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INTERNET ANONYMITY NOT GUARANTEED

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TORONTO -- Businesses that contend they have been defamed by anonymous online postings can force Internet service providers to identify the authors of those messages, clearing the way for possible legal action, a Canadian court has ruled.

The ruling also may force Internet businesses to emphasize that user privacy can't be guaranteed, or else they risk weakening their general immunity from liability for online content, experts say.

The case involves postings to an electronic bulletin board operated by Yahoo Inc. concerning Hamilton, Ontario-based Philip Services Corp. The waste recycling company contends the messages were derogatory.

Philip Services went to court to obtain the names of the Internet users who posted the messages under pseudonyms, and recently the General Division of the Ontario Court in Toronto ruled that 12 Internet service providers must identify the messages' authors. The waste company has not yet sued any of those who posted the messages.

Among the ISPs affected by the court orders were America Online Inc., CompuServe, PsiNet Inc., and Canadian-based Internet service provider Weslink Data Corp.

"The whole issue has been kind of brewing for a while when people realized it was easy to achieve some degree of anonymity on the Net," said Paul F. Lewis, a partner with the Moye, Giles, O'Keefe, Vermeire & Garrell L.L.P. law firm in Denver.

The lawyer noted that, while law enforcement authorities have been able to use search warrants to obtain Internet user information in criminal cases, "this is relatively new in the civil context."

"The real issue that companies are going to deal with, particularly Internet service providers, is to make sure that their users are aware that the company may get subpoenaed for the user information and the ISP is not in a position to guarantee the privacy of the user information," Mr. Lewis said.

Though the recent ruling was handed down in Canada, Nicole Wong of the Menlo Park, Calif.-based law firm Hosie, Wes, Sacks & Brelsford, which represents Yahoo and other Internet businesses, thinks the global nature of the Internet makes the ruling relevant everywhere.

"What we do about user privacy is one of the biggest issues on the Internet right now," Ms. Wong said.

"In the United States, federal law protects content of information and user information that are stored by an Internet service provider," she said. That information can be obtained with a court order, however, and "the way to trace (users) is through an ISP," Ms. Wong said.

But while the court is forcing ISPs to identify the users responsible for the remarks that Philip Services says are defamatory, the Internet service providers themselves generally enjoy immunity for any defamation claims stemming from such messages.

"As regards defamation, the law is developing that there is kind of an immunity for the Internet service providers, which kind of just act as a conduit for defamatory information," noted Chad Milton, a senior vp at liability insurance underwriter Media/Professional Insurance in Kansas City, Mo.

"Online disseminators are being treated like magazine stands rather than publishers and not being held liable for the content," Mr. Milton said. In that context it follows that the ISPs have not been given protection from disclosing user names, he suggested.

"In this case, the Internet service providers sort of take themselves out of the publishing chain," Mr. Milton said. "If they want to be treated like third parties and not be liable for the content, then they probably ought to be required to disclose information."

In addition, he noted, the ISPs' situation differs from a confidential reporter-source relationship, in which the reporter guarantees the source's confidentiality in order to get information for a story.

"That doesn't happen with an anonymous (Internet) poster," Mr. Milton said. "So, for that reason, too, it seems less compelling to protect the Internet service provider. So I guess I'm not shocked by this."

In the United States, that immunity from liability arising from statements made by third parties is provided to Internet service providers under the Communications Decency Act and is essential if they are to function as intended, Ms. Wong contends.

"The Internet is about freedom of information, and the Internet service providers make that possible," she said. "And they cannot, as a practical matter, double-check, as a newspaper does, every statement that is made through their service.'