Ignore, Respond, or Sue? | Online Defamation Law Suits

Posted by admin | July 28th, 2010

Is it smarter for a company to sue anonymous online critics, ignore them, or confront the problem head on by replying to the criticism? This is debate that has raged in online reputation management, online defamation, and business circles for years. There is no definitive answer. This article gives a pretty good view on the question, though.

When an anonymous critic attacks a company’s reputation online, the initial reaction is often to launch an expensive legal offensive to quiet the damaging criticism. However, before jumping headfirst into a costly and potentially risky litigation strategy, companies should consider whether they are using the court system to vindicate their protected legal rights or whether they are turning to litigation in an attempt to stifle unfair, albeit protected, criticism.

A lesson can be learned from a recent case involving USA Technologies, a NASDAQ-listed company that supplies products for devices such as vending machines and photocopiers. The company is in a tough spot, with its stock price having plunged more than 99% during the past decade. Despite this poor performance, the board of directors has continued to compensate company management handsomely.

As a result, the blogosphere has not been kind to USAT. One commentator, writing under the pseudonym “Stokklerk” on the Yahoo! Finance message board, accused USAT’s CEO of having a “worldview” where “humanity exist[ed] to be fleeced,” and stated that USAT had committed “legalized highway robbery” and was operating its business as a “soft Ponzi” scheme. Stokklerk further posted that “two top people at USAT” had “skimmed over $30M” from USAT by promoting a “story to lure investors and then” have the management approve “massive pay packages” that bore no correlation to company performance.

The entire article is worth reading. It gives a very good perspective on the issue without being too biased. This problem is neither easily explained nor solved. It is good to see someone looking into it.

Unwanted publicity - can be like a virus on the Internet. There are firms such as Reputation Hawk that specialize in cleaning it up.

Leave a Comment

Please note: Comment moderation is enabled and may delay your comment. There is no need to resubmit your comment.