Facebook reputational risks for businesses
Businesses face increased risks through the use of Facebook and other web 2.0 networking sites as this case shows.
This case will be of interest to businesses and owners of businesses who encourage or allow employees to use online networking sites such as Linked In,Beebo,Facebook etc etc. Likewise the owners of such sites.Many of these social/business sites are favoured for selling,networking,marketing and recruitment purposes with some graduates encouraged to post blogs on what working life is like at X plc.
There are dangers however in allowing such use, withour restraints or controls.Some supplier rating sites allow unregulated commentary of suppliers and so forth and when they do so can risk defamation proceedings as a result.
Applause Store Productions Ltd and Mathew Firsht v Grant Raphael was the first case on libel and privacy laws to reach court and has serious ramifications for social networking sites and employers who may be vicariously liable for the actions of their employees in such business social networking.
It can therefore be possible to sue a networking site either as an individual or a business for defamation/reputational loss.
A different position exists for hosting and service provider companies like ISPs.
Here the Electronic Commerce Directive 2002 provides ISPs with a defence though conditions apply. The legal principle is that ISPs that store the defamatory information are not to be held to account in the same way an innocent storage company would not be guilty of handling stolen goods etc if it was operating in the normal course of its business.
An old case involving CBS Songs and Amstrad in 1988 held that the provider of platform services could not be held vicariously liable for the actions of users.
A distinction here is the role of the provider. In Bunt v Tilley and Others (2006) it was held that AOL, BT and Tiscali in their passive roles as platforms only in facilitating postings on the internet cannot be deemed to be a publisher at common law and accordingly could not held responsible for publishing defamatory statements. Contrast the recent case of Tesco Stores Ltd v Guardian News and Media Ltd and Others(2008) in which the newspaper clearly published false allegations about Tesco's handling of corporation tax-alleging avoidance which in itself is lawful(as opposed to evasion which is not).
For more on the risks of allowing bulletin boards on websites please get in touch.
