A free speech case that has plagued Yahoo! for several years has reached another milestone. A U.S. Court of Appeals overturned a previous ruling favorable to Yahoo! and evading the core issue of liability. The argument revolves around Yahoo! Auctions in France, where the company was sued for allowing Nazi paraphernailia to be placed on sale. Yahoo! removed the items and changed its policies in France, but continued litigating the case on principle. Yahoo! is potentially liable for a punitive settlement of $15-million dollars. In 2002 Yahoo! received protection from a U.S. court, saying it did not need to pay the fine. Today's turn-around startlingly evades the liability issue and declares the case moot because France is "unlikely" to levy the fine.

Thgis case, academic though it might seem, touches on two important and current issues. First, compliance with the laws of foreign governments, and second, the safe harbor of online service providers that are misused by customers. Nothing was resolved on either count in this latest ruling.