Physical location of hosting

Hi Alasdair I have a sale listings site. Users create an account on the site and pay me to list their item. The site then simply forwards messages from interested buyers to the seller. It is a global site and I have seperate sub-domains set up to target the major English speaking countries. My largest market is the USA, and dues to a number of factors I host the site on a data server located in Texas. (given the largest numbers of customers are in the US it makes sense to host it there from a speed/performance perspective). I am concerned that my site’s T&C’s and Privacy Policy (which both state are based on English law) may be irrelevant given the fact that the site is physically hosted in the USA. My major competitor also competes in the US market and makes it extremely clear in their T&C’s that their site is hosted in the UK and that the T&C’s relate specifically to English law. I’m starting to wonder if hosting in the US is too much of a ‘business risk’, given that it could be argued anyt contact my site enters into with US customers could be based on US State law given the site is hosted in the States. Any advice and thoughts on the subject would be appreciated.

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Alasdair Taylor's Answer

This is a common problem.  The global patchwork of legal systems is ill-suited to regulating the internet.

I strongly suspect that as you have users in Texas and are hosting in Texas then at least some of the possible regulatory issues and legal disputes that could arise from the site would be justiciable in the US.  However, my entire experience is of English/EU law, and you would need to speak to a US/Texan lawyer to confirm the precise nature of the risk.

If you moved the site hosting from Texas to, say, the UK, would that remove any or all US legal risks?  I doubt it.  If matters were reverse, and a US-based service provider was providing services to UK based customers – especially consumers – there are circumstances where I can imagine the UK courts accepting jurisdiction and applying English law, whether the servers were situated in the US or the UK.  US legal risks might be reduced, but I don’t think they would disappear.  Again, this is really a question for a Texan lawyer – one who is familiar with both internet law and private international law.

One way to manage the risks would be to have different T&Cs for different jurisdictions – e.g. one for the US and one for the EU (where the relevant law is semi-harmonised).  However, that’s a messy solution, and there is only so much risk that T&Cs can manage away.

I don’t know any suitable lawyers, but if you decide to seek professional advice you could start with looking at one of the big US legal directories.  E.g. Martindale Hubbell.

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