael Geist, have claimed that the decision will vest more power in internet intermediaries such as Google, giving them the power to decide which laws to follow and which to ignore. This is an alarmist interpretation that does not make sense. I will explore this more in a future blog.
The Supreme Court of Canada decision, by requiring internet intermediaries such as Google to exercise their roles legally and responsibly—while at the same time recognizing the importance of freedom of expression on the internet—is a victory for the rule of law and, more than that, a victory for common sense.
© Hugh Stephens 2017. All Rights Reserved.