LET'S SAY you live in Australia and believe you've been libeled by an American newspaper -- but an American newspaper easily accessible on the Internet in Australia. Where do you sue? That's the question that the High Court of Australia considered last week. It came up with the wrong answer in the view of many free-speech advocates and in our view as well. But we don't pretend the question is easy. The penetration of the Internet has cast many old questions of national sovereignty vs. freedom of speech in a new light, and nations are just beginning to figure out how to respond.

The Australian court allowed a libel suit to go forward in Australia against Dow Jones & Co. concerning an article published in Barron's magazine and placed on the Wall Street Journal's Web site. Like other Commonwealth countries, Australia has far harsher libel laws than does the United States, where the First Amendment sets a high burden of proof. The Post -- along with other media organizations -- filed a brief supporting Dow Jones's case. If Australian courts can hear a case involving American speech merely because an Australian could read the article on the Internet in Australia, much domestic speech suddenly becomes hostage to norms in Australia and other countries. Australia and England make libel suits easy; in the Netherlands, offending the royal family is illegal, and several countries prosecute Holocaust denial. In the nondemocratic world, writing the truth is often considered a crime.

To avoid liability, newspapers and others with assets or personnel abroad would either have to block access to their content in many countries or would have to censor themselves. Both options are repugnant to anyone whose business is disseminating information and ideas. Fixing this problem won't be easy. Americans rightly resist the idea that other countries might serve as safe harbors from which the Internet could be used to subvert American domestic law. The government does not regard Internet gambling aimed at Americans as beyond the reach of prosecutors just because the Web sites might be housed on servers in Caribbean islands. But if a gambling Web site accessible here is subject to American law, why shouldn't Australia be able to apply its libel laws to a site accessible in Australia?

To an American, the answer to this question is simple: Speech is different from crime or other punishable behavior. The rule ought to be that libel suits for Web-based material proceed under the laws of the country in which the offending statements were written and where they were placed on the Internet. That's the course indicated by an opinion Friday by the U.S. Court of Appeals for the 4th Circuit in Richmond, which held that two Connecticut newspapers could not be sued for libel in Virginia by a prison warden merely because their content was accessible there. If the newspapers "did not manifest an intent to aim their websites or the posted articles at a Virginia audience," the proper venue is Connecticut, the judges wrote.

The same principle ought to apply internationally. In the long run, the principle would serve all democratic countries by preventing their domestic speech from being limited by the laws of less-open societies. Speech deserves better than a race to the bottom.