Losing Battle?

It may be tempting to sue when someone bashes your company online, but free speech has the upper hand.
Magazine Contributor
3 min read

This story appears in the December 2003 issue of Entrepreneur. Subscribe »

Last month, I wrote about the need to protect your computer network from attacks by hackers. This month, let's consider another way your company might come under electronic attack.

Anyone who's had a bad experience with your business can vent anger these days in ways that go way beyond grousing about it in the barbershop or raising a stink at the annual shareholder's meeting. Unhappy investors fill Internet chat rooms with invective about companies they love to hate. Disgruntled former employees fire off e-mails to former co-workers berating the company. Frustrated customers put up Web sites that bash a given company.

"The Internet gives us a worldwide audience and the cloak of anonymity," says Patrick Fahey, an attorney with Shipman & Goodwin LLC in Hartford, Connecticut, who specializes in intellectual property litigation.

Can these attacks cost you customers? Possibly, particularly if the tirades accuse your business of false advertising or poor treatment of customers. If they allege financial sleight of hand, they might persuade venture capital firms to back off. If your company is publicly traded, they could affect stock prices.

You could sue for defamation, libel or trade disparagement in hopes of getting a court to order the perpetrator to stop. To win, though, you'd have to convince the court that your company was being irreparably harmed by the tirades. That's not easy.

Just as difficult is finding out who your accuser is when all you have to go on is a screen name. "It's easier to find them if there's a Web site, because you can track down the server through the registry of domain names," Fahey says. When the libel sprouts from a user name in a chat room or a listserv, the ISP is bound by its privacy policy not to reveal identities. A court can issue a subpoena requiring disclosure, which the ISP must obey, but it's not easy getting one. That's because Americans not only have a constitutional right to free speech, but also have the right to speak anonymously. On the other hand, victims have a legal right to face their accusers. The trick for the courts is balancing these rights.

A recent California case, Intel Corp. v. Hamidi, had an interesting twist. A disgruntled former employee used Intel's own network to send out a rash of e-mails to 30,000 former co-workers, accusing the company of unfair labor practices. Intel sued, claiming the employee was trespassing on its computer servers. The court didn't buy it, comparing the e-mails to a protester holding a sign or shouting through a bullhorn outside corporate headquarters. The former employee's rants counted as free speech rather than trespass, especially because the sender was not a business, and the recipients could ask to be removed from the mailing list.

What's the lesson? Chances are you won't be able to stop people who don't like your company from broadcasting their opinions. Instead of pouring your resources into lawsuits, concentrate on running your company so well that the ranters won't feel the need to trash it.

Jane Easter Bahls is a writer in Rock Island, Illinois, specializing in business and legal topics.

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