PROTECTING YOUR COMPANY’S REPUTATION: Online Defamation Strategies that Work and When to Use Them

PROTECTING YOUR COMPANY’S REPUTATION:

Online Defamation Strategies that Work and When to Use Them

Gregory B. Collins, Co-Managing Member, Kercsmar & Feltus, PLLC

NOTE: This article was originally published by the Assocation of Corporate Counsel Arizona Chapter in its quarter four newsletter.

The Internet has revolutionized how consumers make decisions. According to a recent survey, 92% of consumers now rely on online reviews before making a significant purchase. And remarkably, 88% of consumers trust online reviews as much as personal recommendations.[1] The upshot: one negative online review can cost a company millions of dollars. Because of this, every company’s intangible assets and its goodwill are at risk on the Internet, every day.

In the past, corporate reputations were carefully cultivated and controlled by public relations firms and marketing teams. And while companies still spend hundreds of millions of dollars on branding, traditional advertising is having less of an impact on consumer behavior.[2] Instead, online consumer and business-to-business reviews are now the principal driver of corporate reputations.[3]

On websites like Yelp!, consumers can leave unfiltered (and even untrue) reviews about nearly any business. A plethora of industry-specific review sites like Angie’s List (for home service providers), ZocDoc (for doctors) and Avvo (for attorneys) drive consumers to the most recent “hot take” opinion, instantly and for free. Businesses can even be reviewed by their own employees on Glassdoor.com. On any of these sites, a disgruntled consumer, ex-employee, or a dishonest competitor can post a review that contains false and defamatory information. And if a bad actor is sufficiently motivated, he or she can create a dedicated webpage—at virtually no cost—to attack a company by using WordPress.com or Blogger.com.

Many businesses assume that if they complain enough, a responsible corporate review site will take down negative content. But it rarely works out that way. Resistance to take-down demands is increasing. In fact, a cottage industry of websites like RipoffReport.com has developed: under the guise of “not backing down,” such websites tout their refusal to remove negative (and often false) consumer reviews. Even some of the most visited websites, Facebook and Twitter, will not take down a post unless it meets their particular definition of “harassment”—which may or may not take the falsity of the review into account.

With so much of their corporate value at stake, companies need a multi-prong strategy for handling negative online reviews. This plan should include a public relations component, a search engine optimization complement to the PR effort, and finally—when appropriate[4]—a litigation strategy that can address and remove the defamatory online review. As explained below, this is a developing area of the law and the rules are constantly changing. But any litigation seeking to address online defamation must take into consideration: (1) the protections that websites are afforded under Section 230 of the Communications Decency Act; (2) the specific take-down policies of the website at issue; (3) the ability to identify the poster of the offensive material; (4) the cost-benefit of pursuing a defamation suit; and (5) whether de-listing the website on Google may efficiently accomplish the company’s end-goal.

1)          The Barrier Created by Section 230 of the Communications Decency Act.

The single biggest impediment to combating online defamation is Section 230 of the federal Communications Decency Act. It states: “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.”[5]

In law school, we were taught that if a newspaper knowingly republishes a false statement, the newspaper can be held liable for that libel. But because of Section 230, this rule simply does not apply on the Internet. The text of the statute is clear: a “provider” of “internet computer service[s]” is not treated as the “publisher” if it republishes “information provided by another.” While some have argued that Section 230 immunity should only apply when a website allows individuals to post in real-time (like a chat room), courts have consistently held that Section 230’s protection extends much further.[6] As a result, any website that re-posts content will invariably be granted full immunity.[7] In fact, websites are even allowed to add headlines and commentary to the content they re-post.[8]

The legal protections provided by Section 230 are unique to the United States. Canada, Europe and Japan have no such protections for website operators. Nor is it uncontroversial here: in 2013, forty-seven state Attorneys General wrote to Congress in support of repealing Section 230. But as it stands now, there is no pending legislation to repeal—or even limit—Section 230’s blanket immunity for websites.

As it is currently interpreted, Section 230 simply bars defamation claims against a website that re-posts content provided by an individual. As a result, websites like Yelp!, Facebook, or Twitter cannot be sued or held liable for hosting defamatory consumer reviews and comments.

2)          The Safe Harbor Provision of Section 230 Allows Websites to Voluntarily Remove Defamatory Content.

