Social Media and Business Reputation
The term “social media” probably makes you think of a variety of famous websites, like Facebook, Twitter, LinkedIn, Yelp, or YouTube. Social media may also be defined broadly as the online interaction of individuals and the exchange of user-generated content and information. Now a part of everyday life for millions of Americans, social media present a variety of opportunities and potential problems for businesses, relating to business reputation, intellectual property, and employment issues. In this column, I will discuss legal issues relating to reputation in connection with social media; future columns will address social media’s impact on intellectual property and employment concerns, and how business lawyers come into the mix.
“Word-of- mouth” has long been a shorthand term for the reputation of a product or business, as conveyed personally from one individual to another. Social media take the word-of- mouth effect and multiply it exponentially: rather than merely griping to a few friends, one dissatisfied customer now can reach thousands or even millions of other potential customers; on the bright side, however, one happy customer can potentially reach that same massive audience. Social media can also provide a forum for debates among customers with divergent views. For example, anyone who has spent time reading online customer reviews of restaurants has probably noticed that the same establishment can inspire wildly different opinions.
But when does criticism cross the line into defamation? Defamation is usually defined as a false statement published to a third party, negligently or intentionally, not protected by any legal privilege, and which causes special harm or constitutes defamation per se. Defamation includes slander, which usually refers to a spoken statement, and libel, which usually refers to statements in writing or broadcast electronically. “Defamation per se” is defamation which on its face would be harmful to someone’s reputation, regardless of context, such as an accusation that someone has engaged in criminal behavior.
The federal Communications Decency Act of 1996 states in part that “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”. This law protects online service providers from defamation lawsuits based on content posted to their websites by third parties. Thus, if a speaker defames your business by posting defamatory statements in an online forum provided by someone else, you could bring suit against the speaker, but not against the online forum itself, as long as the operator of the forum was not the same person who posted the comments. For instance, if a website user posted a restaurant review online falsely claiming that a restaurant was infested with rats, the restaurant would have to track down and sue the actual user, and could not succeed in suing the website on which the comments appeared. This can leave a plaintiff with few practical options, if the actual speaker cannot be found, or is located abroad, or simply has no money to pay damages.
The infringement of intellectual property online is examined under a different set of laws, and I will address those issues in my next releases.