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Google thinks globally but a B.C. court orders it to act locally

August 24, 2015

google-under-gavel

Lawyers for Google were in a Vancouver courtroom two months ago, on June 11, 2015, to hear a B.C. Court of Appeal uphold a sweeping 2014 B.C. Supreme Court ruling that ordered Google to block all search results relating to the illegal commercial activities of a former B.C. tech company.

While Google had voluntarily agreed to block results from certain page URLs on the Google Canada web domain (.ca), the 2014 court order called for search results to be blocked on a long list of websites across all of Google’s search domains (including .com).

Google’s lawyers sought to overturn the 2014 court order on jurisdictional grounds, arguing that the B.C. Supreme Court had exceeded its territorial reach and anyway, British Columbia law didn’t apply to Google because it was a U.S. company with no physical presence in the province.

But the three Justices of the B.C. Court of Appeal unanimously agreed with the B.C. Supreme court and upheld the 2014 global site-blocking order against Google.

What influence it may have in other jurisdictions is questionable but there’s no doubt that the British Columbia ruling strikes directly at one of Google’s greatest fears — that it’s global cloud-based advertising business could be brought down, like the giant Gulliver was by the Lilliputians, and tied up in innumerable local legal squabbles.

Google gets caught in the middle

The dream and the nightmare of Google.

Google’s dream and its nightmare.

It began with a 2011 lawsuit brought in British Columbia Supreme Court by one B.C. tech company against another..

Network hardware maker Equustek Solutions Inc. was trying to legally force its former distributor, Morgan Jack Datalink Gateways (Inc. and LLC) to stop selling hardware based on designs stolen from Equustek.

Morgan Jack had first re-branded Equustek hardware to sell as its own and then simply copied the designs in order to manufacture and continue selling them.

In 2012, after Morgan Jack fled B.C. and adopted a “clandestine” business model of selling its ill-gotten hardware through a number of different websites, Equustek sought a court injunction to force Google to block search results from those sites, telling the court:

“Google is the dominant player in the search engine market, and no business conducted on the Internet can succeed unless [it] can be easily found by a search on Google”.

Google responded in the narrowest possible way by voluntarily removing some 345 page URLs from search results on google.ca.

The B.C. Court of Appeal ruling touched briefly on Google’s reticence to block search results beyond specific webpages:

“Google employs approximately 40 people to remove web pages it considers offensive from its indexing and result displays. As matter of policy, however, it does not voluntarily block entire domains, subdomains, or websites from its services — instead — it excludes only specific webpages”.

Like a game of Whack-A-Mole

In early 2013, Equustek was back in court, saying that Google’s narrow solution was unacceptable. For one thing, Morgan Jack only had to shuffle objectionable content around on its websites to defeat Google’s deindexing of page URLs — it was like a game of “Whack-A-Mole” declared Equustek. And for another, most of Morgan Jack’s sales were outside of Canada, so restricting the arrangement to Google Canada was of limited value.

This resulted in a June, 13, 2014 court order that Google Inc. cease indexing or referencing a whole list of website domains across all its search engine portals.

Google complied with the order and Equustek told the court that the new across-the-board domain ban successfully reduced both the number of Morgan Jack websites turning up in search results and also their ranking.

Google then won the right to appeal the order but lost its bid for a partial stay.

Equustek Solutions Inc. v. Google Inc.

In appealing the ruling Google’s lawyers essentially argued that a B.C. court had no business telling it what to do.

For one thing, the B.C. court order exceeded the limits of its territorial jurisdiction and for another, Google was an innocent third party being improperly dragged into a dispute between two B.C. companies that it had no dealings with (not entirely true) and there was also the fact that Google was a U.S.-based company with no physical presence in the province and thus well beyond the reach of British Columbia law.

And, for good measure, Google said that it was concerned with the negative effect such an injunction would have on freedom of speech.

In the course of hearing arguments from both the plaintiff (Equustek Solutions Inc.) and the appellant (Google Inc.), the B.C. Court of Appeal also considered submissions on free speech and intellectual property theft (as both related to the Internet and law) from four intervenors: the Canadian Civil Liberties Association, the Electric Frontier Foundation, the International Federation of Film Producers Associations and the International Federation of the Phonographic Industry.