While websites are generally immune from liability under Section 230, those websites are allowed to voluntarily remove defamatory content without forfeiting that immunity.[9] Nearly every website posting third-party content has a policy barring abuse, harassment, or otherwise illegal activity.[10]

Despite this, companies like Facebook, Twitter and Yelp! have increasingly taken a hardline position with respect to the Section 230 safe harbor. This may be the consequence of the sheer volume of take-down requests; it appears these companies simply do not want to continue to arbitrate an avalanche of individual, fact-specific requests. These companies, in particular, will no longer take down a post simply because it is allegedly defamatory. Nonetheless, before filing a lawsuit, it is always worth approaching the relevant website to determine if it will voluntarily take down the post.

3)          An Anonymous Post Does Not Mean the Poster is Undiscoverable.

It comes as no surprise that the majority of false online reviews are posted without attribution. But the fact that a poster did not leave his or her name does not mean the post is entirely anonymous. Every website tracks the IP address of the computers and devices that visit it, and companies that repost third-party content must provide this information in response to a civil subpoena.  Accordingly, in order to identify the poster of a defamatory review or comment, the defamed company may file suit against the anonymous “John Doe” who posted the defamatory content. The aggrieved company can then seek an order allowing it to serve a subpoena on the website in order to discover the identity of the John Doe defendant.

Once the website receives the subpoena, by law, it must provide the poster time to move the court to quash the subpoena. If that subpoena is not quashed, the website must provide the poster’s IP address. With this information, the corporate plaintiff can track the poster to a specific city and determine which Internet Service Provider (“ISP”) the poster used. A follow-up subpoena to the ISP should end up with the ISP identifying the individual who made the defamatory post.

While there are certain methods that a poster can use to hide or mask their IP address, IP masking is surprisingly rare. Because of this, an anonymous post is not typically an insurmountable barrier to addressing and correcting online defamation. In fact, it is most often the “anonymous” reviews that can only be addressed through litigation.

4)          The Costs of Litigating a Defamation Suit Must be Weighed Against the    Benefit.

Anyone familiar with litigation knows it is costly. Discovery in defamation cases is often very broad and can lead to abuse. If the poster falsely stated that a target company sold defective widgets, in discovery, the poster will pursue any and all documents related to those widgets in the hope of obfuscating and harassing the plaintiff until it goes away.

Accordingly, every internet defamation plaintiff must consider the costs versus the benefit of the litigation. There are two potential litigation goals: monetary recovery and removal of the online content. Monetary recovery is limited to an award of a company’s lost profits and damage to the company’s goodwill. Only if these damages are high enough—and provable—will it make sense to pursue the litigation from a loss-recovery perspective.

But even where the provable damages exceed the cost of litigation, the defendant-poster is very rarely collectable. In these cases, the litigation should focus on ending the ongoing harm. Companies often feel time-pressure since anyone with an Internet connection can find the offensive post just by searching Google. And while websites generally do not voluntarily remove defamatory posts, most websites will remove any post at the request of the poster. Because in most cases the defendant can have the defamatory post(s) taken down, every settlement can and should require the defendant to request removal.

If for any reason the defendant-poster will not agree to request removal, then the plaintiff can seek a take-down order from the court. Following the entry of a judgment, defamatory content is no longer entitled to First Amendment protection. Therefore, as part of any judgment, a plaintiff should ask the court to include language requiring all publishing websites to remove the defamatory post(s).

5)          Having a Website Delisted on Google Once Judgment is Entered.

There are a few hardcore websites that will not take down a post even after a judgment is entered.[11] A strong argument can be made that Section 230 immunity does not apply even to websites after a judgment is entered finding that a post is defamatory. In those cases, with a judgment against the original poster in hand, a lawsuit could be brought directly against the website where the defamatory information remains posted.

But a lawsuit against the website may not be necessary. For once a judgment is entered, upon demand Google will delist the webpage from its search engine. A webpage delisted by Google cannot be found unless an individual has the specific URL. Given Google’s current search dominance, this means that although the defamatory statements are still out there in cyberspace, they are very unlikely to be seen by anyone new.

Conclusion

Even the most ethical and well-run companies will eventually encounter a disgruntled customer, or an unscrupulous competitor, who posts false and defamatory information online. With more than 80% of a company’s value tied to reputation, and with consumers valuing online reviews the same as personal recommendations, companies can no longer afford to simply ignore false online reviews. While not every negative online review is grounds for a defamation lawsuit, it is often the best—or only—means of addressing verifiably false online statements.

About the author:

Gregory Collins is a Co-Managing Member of Kercsmar & Feltus, PLLC.  He heads the firm’s intellectual property practice.  As part of that practice, Mr. Collins handles a wide-range of matters relating to unfair competition on the internet, including internet defamation, false advertising and DMCA notices.  For his clients, Mr. Collins has obtained multi-million dollar judgments in internet defamation cases.  He has also procured court orders requiring that defamers remove false information from the internet.