The rise of social media has made it easier to defame individuals and institutions. With a click of a button, a false claim can rapidly spread and negatively impact your business’s reputation. While your customers are free to leave negative reviews about your company, you should draw the line between free speech and potential defamation or trade libel that may damage your brand.
Definitions of defamation and trade libel
Defamation happens when someone makes false statements that are damaging to another person’s reputation. The law defines a written defamatory statement as libel and a spoken defamatory statement as slander. When these false assertions target a commercial entity, the law classifies the matter as trade libel.
Elements of trade libel claims
To succeed in your claim of trade libel, you must prove the following:
- The defendant made a false statement about your business, products or services to a third party.
- The falsehood directly resulted in financial loss to your business.
- The false statement damaged your business’ reputation.
- The defendant acted with negligence, meaning the person failed to act with reasonable care when checking the facts. If the plaintiff is a public figure, the law generally requires the element of actual malice, which means the defendant knew the information was false or acted with reckless disregard for the truth.
Aside from proving falsity, it is important to show that the defendant presented the statement as a fact rather than an opinion, as most customer reviews tend to be. For example, if a review says, “The ambiance of this restaurant is too gloomy,” that is just how the customer feels. There is no definite way to prove if the statement is true or false because it is subjective.
However, if a review states something that can be fact-checked, such as “The health department cited this restaurant last month for a rat infestation,” and it turns out to be false, then it is typically defamatory.
Protecting your brand reputation
You can safeguard your business’ image by actively monitoring social media mentions and online reviews. Respond to customer concerns promptly and professionally, especially to address any negative feedback. If you see statements that appear false and damaging, take screenshots to keep a record and consider talking to a qualified professional to help you understand your legal options.
Your proactivity in flagging potential trade libel can save your brand from irreparable harm.
