Appeared
on March 4, 2012 in the Toronto Star as Bodog.com case sends warning to
all Canadian websites
Imagine a scenario in which a country enacts a law that bans the sale
of asbestos and includes the power to seize the assets of any company
selling the product anywhere in the world. The country tests the law by
obtaining a court order to seize key assets of a Canadian company,
whose operations with hundreds of employees takes a major hit. The
Canadian government is outraged, promising to support the company in
its efforts to restore its operations.
Last week, this scenario became reality, though the product was not
asbestos and the Canadian government has yet to respond. The case
involves Bodog.com, a Canadian-owned online sports gaming site and the
country doing the seizing was the United States. Supporting online
gaming operations will undoubtedly make governments somewhat squeamish,
but the broader implications of last week’s seizure touch on millions
of websites and Internet companies who now find themselves subject to
U.S. jurisdiction.
Bodog.com and its owner, Canadian Calvin Ayre, was one of the world’s
largest sports gambling operations, employing hundreds of people in
Canada and Costa Rica. Last November, its free gaming site, Bodog.net,
signed a three-year sponsorship deal with the Canadian Football League.
The U.S. has been particularly aggressive about trying to shut down
online gambling operations (Las Vegas and Atlantic City are apparently
less of a problem), though typically those operations have some U.S.
connection. In the Bodog.com case, U.S. officials targeted a site with
limited connections to the country as the site had licensed out the
bodog.com domain name in 2006 and stopped accepting U.S. bettors late
last year.
The legal issues surrounding its operations will be played out in
court, but the manner in which the bodog.com name was seized could have
a lasting impact on Internet governance.
The domain name was registered in Canada with Vancouver-based
DomainClip. In past years, registering a domain name with a non-U.S.
registrar and avoiding U.S. servers was viewed as sufficient to fall
outside U.S. jurisdiction. This is because a court order requiring the
domain name registrar to transfer ownership of the domain (or redirect
the site) was only enforceable in the jurisdiction in which it was
issued.
No longer.
In the Bodog.com case, State of Maryland prosecutors were able to
obtain a warrant ordering Verisign, the company that manages the
dot-com domain name registry, to redirect the website to a warning page
advising that it has been seized by the U.S. Department of Homeland
Security.
The message from the case is clear: all dot-com, dot-net, and dot-org
domain names are subject to U.S. jurisdiction regardless of where they
operate or where they were registered. This grants the U.S. a form of
“super-jurisdiction” over Internet activities since most other
countries are limited to jurisdiction with a real and substantial
connection. For the U.S., the location of the domain name registry is
good enough.
The aggressive assertion of Internet jurisdiction was one of the key
concerns with the Stop Online Piracy Act (SOPA), the controversial bill
that died following a massive online protest in January. It simply
defined any domain name with a registrar or registry in the U.S. as
domestic for U.S. law purposes. The bodog.com case suggests that the
provision was not changing the law as much as restating it, since U.S.
prosecutors and courts follow much the same approach.
In an era when governments are becoming increasingly active in
regulating online activities, the Bodog.com case provides a warning
that by using popular dot-com domain names, companies and registrants
are effectively opting-in to U.S. law and courts as part of the package.
Michael Geist holds the Canada
Research Chair in Internet and E-commerce Law at the University of
Ottawa, Faculty of Law. He can reached at mgeist@uottawa.ca or online
at www.michaelgeist.ca.
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Last week I wrote about the astonishing
demands
of the Canadian music industry as it seeks a massive overhaul of Bill
C-11, the copyright reform bill. The Canadian Independent Music
Association is seeking changes to the enabler provision that would
create liability risk for social networking sites, search
engines, blogging platforms, video sites, and many other websites
featuring third party contributions. If that were not enough, it is
also calling for a new iPod tax, an extension in the term
of copyright, a removal of protections for user generated content,
parody, and satire, as well as an increase in statutory damage awards.
CIMA and ADISQ, which represents the Quebec music industry, appeared
before the C-11 committee last week and the demands only seemed to
increase. For example, ADISQ is asking the government to add a
requirement for Internet providers to disclose customer name and
address information to copyright owners without court oversight.
Conservative MP Paul
Calandra rightly noted the obvious parallels to Bill C-30, where the
government wants similar disclosures to law enforcement. In this case,
however, ADISQ wants the information disclosed to a private party based
on nothing more than an allegation of infringement. Calandra's comments
suggest that the government recognizes the dangers of such an approach.
The proposed lack of due process is not limited to the disclosure of
subscriber information. During its appearance, CIMA said it wanted a
takedown system without any due process.
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