Germany passed an Internet law on Friday meant to keep cyberspace smut and other illegal material out, but critics said it left open to what extent online services are responsible for content they don't control.
"The liability provisions for providers are a big unknown," said Christopher Kuner, a Frankfurt lawyer specializing in cyberspace issues.
German officials hailed the law as a groundbreaking effort to set rules for the burgeoning field of electronic commerce and said it would boost the market for online services.
Critics, however, called the law an example of Germany's urge to over-regulate, while adding that important questions were left with only vague answers.
The American Chamber of Commerce in Germany said liability for Internet services will have to be tested by court rulings, which "may cause prudent investors to hesitate."
Under the law, online providers can be prosecuted for offering a venue for content illegal in Germany--such as child pornography or Nazi propaganda--if they do so knowingly and it is "technically possible and reasonable" to prevent it.
This could apply to World Wide Web sites, forums and similar exchanges originating in other countries and offered by German online services without direct control over their content.
Service companies like CompuServe Inc. and America Online Inc. maintain they provide only a connection similar to one provided by a phone company, which is not held responsible for everything its customers say on the phone.
German prosecutors, though, have been in the forefront of attempts to rein in the globe-spanning free-for-all on the Internet.
A leftist politician, Angela Marquardt, was charged with helping others learn how to commit crimes by linking her Internet site to an electronic magazine that included articles on how to build bombs and derail trains.
A Berlin court cleared Marquardt on Monday without delving into the issue of how courts should deal with material banned in Germany but stored on a computer somewhere else.
In Munich, Bavarian prosecutors have charged the German chief of the U.S. online service CompuServe with "knowingly" allowing pornographic images, including child pornography, to reach customers from the Internet.
Though the new legislation uses similar language, CompuServe Germany broadly welcomed the new law.
Juergen Ruettgers, research and technology minister, said children must be protected from material deemed offensive.
"That applies even to a network that knows no national borders," he said. "The Internet is not outside the reach of the law."
But in an illustration of the difficulties involved, a key provision of a 1996 U.S. law against indecency online was invalidated last month by the U.S. Supreme Court, which said that, in seeking to protect children, the law trampled on the rights of adults.
A lawmaker from the Greens party, Manuel Kiper, scoffed at the government's "pedantic regulation of the resource of the future" and said it was seeking "an island solution for globe-girdling communications flows."
The law gained final approval in the upper house of parliament, the Bundesrat, an unusually swift six months after the government proposed it. It takes effect Aug. 1.
Ruettgers said Germany is "a pacesetter" in opening the Internet for commerce and creates legal clarity in key areas.
For example, the law makes Germany the first country to set rules for so-called digital signatures, codes used to protect Internet communications and give them the status of a legal document, he said.