Yahoo! Faces French Fines

July 24 -- The long arm of the French law held off on reaching into Californian pockets today, as a Parisian judge called for more hearings before deciding whether to levy huge fines on the Internet giant Yahoo!

A French anti-racism group filed a lawsuit against the Web portal in April for allowing auctions of Nazi memorabilia on its American site, Yahoo.com — auctions that are legal in the United States. Yahoo!’s French site, Yahoo.fr, does not have such auctions.

But French Net surfers can access the U.S. site, so in May judge Jean-Jacques Gomez gave the company until today to explain how it will block French surfers from access to the auctions.

“The moment a French person can read it there is a problem,” said Marc Knobel of the International League Against Racism and Anti-Semitism (LICRA), one of the plaintiff organizations.

If Yahoo! fails to prevail, the company faces up to 200,000 euros ($187,421) in fines per day.

In court today, experts called by Yahoo! said that it would be impossible for the company to adequately block the site. The judge called for experts from the other side to present their case on August 11.

If the purpose of a fine is to make Yahoo! block the auctions from French users, they’ll have to first determine whether that’s technically possible — else the punishment is useless, said lawyer Fred Marcusa of Kaye, Scholer, Fierman, Hays and Handler in New York.

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More Suits to Come

Yahoo!, of Santa Clara, Calif., and its French subsidiary were sued by LICRA and the French Union of Jewish Students for violating the French anti-Nazi laws.

This morning, Yahoo! Auctions was selling 1,192 Nazi-related items, including a Nazi battle flag for $12.95 and a “rare Nazi medal” being offered by a user named “we_sell_beanies.” None of the Nazi items were being offered in francs or euros, only U.S. dollars.

This could be only the first in a slew of lawsuits against U.S. companies making materials available on the Net that are legal in the U.S. but illegal in Europe, Knobel said.