Online Business Defamation


Defamation is one of the most prevalent legal concerns facing online businesses. Defamation is any false statement of fact that is harmful to someone’s reputation and published “with fault,” meaning as a result of negligence or malice. Libel is generally classified as written defamation and slander is generally classified as oral defamation. Slander can be made via oral comments to another, or also by comments broadcast over the radio or television. Until the recent development of “podcasts” and other types of online videos, such as those featured on YouTube, defamation on the Internet was largely deemed to be Libel. As far as proving defamation is concerned, true statements and statements that are opinions are defenses. The problem for businesses is that nany negative statements are really only opinions. If a statement is incapable of being objectively proven true or false, it’s not defamation.

When defamation occurs online through a false review, false comment on a forum, etc. and it affects your business, can it be stopped?


Defamation on Facebook, Twitter and Other Social Media

Can your business have content removed from Facebook or other online mediums? I have received that question often from business owners. Many individuals and businesses are defamed on social media such as Facebook and Twitter. Usually, the first instinct by the defamed person or business is to question whether the social media involved can be held liable. The Communications Decency Act will generally shield interactive websites including social media sites for liability for statements or content posted by its users. However, most social media sites have terms of use that restricts posting any unlawful content or content that infringes upon the rights of others. But, unlike sending a host provider a DMCA take-down notice, social media websites are not compelled to take down any defamatory content.

However, this does not mean that the individuals posting any defamatory content are not liable for their illegal actions. Depending upon the defamatory content, you or your business may have to show actual economic harm (damages) stemming from any false statements damaging your online reputation. Section 230 of The Communications Decency Act of 1996 protects blog owners and other interactive website operators. It states that it “precludes courts from entertaining claims that would place a computer service provider in a publisher’s role.” The law protects Internet “intermediaries” who merely “provide or republish speech by others.” However, this immunity is not absolute as a website cannot alter the meaning of the content published on the site and still be immune from liability.

The bottom line is that nothing short of a court order will compel Facebook or any other social media site to take down a page or profile. These sites are clearly exempt for defamatory content unless it can be shown the content is in fact defamatory.


What can your business do?

Even though your business cannot sue a blog, social media platform provider, etc. for false remarks made about you or your business, you can still sue whoever posted the defamatory remarks. If your business has been defamed online, you can and should address it. You may be considering adding an anti-disparagement provision to your business customer contracts. But, while defamation is illegal, negative remarks that are not false and are merely opinions are not illegal. Your business will not be able to prevent a customer from making negative remarks about your business online. If that person has previously agreed to a non-disparagement provision, however, that conduct then becomes actionable by your business.

But, are non-disparagement clauses restricting negative customer comments online enforceable? As with any breach of contract claim, your business would have to prove a breach and then damages. A clause that specifically and unequivocally defines which actions are considered to be a breach is imperative. The negative statements must clearly violate the non-disparagement clause. Even if there is no doubt about whether a breach occurred, proving damages in a non-disparagement case (and in defamation cases) is difficult. (Although a liquidated damages provision can be used to sidestep this concern if drafted properly.)

The only problem is that these clauses may not be enforceable as against public policy for being unconscionable or unfair provisions in a consumer agreement. More importantly, the drawbacks of using such a clause in your site terms of use or customer agreements can be severe. This practice may leave your potential customers with an uneasy feeling and may result in generating the unwanted negative publicity that your business is trying to avoid in the first place!

There also may be other avenues to pursue in defending your business’s reputation online, such as false light claims and similar common law claims.


Should your business erase negative comments from social media fan pages?

No, unless the content contains abusive, obscene or threatening content. Otherwise, your business should simply respond to any negative posts on its own fan pages in a professional and courteous manner and attempt to defuse the situation. Erasing negative feedback or comments can create a firestorm of bad publicity and, in my experience, only ends up hurting your business in the long-run.