Internet Companies: Beware Of Mandatory Israeli Court Jurisdiction

Author:Barnea & Co
Profession:Barnea & Co
 
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Recently, the Israeli Attorney General, in a legal opinion filed with the Israeli Supreme Court as part of an appeal filed by Facebook, opined that foreign companies (specifically those that do business via the internet) may not escape Israeli court jurisdiction even if the terms and conditions posted on their website state otherwise.

The appeal was filed by Facebook against a decision of a District Court in a class action initiated against Facebook, which is focused on privacy issues. Facebook argued that the Court should not allow the plaintiff to litigate in Israel, because the terms and conditions of Facebook, to which the plaintiff agreed, state that any legal dispute between Facebook and the members of the social network has to be litigated in California courts in accordance with Californian law.

However, the District Court ruled that, contrary to the legal claim of Facebook, the plaintiff can lodge the class action in Israel. The District Court noted that the court jurisdiction provision is aimed to deter the Israeli plaintiff from exercising his / her legal rights and as such, this provision, being part of a uniform contract, is null and void. In reaching its conclusion, the District Court noted the facts that Facebook provides its services to millions of Israelis and operates a Hebrew interface.

Facebook lodged an appeal with the Israeli Supreme Court against this decision, following which the Supreme Court asked the Attorney General to file his opinion on this matter

The Attorney General's conclusion is that this provision of the terms and conditions of Facebook does not bind Israelis that use Facebook. Several reasons were provided by the Attorney General for this conclusion, including, inter alia, the following:

This provision is aimed to deter Israelis from exercising their rights, due to various factors such as the cost of hiring a foreign lawyer and travel abroad; The...

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