Personal Jurisdiction, Internet Commerce, and Privacy: The Pervasive Legal Consequences of Modern Geolocation Technologies
64 Pages Posted: 9 Jun 2010 Last revised: 4 Mar 2014
Date Written: June 8, 2010
Modern geolocation technologies allow Internet sites to automatically and accurately identify a user’s geographic location. This capability - unavailable just a few years ago - has begun to revolutionize Internet commerce and communication by enabling content localization, customization, and access regulation on a scale previously thought to be impossible. Yet thus far, the law has reacted inadequately to these technologies, or in some cases, failed to react at all.
While these failings are widespread, they are most glaring in three particular areas: personal jurisdiction, Internet commerce regulation, and privacy law. Personal jurisdiction doctrine has largely ignored the substantial role geolocation technologies play in the interaction between parties and a forum state. The dominant test for determining whether a web site is subject to personal jurisdiction, set forth in Zippo Manufacturing Co. v. Zippo Dot Com, Inc., was conceived well before geolocation technologies were commercially available and has not been updated since. Applied rigidly, the Zippo test permits personal jurisdiction over an “active” website even when the site uses geolocation tools to block access to in-state users. More importantly, this test denies jurisdiction in many cases where a “passive” website could reasonably have used such tools to regulate access but failed to do so.
Next, scores of cases have concluded that accurate geolocation is impossible, and have based legal conclusions on this now-erroneous premise. These cases have relied on two main lines of reasoning. First, in the absence of effective geographic screening mechanisms, state laws governing online content and commerce cannot avoid significant extraterritorial application, and thus violate the dormant Commerce Clause. Second, without an ability to filter users by jurisdiction, all sites would be subject to the rules imposed by the most stringent state regulator - resulting in an unacceptable burden protected speech. Modern geolocation tools completely undermine both of these arguments by making it possible to tailor content type and availability by jurisdiction. As a result, state governments are now substantially freer to impose Internet commerce regulations.
Finally, there is the question of geolocation tools’ impact on privacy. Current law fails to address this matter explicitly, though the Federal Trade Commission’s recently released guidelines for contextual and behavioral advertising do so indirectly. As a result, there is significant confusion regarding sites’ privacy obligations with respect to geolocation data. Currently, most geolocation tools pose little privacy risk, as users are identified only at a regional level. As these tools begin to provide more granular and individualized location data, the need for privacy regulation will increase substantially, however.
In light of the now common market use of geolocation tools, courts, legislatures, and agencies must adapt each of these bodies of law to reflect the new technological reality. This paper provides an in-depth analysis of each of the problems described above, as well as ways those problems can be resolved.
Keywords: Geolocation, civil procedure, personal jurisdiction, Internet commerce, dormant commerce clause, state regulation, privacy, behavioral advertising, FTC, IPv6
JEL Classification: K10, K13, K20, K23, K40, K41
Suggested Citation: Suggested Citation