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A Paris court has thrown out accusations that Yahoo and its former chief executive Tim Koogle should be legally responsible for the auction of Nazi paraphernalia that took place on its Web sites, a company representative says.

The ruling on Tuesday could spell the end of a three-year legal battle that tested to what extent regional restrictions can curtail global Internet use. It has raised issues of free speech, as well.

Back and Forth Rulings

The case arose in 2000 when the International League Against Racism and Anti-Semitism and the Union of French Jewish Students took Yahoo and Koogle to court in France. They asked the court to force the Internet company to block French Internet users from bidding on Nazi memorabilia that was being auctioned from a Web site Yahoo hosts.

The groups sought to charge Yahoo under a French law that makes it illegal to exhibit or sell items with racist undertones.

In November 2000, the French court ordered Yahoo to block Internet users in France from auctions selling the memorabilia. In turn, Yahoo asked a California federal court for a summary judgment against the order. The judgment was granted.

Shortly after the verdict, the French parties filed an appeal, arguing that the California court did not have jurisdiction in the case.

The Paris court's decision Tuesday to throw out the accusations spells a victory for Yahoo. The internet company has been arguing that a global company cannot be held to regional laws, and that it is protected by the U.S.'s First Amendment right to free speech.

It was not immediately clear, however, whether the French groups planned to appeal.

Reconsidering Policies

The case has sent ripples across Yahoo and other Internet auction sites, raising the question of the feasibility of local laws governing borderless Web enterprises. This controversy and other similar cases have also prompted sites to reassess their policies. For example, Yahoo Deutschland bans the auction of Nazi memorabilia, which is outlawed in Germany.

Two years ago, Yahoo imposed fees for auction items, and it implemented more pointed guidelines for acceptable items. Sale of items associated with hate groups is prohibited.

Likewise, EBay broadened its standards, declining the auction of Nazi memorabilia or similar goods, even for historical value.

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