Yahoo Ethics Case Study

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BUS 303 Case #2
Introduction
Yahoo Inc. (Yahoo) is one of the most well-known global Internet search engines, which has developed 24 international sites in 13 languages. In 2001, Yahoo was sued by French Nazi concentration camp survivors for allegedly justifying the Holocaust through its website. Yahoo’s lawyers demonstrated that the French court lacked jurisdiction over a US-based company and the content on Yahoo’s website was by the protection of free speech. Yahoo began excluding Nazi items that were displaying or selling on its auction sites while refused to screen users by nationality. This rejection incurred wide-spreading discontent and brought the discussion on the extraterritoriality.

Stakeholders
Timothy Koogle, chief executive officer of Yahoo Inc., was the one to decide whether to accept the injunction from the French Court which required blocking French users’ access to hatred content on Yahoo’s US-based servers. In 2001, Koogle was charged with war crimes for allegedly justifying the Holocaust through Yahoo’s website and he faced incarceration in France. La Ligue Contre le Racisme et L’Antisemitisme (LICRA) sued the Yahoo Inc. for its violation of French law. In LICRA’s view, the availability of Nazi contents on Yahoo’s English-language site also constituted a crime even Yahoo prohibited these racial hatred materials on their French-language portal. The French court ordered Yahoo to dissuade and make impossible for any Nazi merchandise sales through Yahoo’s auction site. Meanwhile, it also required Yahoo to block French users from accessing any questionable content. The U.S. court demonstrated that the French order violated constitutionally protected free speech in the United States. The district Judge Jeremy Fogel declared that the U.S. court, as a more efficient and effective forum, had jurisdictional authority over the French defendants. The purveyors of hate used the Internet to disseminate their views since it was cost-saving and extensive. Shielding hate groups’ websites would be an obstruction to the Nazi propaganda as it decreased visitors to these hates sites. Survivors of concentration camps could own justice if Yahoo blocked these hate sites and admitted the crimes of the Holocaust. Young people would benefit from Yahoo’s blocking of hates sites since many neo-Nazi sites distributed games and rock CDs to capture the minds of the youth. Shielding prohibited sites also make anti-hate organizations work easier.

Changes
In 1995, Yahoo Inc. was created in the United States. One year later, Yahoo France, a 70 percent-owned subsidiary of Yahoo Inc., was established and became the most popular portal in France. Yahoo built independent local-language directories websites and content for each of their international market. By 2001, Yahoo has experienced great success in global expansion with approximately 40 percent of users located outside the United States. In 2000, the dot-com stock market crash caused many companies to reduce costs by cutting advertising budgets. As a result, Yahoo’s advertisement revenues decreased by 42 percent and the company shares fell 92 percent. Many leading executives, including Timothy Koogle, declared that they would be replaced. Also in 2000, LICRA sued Yahoo for the violation of French law since Yahoo allowed users to post Nazi-era memorabilia for sale on its auction site. The French court ordered Yahoo to block French users from accessing the banned content. But Yahoo denied this jurisdiction and justified itself as a protector of free speech. At the end of 2000, an Australian citizen of German origin, Toben, was sentenced to 10 months in prison by the German court because he operated an Australian website to promote Nazism and directly targeted on Germans. Later in 2001, German prosecutors charged Yahoo Germany for hosting Mein Kampf on its GeoCities Web hosting service. International conventions kept seeking greater cooperation on the extraterritoriality. The...
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