Israeli customers filed in Israel a motion for a class action against the LinkedIn company, contending that it automatically renews paid subscriptions in violation of the Israeli Consumer Protection Law, despite the fact that under the LinkedIn terms of use in the event of a dispute, laws of the state of California, U.S.A, shall exclusively govern and the Courts of Santa Clara County, California, U.S.A, will have exclusive jurisdiction.
The Court decided that LinkedIn may be sued in Israel. An international corporation with small customers in Israel is not permitted to stipulate in a standard contract that only a foreign legal system will apply to it in the event of a conflict. Such a condition in a uniform contract is discriminatory and may be invalidated. Israeli law will apply to an internet service of a foreign company if the company has an Israeli website or if it is active in Israel. The activity in Israel must be examined objectively based on the scope of the economic activity that is carried out and subjectively based on the scope of efforts invested for the purpose of penetrating to the Israeli market. To examine the proper forum for the hearing, one must first examine which forum has the most connections to the dispute; second, what the reasonable expectations of the parties are regarding the place of the hearing; and third, public considerations and which forum has a genuine interest in hearing the case. If there is a reasonable possibility that Israeli law will apply, then the Court in Israel will hear the claim. Here, LinkedIn has a wide scope of activity with millions of Israeli users, offices and employees in Israel, it allows targeted advertising to the Israeli audience, payment is made in Israeli currency, and even the State of Israel recruits employees through it. Most of the connections lean towards the Israeli forum; in light of the scope of Israeli activity, it appears that LinkedIn had a reasonable expectation that disputes would be clarified in a Court in Israel and there is a public interest that this forum hear the proceeding. These data establish "activity in Israel" and indicate that the Court in Israel is the proper forum for the hearing under Israeli law as of this stage in the proceeding. Therefore, the Israeli Court will hear the case and will do so under Israeli law.