If you see a negative comment in a local Facebook group about your business, or a comment from an angry customer on your business’ latest Instagram post, you may wonder if you have any legal remedies. As lawyers, we will often be the first to tell you to consider all options before pursuing your legal rights. Sometimes a polite public response to a negative comment can be the best approach, especially when the business takes on any feedback in good faith and proposes a solution. However, if the comments are highly damaging, untrue or misleading, you may decide to take legal action.
You can sue for defamation if your business has less than ten employees or is a not-for-profit organisation. You will need to prove that the content on social media is defamatory and that it identifies your business. Content is defamatory if it harms your business’ reputation or is likely to result in your business being shunned or avoided. Your business doesn’t need to be named – if an ordinary reasonable person could determine which business was being defamed, then the content identifies your business.
Even if a comment is damaging to a business, the person who posted it will have a defence to defamation in certain situations, most relevantly, if the comment is substantially true, trivial or is an expression of honest opinion based on proper material. “Based on proper material” means that the customer must have actually bought, used or tried the product or service and formed their opinion reasonably.
If a person has made defamatory comments on social media about your business, the first step will be to issue a concerns notice, which is similar to a cease and desist letter. The notice allows the business to seek an apology, removal of the comment and compensation where relevant. Often, this will be all that is needed and the affected business won’t have to pursue litigation.
A corporation with more than ten employees cannot bring a claim of defamation but may be able to bring a claim of injurious falsehood instead. In this context, it involves proving that a false statement about a business on social media caused actual damage to the business, and that the person who made the statement intended to inflict damage on the business. While defamation focuses on damage to a business’ reputation, injurious falsehood focuses on actual economic loss. Economic loss could include customers cancelling their orders or a business losing valuable contracts.
If you have a reasonable basis for believing that a negative review or comment is fake and was written by a competitor, you may be able to sue them for defamation or injurious falsehood. This happened in Queensland, where a cosmetic surgeon received $420,000 in damages after a competitor posted a one-star review, pretending to be a former patient.
In addition, you may be able to sue for misleading or deceptive conduct. It is an offence for a person to make fake or misleading online reviews about their own business, or another business.
Social media allows customers to publicly share their experiences with businesses, and this includes the good and the bad. If you feel that the experiences posted on social media are dishonest, untrue or not written by a real customer, our experienced lawyers can assist you to achieve your desired outcome.