Consider the following events, all from the last five years: (1) An American newsmagazine, Barron's, posts an unflattering profile of an Australian billionaire named Joseph Gutnick on its web site-the publisher, Dow Jones, Inc., is sued in Australia and forced to settle; (2) Mexico's incumbent telephone company, Telmex, blocks Mexicans from reaching the web site of the Voice-over-IP firm Skype; (3) the United States begins a major crackdown on web gambling services, causing serious economic damage to several small Caribbean economies; (4) the Chinese government prevents its citizens from using various foreign Internet services, including foreign e-mail and certain foreign news sources, and requires foreign search engines and blog sites to filter unwelcome content; (5) France orders the American auction site Yahoo to take down its Nazi-glorifying paraphernalia.
These disputes are well-known to those who study the Internet's international controversies.1 But not everyone realizes that these controversies are also forms of trade disputes, and, as such, no one yet fully understands how the law of the World Trade Organization ("WTO") might affect them. The purpose of this paper is to investigate that question.
In 1994, when most of the trading nations in the world agreed to create the WTO, they also agreed to try to liberalize trade in services. At the time, no one fully realized (and not all notice now) that the decision to liberalize trade in services put the WTO in the midst of Internet regulation in an interesting and unexpected way.2 Much Internet content can be reached from anywhere, making nearly everyone on the Internet a potential importer or exporter of services (and sometimes goods). Hence, almost by accident, the WTO has put itself in an oversight position for most of the national laws and practices that regulate the Internet.
The hard question is when does Internet filtering violate world trade rules? Filtering often represents political censorship, and it is sometimes said that neither the General Agreement on Tariffs and Trade ("GATT")3 nor the General Agreement on Trade in Services ("GATS")4 was meant to make censorship illegal-for the nations of the world do routinely censor or block products at their borders generally without creating trade disputes.5 But it also cannot be right that any protection labeled censorship is exempt from the World Trade Law-the GATS itself suggests as much.6 Leaving censorship aside, it is also true that some Internet filtering, like the blocking of Internet-based telephony discussed within, seems to have little to do with political control and much more to do with the protection of domestic incumbents. Such measures seem destined for increased scrutiny over the coming decade.
Such cases raise two particularly difficult questions. The first is the one alluded to above: what are the legal limits of censorship under the WTO system? In the main, the question has been avoided by a mutual sense among major trading nations that censorship falls outside of the WTO's concerns. Yet the WTO's Appellate Body has already displayed a taste for taking treaty interpretation beyond a strict examination of what the major drafting powers might have intended; in truth the textual support for the blanket claim that censorship is exempt from WTO scrutiny is not very strong. Second, the technological questions raise an important interpretative question for the WTO. It's a problem of interpretative "technological translation"-the application of legal texts to technologies not envisioned at the time of drafting. For example, do the terms "online information retrieval, or "data processing services," drafted in the early 1990s, include search engines like Google or Yahoo? If so, some countries may have opened broader access to their markets by foreign web sites than anyone has realized.
This Article is meant for two audiences. For those within the trade law world, the Article should make it clear that Internet services have leapt beyond what was contemplated in GATS or the subsequent Agreement on Basic Telecommunications Services. …