Smith International Legal Consultants, P.A.

Brazilians are a tech-savvy society, and with the announcement that Brazil is now the fifth largest market for Facebook with over 25 million users, technology issues continue to bubble up in the courts. Google has recently made news with a judgment against it for failing to reveal the identity of three bloggers in the northern state of Ceará, and a number of Brazilian courts have wrestled with the rights of internet search engines and hosting companies with individuals' rights to sue for defamation. So when it comes to issues like defamation and freedom of speech, what can tech companies expect when doing business with Brazil?

• Pro-active judiciary. Whether it is a fine for copyright infringement in Rio Grande do Sul, a judgment to pay damages for failure to remove copyright infringing materail in Minas Gerais, or fines for not removing defamatory material in Mato Grosso, courts have been quick to hit Google, Yahoo, and other internet companies with fines for not adequately policing the blogs and videos they host.
• Different damages. Brazilian law allows plaintiffs to seek "moral damages" (danos morais in Portuguese) for harm done to one's reputation or mental suffering. Courts are more willing to assess this type of damages, including in commercial cases. While the numbers are not as large as U.S. punitive damages, they are more frequent.
• Stricter scrutiny. While some courts have chosen not to hold email providers responsible for damages arising from defamatory emails, the protection of companies hosting blogs is reduced. In a recent ruling, Brazil's highest commercial court (the STJ) decided that Google is liable for damages from defamatory material posted on blogs and social networks from the moment the judiciary finds Google should remove the material. There is some safe harbor because the judge must first issue a ruling, but the courts are not agreeing that Google's Terms of Service protect Google. Specifically, Google has argued that it should not be responsible for damages stemming from defamatory material posted on websites it hosts because users agree to not hold Google responsible. To this point, it appears the courts have turned a deaf ear to this argument.

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