Our defamation laws are outdated in the digital age

The ruling by the US Supreme Court that American internet service providers (ISPs) cannot be sued for libel over content hosted on their sites will be unwelcome news - at least for British ISPs and for Tony Blair who, along with "e-commerce" minister Patricia Hewitt, has harped on about making Britain a wonderful place to do e-business. The fact is that this American ruling demonstrates what an unattractive e-place Britain's laws make it.

The trouble is that Britain's libel laws still offer no protection to the printers and distributors of material accused of being libellous. When Private Eye used to attract libel suits (often from Robert Maxwell), a common tactic used against it was to threaten newsagents that stocked the magazine that they would be sued along with the editor. That often had the chilling effect of stopping distribution: fearing the costs of lawsuits, they simply took the easy option.

Last year, a High Court ruling found Demon, a British ISP, liable for the content of transitory postings on some of its computers, even though no one at Demon created the postings, or even looked at them. (People at ISPs have other things to do - such as ensuring that the service actually works.) Demon settled out of court, paying £15,000 in damages and £230,000 in costs.

Consequently, British internet companies have had to spend their time dealing with dozens of often trivial complaints about allegedly libellous website content. Fearing huge fines and legal costs, they simply take them down. Breaching the contract with the customer is cheaper than getting stung for libel costs. Some of the people who have taken the trouble to create those websites have begun moving their business abroad; the Supreme Court decision will reaffirm the US as the place to go.

As it stands, the Defamation Act means that anyone so minded can invoke the spirit of Robert Maxwell and punish the distributor rather than the creator of offensive content. In an age when the amount of information available to us all is exploding, and knowledge is what is truly valuable, Britain cannot afford to be stuck with an outdated attitude to the simple carriers of the data that is now the stuff of everyday life.

The movement of a few websites might seem a trivial matter over which to alter a law. But freedom of expression, in this instance, goes together with commercial freedom. It is important that everyone should be able to make their voice heard through the internet - and that the owner of the loudhailer should not be sued for making that possible.