In its June, 2015, ruling upholding the 2014 B.C. Supreme Court decision, The B.C. Court of Appeal explained that while it was true that the California-based (but Delaware-incorporated) company had no traditional bricks and mortar presence in B.C., Google certainly did business in the province, both in the selling and displaying of online advertising.

“Google does not have resident employees, business offices, or servers in the Province, but its activities in gathering data through web crawling software, in delivering targeted advertising to users in British Columbia, and in selling advertising to British Columbia businesses are sufficient to uphold the chambers judge’s finding that it does business in the Province. The court therefore, had in personam jurisdiction over Google”.

The Honourable Mr. Justice Groberman stated that he was of the view that the original order was within the jurisdiction of the Supreme Court of British Columbia; did not violate any principles applicable to the granting of injunctions and also didn’t violate norms of freedom of speech. And therefore he dismissed Google’s appeal, with the agreement of his two associates, the Honourable Mr. Justice Frankel and the Honourable Mr. Justice Harris.

The Google mystique wears thin in court

Significantly, The B.C. Court of Appeal didn’t buy into Google’s submission that it merely offered a passive website to residents of British Columbia, or that its programs automatically generated search results without Google being actively involved.

Justice Groberman concluded that Google’s search engine was far from passive, as evidenced by the way that it jumped in as a user began typing, in order to suggest possible search queries based on the user’s own search history.

And the Justice found it to be a significant example of involvement in B.C. (not to mention the case before the court) that not only did Google sell online advertising directly to British Columbian companies in general but it had specifically sold advertising to the deadbeat defendant, Morgan Jack, no less!

Justice Groberman also noted that the special selling point of Google’s online advertising was the way that it was delivered in context, with both search results (i.e, a search for B.C. lawyers will be accompanied by ads for B.C. lawyers) as well as the user’s search history. Therefore the Justice explained, he had to respectfully disagree with Google’s assertion that its advertising services were completely separate from its search services.

Google only has itself to blame

In the original 2011-2014 case, Google had insisted that an Internet search initiated in British Columbia did not equate to Google carrying on business in the province and had rather bleatingly declared (quoting The B.C. Supreme Court’s Honourable Madam Justice L.A. Fenlon) “that on the plaintiffs’ [Equustek] reasoning there is not a country on earth whose civil courts could not assert jurisdiction over Google in respect to search results”.

In his 2014 ruling upholding the 2014 order, Justice Groberman repeated  Justice Fenlon’s direct response to Google’s claim that the justification used to assert the B.C. court’s jurisdiction would give every state in the world jurisdiction over Google’s search services.

That may be so, said Justice Fenlon.

“But if so, it flows as a natural consequence of Google doing business on a global scale, not from a flaw in the territorial competence analysis”.

And after reiterating his agreement with the Supreme Court’s earlier analysis that B.C. had legal jurisdiction over Google’s undeniable business presence in the province, Justice Groberman somewhat pooh-poohed Google’s fears of judicial interference:

“Google raises the specter of it being subjected to restrictive orders from courts in all parts of the world, each concerned with its own domestic law. I agree with the chambers judge that it is the world-wide nature of Google’s business and not any defect in the law that gives rise to that possibility. As well, however, the threat of mufti-jurisictional control over Google’s operations is, in my opinion, overstated.

In effect, the Justice was saying that Google doth protest too much.

National and international law was generally quite favourable to multinational corporations like Google and anyway, the the B.C. ruling was not the slightest bit onerous. Careful examination had shown that Google would suffer neither inconvenience nor incur any expense in complying with it. And the order was limited in duration, either to the time it took to be effective or until further order of the court.

But Google’s near-squealing reaction to such a mild court injunction is telling.

Google isn’t worried about one specific court order but it’s clearly terrified by the precedent that such an order might advance — namely, that being a cloud-based business doesn’t actually put Google above the law of the land and that it can be held accountable in all the jurisdictions where it makes its money. Click the images to enlarge them.

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