Connecticut Defamation Law, The Internet, And Social Networking

In the Business Torts category of this blog, I recently covered the basic law in Connecticut concerning interference with business relationships.  Today's post concerns another business tort known as "defamation" and how it intersects with the growing use of social networking sites.

There already have been several lawsuits for defamation arising out of use of social networking sites, such as Twitter and Facebook. For example,  The California Defamation Blog lists several celebrities involved in defamation cases, including Courtney Love who was sued by a fashion designer for defamation after a series of derogatory Twitter posts by Love.  Craig Kanalley of Chicagonow.com reported that a property owner sued a tenant for disparaging Twitter comments. The Chicago Tribune recently reported on a defamation lawsuit brought by a mother and her son after a phony Facebook profile was created showing the son was a racist.   

Should Connecticut businesses be concerned?  Clearly, the type and variety of these suits are on the rise. In legal circles, these type of claims have a category of their own called "cyber slander" or "internet defamation."  Given the popularity in use of social networking sites, and the ease in which statements can be broadcast to millions, it is safe to  predict that more defamation cases will be filed in the future. 

Connecticut businesses can be affected by defamation suits involving social networking sites and the internet in a number of ways, such as:

  • Employees making comments about a competitor
  • Employees making comments about supervisors or co-employees
  • Employees making comments about the company's products
  • Competitors making derogatory comments about the company
  • Phony Facebook or Twitter profiles
  • Derogatory comments about the company 

In Connecticut, defamation encompasses defamation by spoken (slander) and written (libel) words. In general, to raise a proper claim for basic defamation, a plaintiff must show that:

  1. A defamatory statement was made
  2. The statement identified the plaintiff to a third person
  3. The statement was published to a third person
  4. The plaintiff's reputation suffered injury as a result of the defamatory statement

In regards to businesses, there is also a defamation claim sometimes referred to as "commercial disparagement" or "trade libel."  For this type of claim, a plaintiff must prove disparagement of a business' goods or services by falsehoods published or communicated to a third person.

With the ease of publication to millions over the internet, it is easy to see how someone might publish a defamatory comment whether it be on a blog, social networking site, or website.   Chances are, if you are in business, either you, someone who works for you, or a competitor has commented about the business in cyberspace.

For a business, the best way to avoid a lawsuit for defamation as a result of employee use of sites such as Twitter and Facebook is to have a written policy that governs employee use.  The details of each policy will differ depending on your business, but clearly the policy should prohibit any defamatory or derogatory comments about the business, employees, or competitors.

In situations where a competitor or customer disparaged your business' products or services, a business may want to consider legal action and determine if grounds exist to issue a cease and desist letter, a take down letter, or initiate a lawsuit.  Internet defamation can ruin a business' reputation overnight and should be addressed immediately regardless of whether the business pursues legal action.   

For a business, whether legal action is taken may depend on the severity of the disparagement and the damage done.  In some cases, a cease and desist or retraction is a practical solution especially when a defamation suit would bring added attention to the matter.  In other cases, legal action, such as a defamation lawsuit, may be required to stop ongoing damage or serious problems.

Regardless of the situation, Connecticut businesses should, at a minimum, monitor cyberspace for defamatory comments.  Comments that might lead to a lawsuit could come from your own employees, a competitor, or a disgruntled customer.  A written policy is a good way to minimize risks of employee comments.  As for competitors and customers, Google alerts is a good way to monitor use of a business' name on the Internet. The alert will send you an email every time your business name is found on the internet. 

Three Lawsuits Against Facebook For Fraud Raise Concerns For Advertisers

If your business is advertising on Facebook, or considering it, you should do some research on the newest allegations of advertising fraud against the online giant.  Facebook reportedly has over 250 million users so it is understandable that a business would want access to Facebook's users.  Facebook offers businesses advertising space online that is targeted to specific demographics of its users.  Facebook charges for the advertising based on the number of views or clicks that the ad receives from users.

As reported by TechCrunch's Michael Arrington, massive complaints started surfacing recently against Facebook for "click fraud."  Basically, advertisers were clicking on competitor's ads, or paying others to do it, to artificially drive the price up.  Advertisers were also reporting that Facebook was charging for more clicks than the ad was actually receiving. There are now three lawsuits filed against Facebook for advertising click fraud.

 The most recent lawsuit was filed on July 31st by an individual advertiser seeking class action status.   The second lawsuit was filed by Unified ECM, a software company, seeking class action status for massive click fraud by Facebook.  The first click fraud lawsuit was filed by sports company RootZoo and it also seeks class action status. 

BNET Media's Catharine Taylor posted a good report on the details of the first two lawsuits including email comments from Facebook.  In the email, Facebook maintained that the Unified lawsuit is "unnecessary and baseless."  Wendy Davis of Online Media Daly posted a good report on the fist lawsuit by RootZoo. All three suits alleged discrepancies between the charges by Facebook and the actual number of clicks recorded by the advertisers.

Although Facebook has denied all the fraud allegations, TechCrunch takes the position that the click fraud problem is real and confirmed by Facebook. The Lost Press Marketing Blog presents a different view accusing Unified ECM of a "marketing stunt" to get exposure through press coverage of its lawsuit. 

Any business considering advertising with a pay per click campaign, should take caution whether on Facebook, another website, or a search engine.  If you want to measure your return on investment, you should consider monitoring any pay per click campaign internally.   If you are considering Facebook, you should wait to see what Facebook does to reassure its advertisers that fraud will be monitored effectively.  For now, the problem does not appear to be going away.

 

Social Networking Lawsuits Are Big Risk to Business

I just read an excellent article posted on Law.com from the New York Law Journal on social networking and challenges to business owners and their legal counsel.  The authors Christopher Boehning and Daniel Toal focus on a new emerging problems associated with electronic discovery of social networking data.  The authors also point out many of the potential problems for employers and businesses related to social networking sites.

When Facebook started exploding in popularity, you could see that the future in communication was social networking.  Boehning and Toal cite to a New York Times articles that indicates the future is now upon us as more people spend time on social networking sites than e-mailing.  The authors correctly point out something I emphasize to all my business clients:  businesses need to have a policy on how to handle social networking sites like Facebook, MySpace, LinkedIn and Twitter.  The policy should cover the business' use of such sites and use by employees.  Policies on preservation of the data should also be included as social networking data is akin to the new email.

Lawsuits involving some aspect of social networking sites are increasing in frequency from across the country. Take for example the recent jury verdict in New Jersey against Hillstone Restaurant for violation of the Federal Stored Communications Act. 

In that case, the employers accessed an employee MySpace group that was dedicated to criticizing the employer.  Although the verdict amount was relatively small, the implications are far reaching.  This case was reported on by Charles Toutant in the New Jersey Law Journal.  The employees' trial brief is a good read and spells out some of the arguments in favor of employees' rights to privacy with social networking sites. 

The outcome in the New Jersey case may have been different if the restaurant had a policy addressing use and access to social networking sites.  Businesses will have different concerns when it comes to adopting a policy, and no policy will cover every situation.  However, the lack of any policy at all is likely to lead to problems and potential litigation.  The best way to avoid litigation is to implement a written policy on use and access to social networking sites.