Griping online has long been a favorite pastime among Net surfers. But now there’s a new twist: companies and CEOs are fighting back by suing online detractors for libel under defamation principles. Dubbed “cybersmear” suits, legal experts have noticed a recent increase in these cases, which total about 115 since 1993. “As a percentage of overall cases, cybersmear is minuscule,” says Blake Bell, an attorney for Simpson Thacher & Bartlett in New York who tracks the cases. “But, as a percentage of libel cases, it’s substantial.”
Most cybersmear cases involve the kind of stock-market banter that happens on popular Web sites like Raging Bull and Silicon Investor. Legal observers say that smaller companies are more likely to sue than blue chips, because they take the threat of stock manipulation through online postings more seriously. Just two months ago a 15-year-old New Jersey teen was charged by the SEC with this kind of online stock manipulation.
Technology itself may be at the heart of the problem. The public message board is a new kind of animal: it attracts participants who typically transform the boards into a cyberized version of the office water cooler–a place for freewheeling chatter that is often not suitable for publication in traditional places like a newspaper or magazine. But the Net “publishes” this chatter instantly and worldwide. No cybersmear suit has yet made it to trial, and for that reason it’s unclear whether ordinary citizens should receive the protection that journalists and traditional publishers do when they’re sued for libel. This phenomenon has also created anxiety on both sides of the legal fence. According to Les French, a former cybersmear defendant who started an online resource center for other defendants, people are shocked to have a court summons delivered to their door. “Most are not even aware that you can get sued for posting.” Companies are also frustrated. “They don’t know how else to stop this,” French says. “That’s why they’re suing.”
Free-speech advocates worry that companies may be unfairly trying to silence critics. The process of unmasking otherwise anonymous posters is a powerful weapon, says Lyrissa Barnett Lidsky, a law professor at the University of Florida at Gainesville. “When a corporation subpoenas 100 unknown John Does [from an ISP or message board], that sends a message. It tends to have a chilling effect,” says Lidsky.
Privacy might be another victim in this skirmish. French learned that the hard way. In 1998, in the course of his own cybersmear battle against a company called Itex, French discovered that CompuServe, his ISP, was subpoenaed and released his personal in-formation without his knowledge. “CompuServe gave Itex two credit-card numbers, a six-month log of every minute I logged and a record of books and software purchases I had made,” says French. “That’s no one’s business.” Itex paid French a $45,000 settlement in April; CompuServe now gives members 10 to 14 days’ notice before releasing personal information in response to civil subpoenas.
ISPs must comply with subpoenas and as a matter of policy don’t intercede to protect the privacy of a member who’s being sued. That’s something to think about the next time you want to dash off a nasty note on your local message board.
