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An employee walks in a hallway at Google Canada's engineering headquarters in Waterloo, Ont.Cole Burston/Bloomberg

A U.S. ruling that contradicts a Supreme Court of Canada order against Google is being hailed as a victory for free speech online, but leaves the search engine on tricky legal ground in the real world.

In June, the Supreme Court of Canada (SCC) ruled in favour of British Columbia-based company Equustek Inc. and demanded that Google's parent, Alphabet Inc., remove links that pointed to the website for Datalink Technologies Gateways not just inside Canada, but anywhere in the world those links were visible.

On Thursday, Justice Edward Davila, a U.S. District Court judge in northern California, granted the Mountain View, Calif.-based company a temporary injunction against the order inside the United States because, among other things, "the Canadian order … threatens free speech on the global internet."

Far from being over, the disagreement between the two countries puts Google in a delicate position and highlights the messy cross-border rules internet giants face as they operate globally: It now has to decide whether it should go back to the Canadian court and ask for relief from its injunction, or simply continue to block the Datalinks website (which it has been doing since before the Canadian court ruling).

"To be clear, the California order did not overrule the Supreme Court of Canada. The two courts have distinct authority. The Supreme Court of Canada speaks for Canadian law; the California court speaks for U.S. law," says Filippo Raso, executive editor of the Harvard Journal of Law and Technology Digest.

"As far as the Canadian legal system is concerned, Google must still comply with the Supreme Court of Canada's order and de-index Datalink's websites globally. If Google fails to do so, then it is violating the Supreme Court of Canada's order and can be punished appropriately. Punishments might include monetary fines against Google."

A Google spokesperson said the company had no comment on what its next steps would be, but did share a statement from the company's senior product counsel, David Price: "We're pleased with the court's decision to uphold the legal principle that one country shouldn't be able to decide what information people in other countries can access online."

What began as a trade-secret dispute morphed into an argument over what kind of content Google is allowed to display on its search engine.

Equustek initially went to court in 2011 seeking to shut down Datalink, a former distributor it accused of stealing trade secrets and selling products derived from those secrets online. It was granted an injunction from a B.C. court instructing Alphabet's Google search engine to de-list about 300 links to the allegedly stolen products.

Google agreed to block the links for, but did not extend that block internationally. In 2014, Equustek won a global injunction on the links, which the SCC eventually upheld, ruling: "The injunction in this case is necessary to prevent the irreparable harm that flows from Datalink carrying on business on the internet, a business which would be commercially impossible without Google's facilitation."

"Equustek can still ask courts in other nations to recognize the SCC order and compel Google to de-index from local Google domains, such as," Mr. Raso said. "Likewise, Google can ask courts in other countries to rule the SCC order unenforceable under national laws. All this is expensive and time-consuming. Normative questions aside, this dispute demonstrates the complexity in enforcing a global injunction such as this."

Robert Fleming, the lawyer who argued the case for Equustek, did not respond to a request for comment in time for publication.

Michael Geist, a University of Ottawa law professor and Canada Research Chair in Internet and E-commerce Law, says he thinks the Supreme Court's ruling represents a lost opportunity for internet rights advocates.

"The case could have provided guidance on the inevitable conflicts that can arise with competing rulings. Instead, it left open the possibility of conflicts and didn't provide much guidance on how to sort them out," he says. "My expectation is that we will see more of these legal conflicts in the future leaving companies like Google to sort out which judgments they follow and how to do so."

The case highlighted the different ways in which speech protections are adjudicated in Canada and the United States. In its ruling, the Supreme Court of Canada said "This is not an order to remove speech that, on its face, engages freedom of expression values … we have not, to date, accepted that freedom of expression requires the facilitation of the unlawful sale of goods."

Justice Davila, on the other hand, relied on Section 230 of the 1996 U.S. Communication Decency Act, saying "The Canadian order treats Google as a publisher because the order would impose liability for failing to remove third-party content from its search results." Section 230 "immunizes providers of interactive computer services against liability arising from content created by third parties," and Justice Davila ruled that Google met the conditions required for immunity.

Alphabet is also awaiting a ruling from the Court of Justice of the European Union on a different global censorship order; in that case, France's data-protection authority (Commission nationale de l'informatique et des libertés ) is seeking to remove Google results everywhere based on the EU's so-called "right to be forgotten."

Mr. Geist says that, despite the conflict in enforceability thanks to the U.S. ruling, Canada's Equustek precedent is law now. "The outcome that some were hoping for was the prospect of using Canada as a beachhead for global takedowns orders," he says. For Google, Facebook and other large global internet companies, a future global order from Canadian courts "remains a real risk."

With files from Sean Fine

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