Your
Online Reputation - Protecting Your Business from Social Media
“It takes
20 years to build a reputation and five minutes to ruin it.”
—Warren
Buffett
You have worked hard for years to build a well-respected,
profitable business in Maine. Yet things
are slow. You search for an answer. You Google your company’s name and find
misleading, negative reviews. Is the author a disgruntled ex-employee or an
underhanded competitor hiding behind a fake Internet persona? What do you do? While social media has revolutionized how
businesses and consumers interact, it has also created new legal risks and
challenges for businesses attempting to capitalize on the Internet’s vital role
as a source of consumer information. Facebook
and Twitter are now common ways for businesses to connect with their customers.
Similarly, consumers use a host of other
social media platforms, including Yelp, Google, YouTube and blogs to share
their experiences and opinions—both good and bad—of a company’s product or
service. Legal developments typically
trail behind societal changes. The same
is true in the social media context: Our
society’s almost universal use and reliance on social media is now just
beginning to reveal a number of legal risks to businesses, including two primary
risks: (1) consumers or competitors
posting false negative reviews that adversely impact sales, profits and the
company’s reputation, and (2) a company creating its own liability by posting
false (or confidential) information online. Communicating untrue information that
negatively affects a person’s or a business’ profits, sales or monetary gain is
known as defamation. These statements
are either slander (spoken defamation) or libel (written defamation) and can be
the basis of a lawsuit. The laid-back,
shoot-from-the-hip style of most social media users for posting their comments
online can have monumental consequences for the reputation and liability of
your business.
WHAT IS DEFAMATION?
Although there is some variation from state to state,
defamation generally occurs when Person A makes a false statement to Person B
about Person C, and that false statement causes economic loss to Person C. In the resulting lawsuit, Person C sues Person
A for defamation.
PROTECTING YOUR ONLINE REPUTATION
At one time, a word-of-mouth recommendation was the most
trusted and valued endorsement a company could earn. While word-of-mouth still exists today, it
takes on a modern format: Internet reviews, product or service ratings and user
comments. This information creates a
company’s reputation in the 21st century. With today’s ever-increasing reliance on the
Internet, a company’s online reputation is one of its most valuable assets. A recent market survey by Cone, a Boston-based
market research firm, found that 80 percent of people have changed a product or
service decision due to a bad review.[1] Therefore, it is not surprising that
companies go to great lengths to protect, maintain and improve their online
reputations. Historically, companies
avoided confronting negative reviews under the theory that more attention would
heighten the damage. But recently, this
trend has been changing. Companies are
more quickly responding to defamatory comments by taking legal action against
the authors of false and misleading online reviews.
RESPONDING TO DEFAMATORY COMMENTS
If someone makes false or defamatory statements about your
company, consider taking the following steps: (1) react to the false statement in a positive
way, (2) use the site’s administrative procedures to remove untrue content, and
(3) request a retraction of the statement. If these attempts are unsuccessful
or if you wish to pursue a defamation case, be sure to obtain the name and any
other identifying information of the author of the untrue statement, take a picture
or “screen shot” of the defamatory statement, and keep track of all related
business expenses and losses that result from the defamatory statement.
MINIMIZING YOUR OWN LIABILITY
Companies operating in today’s environment must recognize
they too face liability for defamatory statements made by even low-level
employees. A company’s public
communications, whether made by the CEO or a newly hired employee managing its
Facebook or Twitter page, can be actionable for defamation if the statements
are untrue and cause monetary damage. To
protect your business from potential social media liability, you should:
1.
Have a clear company policy that
provides guidance regarding the proper use of social networking sites;
2.
Train all employees on your social
media policy and the importance of appropriate social media use;
3.
Carefully select and limit the
number of employees who will be the voice of the company on social media sites;
and
4.
Be careful and respectful. Post only truthful statements, as truth is a
defense to defamation; and obtain appropriate insurance coverage (be sure to
understand the scope of the coverage and the
exclusions).
Implementing a social media policy is an essential to
protect your business. We recommend that
you consult with an attorney to be sure you are in compliance with the latest
rulings in your state. Companies often
fail to properly implement their social media policy. Be sure your employees know its importance and
how to conduct themselves. As social
media continues to play a vital role in how businesses and consumers interact,
be aware that while defamation lawsuits can be a powerful tool to protect your
online reputation, they are also something to guard against. Closely monitor online reviews of your
company, as they substantially affect your business. As unscrupulous individuals and businesses use
social media to harm others, defamation claims will continue to present one
avenue to protect your company. But
first, limit the risk. Take proactive
steps to avoid inappropriate online posts and manage the unforeseeable risks
through company-wide training and the purchase of insurance.
Social media is here to stay. Businesses must accept the challenge of operating
in this new environment. By understanding these rules and turning them to your
advantage, you will maximize your chances of operating a successful business.
William J. Gallitto is an attorney with Bergen &
Parkinson and is a member of the firm’s Civil Litigation Group. He routinely represents and counsels
companies and businesses in
litigation, planning and risk management.
Bill can be reached at wgallitto@bergenparkinson.com.
[1] Cone Communications, Cone Online
Influence Trend Tracker, and Game Changer: Cone Survey Finds 4-out-of-5
Consumers Reverse Purchase Decisions Based on Negative Online Reviews.
