Articles/Publications

Online Business Defamation: A New Frontier

By Christopher D. Strang

     The explosion of business review websites and social media applications brings not only opportunities for businesses to get exposure, but also risks of very public negative commentary.  While everyone is entitled to express opinions, that entitlement does not extend to protection for posting demonstratively false statements of fact about businesses online. It is imperative for business owners to monitor online rating websites and relevant social media forums, in order to quickly spot reputation-harming online business defamation. The longer the posts remain up, the greater the potential harm to the business.   

You’ve Spotted a Defamatory Post- Now What?  

               When confronted with online defamation businesses have few options.   First, a business may contact the host website to request removal of the defamatory post.  Websites have a wide range of policies regarding online business defamation. Some will directly review and remove clearly defamatory comments, some will do nothing whatsoever, and some fall on the spectrum in between. Second, the business owner may try contacting the author, to reconcile differences and have them voluntarily remove the post. Finally, if the first two options fail or are seemingly unavailable, the next step may be to consider consulting an attorney and pursuing a legal remedy.

Legal Framework of an Online Business Defamation Claim

     In Massachusetts, there are five elements that comprise an online business defamation claim. A business must prove, “(1) that the defendant published a written statement; (2) of and concerning the plaintiff; that was both (3) defamatory, and (4) false; and (5) either caused economic loss, or is actionable without proof of economic loss.” Noonan v. Staples, 556 F.3d 20 (1st Cir. 2009). Further, a statement is considered defamatory when it, “may reasonably be read as discrediting [the business] in the minds of any considerable and respectable class of the community.” Clay Corp. v. Colter, 2012 Mass. Super. LEXIS 357 (Mass. Super. Ct. 2012). It is also worth noting that, in the context of online business defamation, federal law limits who businesses can hold legally responsible for defamatory postings. Businesses can generally bring a claim only against the actual author of the defamatory comments and not the hosting website where the comments are posted. 

     A recent Massachusetts case, Clay Corp. v. Colter (Mass. Super. Ct. 2012), signaled that it is possible for a business to make a viable case against the author of online defamatory comments. In that case the court entered judgment in favor of the defamed business, finding the authors liable for $750,000, to compensate for the defamatory impact to the business. The court, however, stopped short of ordering that the authors remove the offending posts, citing First Amendment free speech as a limiting factor. Thus, while courts are seemingly willing to rule in favor of defamed businesses the First Amendment may impede full relief.    

Takeaway

     The Internet can be a business’s best friend just as easily as it can be a business’s worst enemy. Online posts are immediate and far-reaching, so reaction must be swift. Thus, it is vitally important to police what is said online and understand what options and legal remedies are available to protect your business and your livelihood from online business defamation.

For more information contact Chris Strang. Partner at Strang, Scott, Giroux, & Young, LLP.

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